Ring Energy announces preliminary CapEx budget for 2017
Ring Energy announced a preliminary capital expenditure budget for 2017 of approximately $70M. Based on the initial results of the company's three well horizontal drilling program, the majority of the 2017 CapEx will be spent on Ring's CBP San Andres play, where the company plans on drilling 22 new horizontal wells, six new vertical wells and continued upgrading of existing infrastructure, which would include the drilling of additional salt water disposal wells in support of the company's ongoing expansion and development of its horizontal drilling program. In addition, the company plans on drilling eight new vertical wells and perform remedial work on 12 existing wells, as well as upgrading current infrastructure on its Delaware Basin property. Management stated that the initial budget does not include any "Brushy Canyon" horizontal wells on its Delaware asset, but intends to reassess the possibilities in the second half of 2017 based on the company's current progress, commodity prices and other factors. Funding for the 2017 CapEx budget will come from existing cash flow from operations and the company's $60M senior credit facility. The 2017 CapEx budget is subject to change based on market conditions, commodity price changes, rig availability, drilling results, possible acquisition opportunities and general operational results. The company continues to look for acquisition opportunities, but has not included a provision for those opportunities in its 2017 CapEx guidance.