Ring Energy Enters Agreement to Acquire Stronghold’s Permian Basin Assets for $465 Million
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Ring Energy has entered into an agreement to acquire the assets of Stronghold Energy II Operating and Stronghold Energy II Royalties. Stronghold’s operations are located primarily in Crane County, Texas and focused on the development of approximately 37,000 net acres in the Permian Basin’s Central Basin Platform (CBP). Stronghold is majority owned by Warburg Pincus, a leading growth investor.
“The transaction truly complements our existing footprint of conventional-focused Central Basin Platform and Northwest Shelf asset positions in the Permian Basin. We intend to leverage our extensive expertise in applying the newest unconventional and conventional technologies to optimally develop Stronghold’s deep inventory of investment opportunities, said Paul D. McKinney, chairman of the board and chief executive officer.
“Once we complete the transaction, we will have materially increased our inventory of high rate-of-return drilling, recompletion and workover projects, and fully expect to increase our activity across our expanded footprint. The combination of lower operating costs and a substantially expanded inventory of high-margin, capital efficient development opportunities is expected to increase free cash flow and our ability to rapidly pay down debt. This will allow us to expand even further through potential acquisitions or enhance stockholder returns through other potential return of capital opportunities,” added McKinney.
OWNERSHIP, GOVERNANCE & LEADERSHIP
Following the closing of the transaction, Stronghold’s owners will own approximately 34 percent of Ring and become its largest stockholder. The closing of the transaction is subject to customary closing requirements, including satisfactory review of title and environmental conditions.
The transaction was approved by a unanimous vote of Ring’s board of directors. Following the closing of the transaction, the board will be expanded from seven to nine directors to include two members proposed by Warburg Pincus. Ring’s current senior management team will continue to lead the pro forma company.
About Ring Energy
Ring Energy, Inc. is an oil and gas exploration, development, and production company with current operations focused on the conventional development of its Permian Basin assets in West Texas and New Mexico.
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