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Highlights

  • Ring Energy acquires approximately 17,700 net acres in the Permian Basin.
  • Acquisition adds 2,300 Boe/d of low-decline production, boosting financial performance.
  • The deal supports significant free cash flow and offers operational synergies.

Ring Energy, Inc. (NYSE : REI) has finalized its acquisition of Lime Rock Resources IV, LP’s Central Basin Platform (CBP) assets as of March 31, 2025. The assets are located in the Permian Basin, specifically in Andrews County, Texas, and span around 17,700 net acres. These assets are similar to Ring’s existing CBP holdings, particularly in the Shafter Lake area, with the remaining acreage offering exposure to new active plays.

The acquisition is highly accretive, with the CBP assets contributing approximately 2,300 barrels of oil equivalent per day (Boe/d), with over 80% of that production being oil. The deal is expected to generate around $34 million in 2025 estimated adjusted EBITDA. Additionally, it adds to Ring’s proven developed reserves, with $120 million in oil-weighted reserves, which supports the company’s goal of reducing debt through higher adjusted free cash flow (AFCF) generation.

Ring Energy’s Chairman and CEO, Paul D. McKinney, noted the integration of Lime Rock’s CBP assets into the company’s existing operations will be straightforward due to the similarity of the assets to Ring’s core Shafter Lake operations. This integration is expected to yield cost savings and operational synergies. The deal further consolidates Ring’s presence in the Permian Basin, allowing the company to increase its inventory of proven drilling locations, which will compete for capital moving forward.

The transaction consideration involved a cash payment of $63.6 million, a deferred cash payment of $10 million due by December 31, 2025, and the issuance of approximately 6.5 million shares of common stock. The closing was funded using cash on hand and borrowings from Ring’s senior revolving credit facility.