Ring Energy, Inc. (NYSE American: REI) has priced an underwritten public offering of 44,444,445 shares of common stock at $1.35 per share, with expected gross proceeds of approximately $60 million, the company announced Wednesday. The offering is expected to close on or about May 17, 2024, subject to customary closing conditions. Net proceeds will primarily be used to repay outstanding borrowings under its senior secured revolving credit facility, with any remaining funds allocated to general corporate purposes.
The move signals the company's commitment to deleveraging its balance sheet amid a favorable pricing environment. As of March 31, 2024, Ring Energy had approximately $360 million in outstanding borrowings under its credit facility. By applying the $60 million in proceeds, the company could reduce its debt by roughly 17%, potentially lowering interest expenses and improving financial flexibility.
Mizuho, BofA Securities and Raymond James are serving as joint book-running managers for the offering. The underwriters have a 30-day option to purchase up to an additional 6,666,666 shares at the public offering price, which could bring total gross proceeds to approximately $69 million if fully exercised.
The offering comes as Ring Energy continues to focus on its operations in the Permian Basin of Texas, targeting oil and liquids-rich formations in the Northwest Shelf and Central Basin Platform. The company's strategy has been to grow through acquisitions and development drilling while maintaining a strong balance sheet. Reducing debt is seen as a critical step to enhance shareholder value and position the company for future growth opportunities.
Ring Energy is a growth-oriented independent oil and natural gas exploration and production company based in The Woodlands, Texas. The company's drilling operations target the oil and liquids rich producing formations in the Permian Basin. For more information, visit https://www.ringenergy.com/.
The full press release is available at https://ibn.fm/txeqj.
