Drilling & Completions | Well Cost | Well Lateral Length | Drilling / Well Results | Drilling Activity

Ring Talks Q3 San Andres / CBP Drilling Activity, Well Results

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Ring Energy, Inc. released its operations update for the third quarter of 2019.

In Q3 2019, Ring drilled six new one-mile horizontal San Andres wells on its Northwest Shelf (NWS) asset. Of the six new wells drilled, three were completed, tested and had IPs filed, while the remaining three were completed and are in varying stages of testing.

The average IP rate for all the horizontal wells (11 wells) completed and IPs filed in the third quarter of 2019 was 475 BOEPD, or 101 BOE/ 1,000 feet on an average lateral of 4,741 feet.

Historical Horizontal Drilling Results Summary

• Average IP rate for all Hz wells completed and IPs filed 2016 & 2017 (50 wells) -
  578 BOPE/d or 114 BOE / 1,000 ft.
• Average IP rate for all Hz wells completed and IPs filed in 2018 (57 wells) -
  432 BOE/d or 103 BOE / 1,000 ft.
• Average IP rate for all Hz wells completed and IPs filed in 1^st Qrt. 2019 (15 wells) -
  429 BOE/d or 103 BOE / 1,000 ft.
• Average IP rate for all Hz wells completed and IPs filed in 2^nd Qrt. 2019 (5 wells) -
  497 BOE/d or 123 BOE / 1,000 ft.
• Average IP rate for all Hz wells completed and IPs filed in 3^rd Qrt. 2019 (11 wells) -
  475 BOE/d or 101 BOE / 1,000 ft.

Mr. 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."

Updated Decline Curves and Economics

Drilling costs have decreased from $2.2 million to $1.9 million due to decreased service costs primarily in the completion phase.

Production Results for Q3

Net production for the third quarter of 2019 was approximately 1.015 MMBOEs (11.03 MBOEPD), as compared to net production of 600 MBOEs (Ring Only / Prior to NWS Acquisition) for the third quarter of 2018, a 69.2% increase, and net production of 976,000 BOE for the second quarter of 2019, an approximate 4% increase.

September 2019 average net production was approximately 11,400 BOEs, as compared to net daily production of 7,294 BOEs (Ring Only) in September 2018, a 56.3% increase, and net daily production of 10,800 BOEs in June 2019, a 5.5% increase. Net production for the nine months ended September 30, 2019 was approximately 3,041,000 BOEs, compared to 1,639,000 BOEs (Ring Only) for nine months ended September 30, 2018, an 85.5% increase.