Ring Energy Eyes 10% Growth as Longer Laterals Unlock Permian Potential

Ring Energy plans to leverage longer horizontal wells in conventional Permian reservoirs, particularly in Crane County, where it has identified more than 200 high-return drilling locations.

The company says horizontal development could increase PV-10 values by 65% and oil recovery by 180%.

The company raised its 2026 capital budget to approximately $160 million-$165 million to fund longer laterals, horizontal drilling and infrastructure.

It expects about 10% production growth in 2027 while spending 10% less capital than in 2026.

Ring is prioritizing balance-sheet improvement, targeting leverage below 1.25 times, while using wider hedging collars to retain more upside exposure to oil prices.

Management says the company has more than 10 years of drilling inventory and could serve as a consolidator on the Central Basin Platform.

Ring Energy NYSEAMERICAN: REI Chairman and Chief Executive Officer Paul McKinney outlined the company’s strategy to expand oil production and improve capital efficiency through longer horizontal drilling programs in the Central Basin Platform and southern shelf areas of the Permian Basin.

Speaking at an EnerCom event, McKinney said the company has grown from producing less than 9,000 barrels per day when he joined in the fourth quarter of 2020 to more than 20,000 barrels per day currently.

He said Ring has also strengthened its balance sheet while completing acquisitions including Stronghold Energy in 2022 and Lime Rock in 2025.

McKinney said Ring’s core strategy centers on conventional reservoirs in the Central Basin Platform, rather than the shale-focused development that has dominated the neighboring Midland and Delaware basins.

He said the area offers lower entry costs, established infrastructure and substantial remaining recoverable resources.

According to McKinney, the Central Basin Platform and shelf areas have historically produced nearly 20 billion barrels of oil, compared with about 12.5 billion barrels for the Midland Basin and just under 10 billion barrels for the Delaware Basin.

Ring estimates that more than 15 billion barrels remain recoverable in conventional reservoirs on the Central Basin Platform.

He said conventional reservoirs generally have higher porosity and permeability than shale formations, contributing to shallower production declines and longer-producing asset lives.

Ring believes advances in horizontal drilling and multi-stage fracturing technologies can now be applied more effectively to these formations.

“We believe that we are in the heart of the Permian,” McKinney said, describing the company’s acreage position across Yoakum, Gaines, Andrews and Crane counties.

McKinney highlighted Crane County as an area of increasing activity following Ring’s Stronghold acquisition.

The acquired acreage included wells previously drilled by Devon Energy in 2010 and 2011, though he said the technology at that time did not generate returns meeting Devon’s thresholds.

Ring has been testing formations in the area for roughly a year and a half, McKinney said, and is now pursuing multi-bench, longer-lateral horizontal development.

The company identified more than 200 high-return horizontal drilling locations in Crane County during the past year, he said.

The company had 14 horizontal wells booked as proved undeveloped reserves at year-end 2025, according to McKinney.

He said more than 70% of Ring’s inventory is now associated with the expanded location count in the area.

McKinney said Ring’s analysis indicated that moving from vertical to horizontal development increased PV-10 values by 65.