Ring Energy reports six new San Andres wells drilled in Q3
Ring Energy released its operations update for the third quarter of 2019. In the three months ended September 30, 2019, the company drilled six new one-mile horizontal ("Hz") San Andres wells on its Northwest Shelf asset. Of the six new wells drilled, three were completed, tested and had Initial Potentials ("IPs") filed, while the remaining three were completed and are in varying stages of testing. In addition to the three new wells drilled in the third quarter which had IPs filed, the company completed testing and filed IPs on eight additional horizontal wells drilled in the first and second quarters of 2019 (5 Central Basin / 3 NWS). The average IP rate for all the horizontal wells (11 wells) completed and IPs filed in the third quarter of 2019 was 475 Barrels of Oil Equivalent ("BOE") per day, or 101 BOE/ 1,000 feet on an average lateral of 4,741 feet. The Company also performed nine conversions from electrical submersible pumps ("ESP") to rod pumps (4 NWS / 5 Central Basin). Management believes these conversions will lower future operating expense by reducing electrical usage, eliminating monthly rental costs on the ESPs and lowering future pulling costs by as much as 80%. All drilling activities and workover projects were completed on time and within budget. Danny Wilson, Ring's Executive Vice President and Chief Operating Officer, commented, "We continued to focus on the NWS in the third quarter. We drilled six new horizontal San Andres wells, all one mile in length. The results continue to exceed our initial expectations. Although the NWS wells tend to take a little longer to reach peak rates, we continue to be encouraged by the higher IP rates and flatter declines as compared to our legacy Central Basin Platform ("CBP") wells. We continue to communicate with other operators in the area, sharing information and ideas in an effort to constantly refine our completion and production techniques with the ultimate goal of lowering costs and improving recoveries. After operating the NWS properties for the last six months, we firmly believe the horizontal San Andres play on the NWS yields superior returns and has the potential to get even better. As a result of the excellent results we are experiencing on both the NWS and CBP, we are updating the slides related to each asset on our corporate presentation to reflect the new decline curves and improved economics on both assets. It is important for us to provide this detailed information to the investment community so they can accurately assess the true value of these two assets and the impact they will have on the future growth of the Company. Below is a summary of those changes. In addition to our drilling activities, we performed nine pump conversions, which will substantially reduce future operating costs, and completed one small infrastructure project on the CBP related to our saltwater disposal system."