Ring Energy Announces Accretive Bolt-On Acquisition

Core Insights - Ring Energy, Inc. has announced an agreement to acquire Central Basin Platform assets from Lime Rock Resources for $100 million, which includes $80 million in cash, a $10 million deferred payment, and up to 7.4 million shares of common stock [1][7] Transaction Overview - The acquisition is expected to close by the end of Q1 2025 and has an effective date of October 1, 2024 [1][2] - The Lime Rock assets are located in Andrews County, Texas, adjacent to Ring's existing operations, providing opportunities for integration and operational synergies [2][5] Strategic Rationale - The acquisition is aimed at enhancing shareholder value through improved operations and synergy capture, with a focus on consolidating high-quality, oil-weighted assets [2][4] - The transaction is expected to increase Ring's scale, enhance its portfolio of high-return drilling locations, and accelerate debt reduction [4][6] Financial Metrics - The acquisition is valued at less than 85% of Proved Developed PV-10, indicating an attractive valuation for shareholders [6] - The Lime Rock assets are projected to generate $34 million in 2025E Adjusted EBITDA, contributing to higher adjusted free cash flow and reduced reinvestment rates [6][13] Operational Highlights - The acquired assets consist of approximately 17,700 net acres that are 100% held by production, providing immediate opportunities for field-level optimization and cost savings [5][6] - The transaction marks Ring's fourth acquisition since 2019, totaling approximately $940 million in assets, demonstrating a proven M&A strategy [4][6]