On April the 17th, the oil and gas exploration, development and production company, Ring Energy, announced the acquisition of 33,000 undeveloped acres in Gaines County, Texas. Ring Energy Inc. (NYSE: REI) confirmed a total purchase price of $16,600,000 or $500 per acre. The payment will be made using surplus capital generated from the company’s public stock offering in December of 2016. The area has been specifically targeted by Ring for use as a part of its horizontal drilling and development program.
Around half of the 33,000 acres are adjacent to areas currently held under Ring’s Central Basin Platform leases. After the acquisition, Ring Energy will have 100% working interest, as well as a net revenue interest of 75%. The company expressed their interest in delving into horizontal drilling in April of 2016. CEO of Ring, Mr. Kelly Hoffman, confirms “staff has been extremely active in identifying and securing assets in an area we now call our ‘horizontal footprint.'” It has taken the company more than 6 months to complete the project. Over the course of 12 months, Ring has grown their horizontal footprint from just 8,000 net acres to more than 63,000 net acres today.
This represents 600 potential horizontal drilling spots. During Monday’s trading period, REI stock climbed 3.57% to settle at $12.19 per share. The stock has a 52-week-low of $5.53 and a 52-week-high of $14.10.