Ring Energy, Inc. has entered into a joint development agreement with Torchlight Energy Resources, Inc. (Torchlight) to develop all of Ring’s existing Kansas leasehold of approximately 17,000 acres. Operations are scheduled to begin before year end 2013.
Highlights of the Agreement are –
◾Ring will be the operator.
◾ Torchlight will pay 100% of all drilling and completion costs until an amount equal to Ring’s total costs related to the Kansas leases has been met (approximately $6.2 million).
◾ After Torchlight has matched $6.2 million, all drilling and development costs related to the continued ongoing development of the Kansas leases will be shared equally under the joint operating agreement.
◾ Production and revenue will be shared equally from commencement of the first well.
◾ Under this arrangement, Ring is expected to drill an estimated 10 vertical wells with such $6.2 million. After the $6.2 million is spent, Torchlight and Ring will share any additional expenses on an equal basis.