US-based oil and gas company Ring Energy has agreed to acquire the Central Basin Platform (CBP) assets in Texas from Lime Rock Resources for $100m, subject to standard closing adjustments.
The deal, effective from 1 October 2024, is expected to close by the end of the first quarter of 2025 (Q1 2025) and will enhance Ring Energy’s Permian Basin operations.
The purchase price includes $80m in upfront cash, a deferred payment of $10m due nine months post-closing and up to 7.4 million shares of Ring common stock.
Lime Rock's CBP acreage in Andrews County, Texas, is adjacent to Ring's core Shafter Lake operations.
This acquisition is set to integrate strategic assets with Ring's existing operations, aiming to create shareholder value through operational improvements and synergy capture.
The assets include approximately 17,700 net acres contiguous to Ring's existing footprint, with 2,300 barrels of oil equivalent per day of low-decline average net production from around 101 gross wells.
Ring Energy chairman of the board and CEO Paul D. McKinney said: “This is a unique opportunity to capture high-quality, oil-weighted assets that generate significant free cash flow in a privately negotiated transaction.
“This acquisition not only increases our scale, but it also enhances our portfolio of high-return drilling locations and accelerates the company’s ability to pay down debt. We look forward to quickly integrating the assets into our existing operations and applying our extensive expertise to optimally develop the inventory of horizontal targets afforded by the transaction.”
The upfront cash consideration for the purchase is expected to be funded with cash on hand and borrowings under Ring’s existing credit facility.
Greenhill, a Mizuho affiliate, served as the sole financial advisor to Ring for the acquisition, with Jones & Keller providing legal counsel.
Lime Rock Resources was advised financially by Truist Securities and legally by Kirkland & Ellis.
In 2022, Lime Rock Resources acquired properties in North Dakota and Texas for approximately $358.5m.
