In paragraph labeled "RAM to Webcast Second Quarter 2006 Conference
Call," fourth sentence should read: The teleconference may be
accessed by dialing 866-383-8009 (domestic) or 617-597-5342
(international) and providing the call identifier "RAM" to the
operator. (sted The teleconference may be accessed by dialing
888-383-8009 (domestic) or 617-597-5342 (international) and
providing the call identifier "RAM" to the operator.) The corrected
release reads: RAM ENERGY RESOURCES REPORTS SECOND QUARTER 2006
RESULTS; KEY OPERATING AND FINANCIAL HIGHLIGHTS RAM Energy
Resources, Inc. (Nasdaq:RAME) today announced second quarter 2006
earnings and operating results. For the quarter ended June 30, RAM
incurred a loss of $3.1 million, or $0.13 per share based upon 23.0
million weighted average shares outstanding. Results of the current
quarter were negatively impacted by $3.3 million in non-cash
charges related to the merger ($2.2 million for share based
compensation and the write-off of unamortized loan fees of $1.1
million) and by non-cash unrealized derivative losses of $2.1
million, all on a pre-tax basis. Exclusive of the non-cash items,
RAM would have had pre-tax income of $2.3 million and, assuming the
same tax rate, net income of $1.5 million, or $0.06 per share. By
comparison, in the second quarter 2005 RAM Energy, Inc., the
exploration and production entity acquired by the company in May,
2006, reported a loss of $291,000 or $0.04 per share, which
included a pre-tax non-cash charge of $3.2 million for unrealized
derivative losses. All comparative information in this release
relates to same period 2005 financial and operating results of RAM
Energy, Inc. Cash flow from operations, a non-GAAP measure, was
$4.0 million for the second quarter of 2006 compared to cash flow
of $3.6 million in the same quarter of 2005. See the attached table
for reconciliation of these non-GAAP financial measures to the
corresponding GAAP amounts of cash provided by operating activities
of $8.3 million for the second quarter of 2006 and $6.7 million for
the same quarter in 2005. Second Quarter Highlights -- RAM Energy,
Inc. completes merger with Tremisis to become publicly traded RAM
Energy Resources, Inc.; -- RAM was selected for inclusion in the
Russell 2000 index, a widely used investment benchmark; -- Second
quarter 2006 production of 329,000 barrel equivalents (BOE) of oil
and natural gas increased three percent sequentially over the first
quarter level of 318,000 BOE; -- Emerging production from the
Barnett Shale growing in importance, currently represents fourth
largest producing area in the company; -- RAM initiates exploration
play, targets Wolfcamp shale in Southwest Texas; -- First half
capital spending of $10.5 million on pace with full-year 2006
planned non-acquisition spending of $24.3 million. Production Total
production for the second quarter 2006 was 329,000 BOE, a decrease
of 11,000 BOE or three percent compared to the year-ago quarter of
340,000 BOE. The decline is primarily attributable to the vesting
of an outstanding back-in interest in favor of a non-operating
partner in the Boonsville area which occurred in late 2005 and, to
a lesser extent, natural production decline. The vesting of the
reversionary interest had the effect of reducing daily production
by 193 BOE, or a total of 17,563 BOE for the second quarter of
2006. Similarly, before giving effect to the reversionary interest,
our daily average production in the second quarter of 2006 would
have been 3,804 BOE versus 3,741 BOE for last year's second
quarter, an increase of two percent. However, the reversionary
interest negatively impacted second quarter 2006 production
resulting in average daily production of 3,611 BOE compared to
3,741 BOE for the same quarter last year. Commodity Prices and
Revenues The company's realized price for oil increased 32 percent
to an average of $67.35 per barrel in the second quarter of 2006,
compared with last year's second quarter average realized price of
$50.95 per barrel. The company's realized price for natural gas
decreased 13 percent to average $5.54 per thousand cubic feet (Mcf)
compared to an average of $6.36 per Mcf in the second quarter of
2005. The increase in the average realized oil price more than
offset the effect of the decrease in production resulting from the
back-in interest, allowing oil and gas sales to increase 17 percent
to $18.0 million for the second quarter of 2006 compared to $15.3
million in the same quarter of 2005. The company does not formally
designate its derivative contracts as hedges nor are its derivative
contracts associated with its production therefore, realized prices
are not associated with derivative gains or losses. With the
addition of realized and unrealized losses on derivatives, total
revenues for the second quarter of 2006 were reduced to $14.0
million, 19 percent above the comparable year-ago second quarter.
