The Delaware Basin acreage comprises approximately 20

US-based oil and gas firm Ring Energy has signed a purchase and sale agreement related to its Delaware Basin asset.

Located in the Culberson and Reeves counties of Texas, the Delaware Basin acreage comprises approximately 20,000 net acres.

The deal is valued at $31.5m.

Current net daily production from the property is 575 barrels per day (bpd) of oil and 2,000ft³ per day of natural gas. This is equivalent to 908 barrels of oil per day (boepd).

Proved developed producing (PDP) reserve estimates of the company for last year, determined by engineering firm Cawley, Gillespie and Associates, were estimated at 3.48 million barrels of oil and 10,055 million cubic feet (mmcf) of natural gas.

Ring Energy CEO Kelly Hoffman said: “Since formally announcing the marketing of our Delaware property in early November 2019, we have worked very hard to bring about a fair and equitable transaction.

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“The current environment mandates a cautious, conservative approach going forward, and strengthening our balance sheet is a step in the right direction.”

Ring Energy said it received a $500,000 non-refundable deposit and anticipates closing the deal in over 60 days.

The company plans to use the proceeds from the sale to reduce the current balance on its senior credit facility.

Ring Energy is an explorer, developer, and producer of oil and gas. It has operations in Texas and New Mexico.

Last February, Ring Energy signed a definitive agreement to acquire North Central Basin Platform assets from Wishbone Energy Partners in a $300m transaction.