Ring Energy Inc., Midland, will cease further drilling until commodity pricing stabilizes, the company said Mar. 10. The company will continue to spend on infrastructure upgrades and improvements it deems necessary to maintain current production. Meanwhile, the company is in discussions related to the marketing of its Delaware Basin asset.
Reported in February, the company’s preliminary capital expenditure budget of $85-90 million for the year included the drilling of 18 new horizontal wells (13 1-mile / 5 1.5-mile) on the Northwest Shelf (NWS) asset in the Permian Basin; well workovers including converting wells to rod pump; infrastructure upgrades/extensions on NWS, Central Basin Platform, and Delaware assets, along with all contractual drilling obligations, including projected costs specific to non-operated wells.
Four of the wells have been drilled, but “as of now, no further new drilling will take place until we are comfortable that commodity pricing has stabilized,” said Ring Chief Executive Officer Kelly Hoffman, noting the company is not obligated to, or under any contractual commitments for drilling or completion work.
The company said it will monitor its “all-in” cost for a barrel of oil of less than $25, including all lifting expenses, production taxes, general and administrative cash expenses and interest (excluding capitalized costs).