Costs and Expenses Production costs totaled $4.6 million or $14.02
per BOE in the second quarter of 2006, 24 percent higher than the
$11.28 per BOE for the previous year's quarter. The increase was
primarily due to increased utility costs and higher maintenance
costs due to additional producing wells. Production taxes were
$874,000 or $2.66 per BOE in this year's second quarter, 17 percent
above the $2.28 per BOE for the second quarter of 2005, principally
as a result of higher oil prices. Total amortization and
depreciation expense for the second quarter was $3.3 million, of
which $3.2 million was attributable to oil and gas properties.
Amortization and depreciation expense of $9.60 per BOE associated
with oil and gas properties and equipment rose 20 percent compared
to the $8.00 per BOE level in last year's quarter. The higher
charges per BOE are attributable to higher capitalized costs
resulting from an increase in drilling and increased amortization
rates. General and administrative expenses rose 12 percent to $2.1
million. The increase of $228,000 was due to higher legal fees,
costs of public reporting, and accounting. Net interest expense for
the quarter rose by $2.9 million to $5.8 million compared to $2.9
million in last year's second quarter. Approximately $1.1 million
or 37 percent of the increase represents the write-off of
unamortized loan fees related to the establishment of new credit
facilities during the quarter while the remaining portion of the
increase is a result of higher outstanding indebtedness and higher
effective interest rates in this year's quarter. Six Months Results
For the six months ended June 30, 2006 RAM reported a loss of
$255,000, or $0.02 a share, on 15.4 million weighted average basic
shares outstanding. Results of the first six months of 2006 were
negatively impacted by $3.3 million in non-cash charges related to
the merger ($2.2 million for share-based compensation and the
write-off of unamortized loan fees of $1.1 million) partially
offset by an unrealized gain of $844,000 on derivatives, all on a
pre-tax basis. Exclusive of the non-cash items RAM would have had
pre-tax income of $2.0 million and, assuming the same tax rate, net
income of $1.3 million, or $0.08 per share. For the six months
ended June 30, 2005, RAM recorded net income of $1.2 million, or
$0.16 per share, which included a pre-tax derivative mark-to-market
loss of $3.2 million. Cash flow from operations, a non-GAAP
measure, was $9.3 million for the first six months of 2006, down
seven percent compared to $10.0 million for the same period in
2005. See the attached table for reconciliation of these non-GAAP
financial measures to the corresponding GAAP amounts of cash
provided by operating activities of $16.2 million for the six
months ended June 30, 2006 and $9.1 million for the six months
ended June 30, 2005. First Half 2006 Operations Update Oil and gas
related capital expenditures were $5.3 million in the quarter, of
which $4.3 million was allocated to new lower risk development
activities and approximately $1.0 million for exploratory costs.
Total non-acquisition capital expenditures of $10.5 million for the
first half of 2006 are in line with RAM's targeted non-acquisition
capital budget of $24.3 million for the 2006 year and are
considerably higher than non-acquisition capital expenditures of
$7.4 million in last year's first half. RAM participated in the
drilling of 43 gross (42.1 net) development wells and three gross
(1.74 net) exploratory wells in the first half of the year in
contrast to a total of 27 gross (24.6 net) wells drilled in the
first half of 2005, the higher number of wells reflecting the
increase in capital expenditures. All of the development wells and
one of the exploratory wells drilled to date in 2006 are believed
capable of commercial production. In the Electra/Burkburnett area
of North Texas, the company's largest producing area, RAM drilled
41 net wells of which 36 were completed as producing wells during
the first six months of the year and five were in various stages of
completion at the end of the second quarter. In the first half of
2005, 24 wells were drilled and completed. The company owns a 100
percent working interest in and operates Electra/Burkburnett.
Activity is also continuing in the company's Boonsville area.
