Ring Energy lauds Texas output, but takes quarterly loss
Shale oil and gas company Ring Energy reported a net loss for the fourth quarter on March 16, despite production from its assets in Texas exceeding expectations.
The company operates largely in the Delaware basin that straddles the border of Texas and New Mexico. Net production was around 9,307 boe/day in the three-month period, which was greater than expected. Some 86% of its net production was oil.
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Net sale volumes in the fourth quarter were 3% lower than the previous reporting period. Fourth-quarter sale volumes totalled 7,984 boe/d of oil and 7.94mn ft3/d of natural gas.
The company lauded its production levels, noting it came even without new wells drilled during the fourth quarter.
“We are excited about the progress we’ve made and believe Ring is well positioned for success in 2021 and beyond,” Chairman and CEO Paul D. McKinney said in a statement.
Nevertheless, his company took a net loss on the year of US$253.4mn.
Ring said it had planned to tap 18 horizontal wells in its Texas acreage last year, but drilled only four of those in the first quarter of 2020. In early March, it suspended its drilling and completion activities due to the uncertain future brought on by the Covid-19 pandemic.
For 2021, the company said it expects to spend about $45mn, which would cover the cost of drilling no more than 10 wells. It expects sales volumes to be as much as 8% higher than last year.
Capital spending in 2020 was $30mn.