Ring Energy Inc. (NYSE MKT: REI) acquired more than 33,000 acres in the Central Basin Platform, adding to the Midland, Texas-based company's "horizontal footprint."
Ring Energy said April 17 it agreed to purchase the undeveloped acreage located in Gaines County in West Texas for roughly $16.6 million, or about $500 per acre, according to the company's estimates. The purchase includes 100% working interest and 75% net revenue interest.
More than half of the acquired acreage is contiguous to Ring Energy's existing leases in the Central Basin Platform, according to the company release.
"Since announcing our interest in implementing a horizontal drilling program in April 2016, our staff has been extremely active in identifying and securing assets in an area we now call our 'horizontal footprint,'" Kelly Hoffman, Ring Energy's CEO, said in a statement.
Hoffman said the "horizontal footprint" project has taken Ring Energy more than six months to complete.
Within the past year, Ring Energy has grown its "footprint" to more than 87,000 gross (63,000 net) acres from 8,000 net acres. This represents more than 825 gross (600 net) potential horizontal drilling locations, Hoffman said.
"Our drilling inventory is such that we can stay very busy for a number of years even if we choose to accelerate the program by adding additional rigs," he added.
Ring Energy plans to fund the acquisition using surplus capital from a $71 million equity offering, which closed in December.
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