Following the drilling of the Sealy #B-6 well in the Boonsville
area late in the second quarter, RAM plans to spud a second well at
another proved undeveloped location during the third quarter. In
the company's Barnett Shale acreage in Jack and Wise Counties,
Texas, RAM participated in the drilling of two wells in the first
half of 2006 compared to one in the prior year's first half.
Currently the company owns an interest in nine gross (3.9 net)
Barnett Shale producing wells, two of which are operated by RAM,
six of which are operated by Devon Energy, and one of which is
operated by EOG Resources. Average daily production attributable to
the company's interest in Barnett Shale wells in the second quarter
2006 was 11 Bbls of oil and 1,101 Mcf of gas or 195 BOE. RAM
currently owns 27 square miles of 3-D seismic and is currently
acquiring an additional seven square miles of seismic on the
company's 27,700 gross (6,800 net) acres in the Barnett Shale. The
seismic data is being used to target additional drilling locations.
In the company's non-operated Vinegarone Field in South Texas, the
Coe 27-2 well was spudded in early July and is in the process of
being completed. This is the first of three successive wells
planned for this field. The second well in the series, which spud
in early August, is drilling and nearing targeted total depth of
11,000 feet. RAM has a 25 percent working interest in the
Vinegarone Field and is participating in all three of the wells.
Merger Completed With Tremisis On May 8, 2006 RAM Energy, Inc.,
previously a privately held company, consummated a merger with a
subsidiary of Tremisis Energy Acquisition Corporation, a publicly
held specified purpose acquisition company. Following the merger,
the corporate name of Tremisis was changed to RAM Energy Resources,
Inc. and on May 9, the common stock, warrants and units began
trading on the Nasdaq Capital Market under the symbols RAME, RAMEW
and RAMEU, respectively assigned to the newly combined
organization. In connection with the merger, 25.6 million Tremisis
shares were issued to stockholders of RAM Energy plus $30 million
in cash. RAM Energy Resources has a total of 33.5 million common
shares outstanding currently. RAM to Webcast Second Quarter 2006
Conference Call The company's second quarter 2006 teleconference
call to review second quarter results will be broadcast live on a
listen-only basis over the internet on Tuesday, August 15 at 3 p.m.
Central Time. Interested parties may access the webcast by visiting
the RAM Energy Resources, Inc. website at www.ramenergy.com. From
the home page, select the investor relations tab and then click on
the microphone icon. The teleconference may be accessed by dialing
866-383-8009 (domestic) or 617-597-5342 (international) and
providing the call identifier "RAM" to the operator. The webcast
and the accompanying slide presentation will be available for
replay at the company's website. An audio replay will be available
until August 22, 2006 by dialing 888-286-8010 (domestic) or
617-801-6888 (international) and using passcode 24523294.
Forward-Looking Statements This release includes certain statements
that may be deemed to be "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
All statements in this release, other than statements of historical
facts, that address estimates of capital spending, NYMEX prices of
oil and gas and company realizations, the impact of oil and gas
hedging activities, drilling locations and events or developments
that the company expects or believes are forward-looking
statements. Although the company believes the expectations
expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of
future performance and actual results or developments may differ
materially from those in the forward-looking statements. Factors
that could cause actual results to differ materially from those in
forward-looking statements include oil and gas prices, exploitation
and exploration successes, actions taken and to be taken by the
government as a result of political and economic conditions,
continued availability of capital and financing, and general
economic, market or business conditions as well as other risk
factors described from time to time in the company's filings with
the SEC. The company assumes no obligation to update publicly such
