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Ring Energy Announces Results of Fall 2020 Redetermination

Source: www.gulfoilandgas.com 12/23/2020, Location: North America

Ring Energy, Inc. announced the results of its fall 2020 redetermination of its $1 billion senior revolving credit facility (“Credit Facility”). The borrowing base was set at $350 million, or approximately 6.7% lower than its previous borrowing base of $375 million. The next regularly scheduled bank redetermination will be on or around May 1, 2021.

Management also announced that the Company paid down an additional $45 million against the Credit Facility, or 12.5% from the $360 million drawn as of September 30, 2020. This leaves the current amount drawn at $315 million dollars and approximately $35 million in available liquidity (plus cash on hand).

Additionally, the Company provided an update to their oil hedges for calendar years 2021 and 2022. The Company added 1,500 barrels of oil per day (“Bopd”) in additional oil hedges consisting of three 500 Bopd swaps at $45.45, $45.60, and $45.96 per barrel of oil, respectively. This brings the total amount of oil hedged for calendar year 2021 to 9,000 Bopd, a 50/50 balance of collars and swaps. The Company also secured four oil hedges for calendar year 2022, three 500 Bopd swaps at $44.22, $44.75, and $44.97 per barrel of oil, respectively, and one 250 Bopd swap at $45.98 per barrel of oil.

Mr. Paul D. McKinney, Ring’s Chief Executive Officer and Chairman of the Board of Directors, stated, “Strengthening our balance sheet remains our primary focus and despite the challenges we’ve faced this year, the Company has reduced debt by $73 million from the high-water mark set in the second quarter of $388 million – that is a 19 percent reduction! I am confident that we can continue to allocate a disproportional amount of our free cash flow to paying down debt throughout 2021 and allocate the remaining free cash flow to maintaining or possibly modestly growing our production.”

Mr. McKinney further remarked “Adding the swaps secures our free cash flow and ability to maintain our 2021 drilling program without fear of another retraction in oil prices. With the volatility we have experienced in oil prices, taking the defensive position we have with oil hedges is in the best interest of our shareholders at this time.”

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