forward-looking statements, whether as a result of new information,
future events or otherwise. RAM Energy Resources, Inc. is an
independent energy company engaged in the acquisition,
exploitation, exploration, and development of oil and gas
properties and the marketing of crude oil and natural gas. Company
headquarters are in Tulsa, Oklahoma, and its common shares are
traded on the Nasdaq under the symbol RAME. For additional
information, visit the company website at www.ramenergy.com. -0- *T
RAM Energy Resources, Inc. Condensed consolidated balance sheets
(in thousands, except number of shares) June 30, December 31, 2006
2005 ----------- ------------- ASSETS (unaudited) CURRENT ASSETS:
Cash and cash equivalents $12,943 $70 Accounts receivable- Oil and
natural gas sales 6,603 7,422 Joint interest operations, net of
allowance of $334 ($31 at December 31, 2005) 555 566 Related Party
3 142 Other, net of allowance of $52 ($13 at December 31, 2005) 51
175 Prepaid expenses 535 756 Other current assets 142 484
----------- ------------- Total current assets 20,832 9,615
PROPERTIES AND EQUIPMENT, AT COST: Oil and natural gas properties
and equipment, using full cost accounting 167,695 160,704 Other
property and equipment 5,972 7,276 ----------- -------------
173,667 167,980 Less accumulated amortization and depreciation
41,830 36,848 ----------- ------------- Net properties and
equipment 131,837 131,132 OTHER ASSETS: Deferred loan costs, net of
accumulated amortization of $4,435 ($4,905 at December 31, 2005)
2,994 1,613 Other 894 916 ----------- ------------- Total assets
$156,557 $143,276 =========== ============= LIABILITIES AND
STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable: Trade
$5,156 $4,343 Oil and natural gas proceeds due others 3,012 3,201
Other 19 -- Related party 14 41 Accrued liabilities: Compensation
814 749 Interest 3,727 1,745 Income taxes 46 146 Derivative
liabilities 4,135 3,510 Long-term debt due within one year 320 560
----------- ------------- Total current liabilities 17,243 14,295
OIL & NATURAL GAS PROCEEDS DUE OTHERS 2,390 1,972 LONG-TERM
DEBT 131,493 112,286 DEFERRED AND OTHER NON-CURRENT INCOME TAXES
25,181 25,300 ASSET RETIREMENT OBLIGATION 10,363 10,192 COMMITMENTS
AND CONTINGENCIES -- -- STOCKHOLDERS' DEFICIT: Common stock,
$0.0001 par value; authorized --100,000,000 shares; 33,630,000
shares issued; 33,531,900 shares outstanding 3 1 Additional paid-in
capital 2,218 95 Treasury stock (593) -- Retained earnings
(deficit) (31,741) (20,865) ----------- ------------- Stockholders'
deficit (30,113) (20,769) ----------- ------------- Total
liabilities and stockholders' deficit $156,557 $143,276 ===========
============= RAM Energy Resources, Inc. Condensed consolidated
statements of operations (in thousands, except share and per share
amounts) (unaudited) Three months ended Six months ended June 30,
June 30, ---------------------- ---------------------- 2006 2005
2006 2005 ---------------------- ---------------------- OPERATING
REVENUES: Oil and natural gas sales $17,973 $15,347 $34,783 $30,166
Realized and unrealized losses on derivatives (4,178) (3,794)
(2,770) (4,216) Other 180 215 424 585 ----------- ----------
----------- ---------- Total revenues 13,975 11,768 32,437 26,535
----------- ---------- ----------- ---------- OPERATING EXPENSES:
Oil and natural gas production taxes 874 777 1,684 1,541 Oil and
natural gas production expenses 4,607 3,838 8,913 7,536
Amortization and depreciation 3,311 2,857 6,524 5,816 Accretion
expense 132 68 265 146 Share-based compensation 2,218 -- 2,218 --
General and administrative, overhead and other expenses 2,088 1,860
4,047 3,918 ----------- ---------- ----------- ---------- Total
operating expenses 13,230 9,400 23,651 18,957 -----------
---------- ----------- ---------- Operating income 745 2,368 8,786
7,578 ----------- ---------- ----------- ---------- OTHER INCOME
(EXPENSE): Interest expense (5,778) (2,851) (9,307) (5,624)
Interest income 82 13 109 22 ----------- ---------- -----------
---------- INCOME (LOSS) BEFORE INCOME TAXES (4,951) (470) (412)
1,976 ----------- ---------- ----------- ---------- INCOME TAX
PROVISION (BENEFIT) (1,882) (179) (157) 750 ----------- ----------
----------- ---------- NET INCOME (LOSS) $(3,069) $(291) $(255)
$1,226 =========== ========== =========== ========== EARNINGS
(LOSS) PER SHARE: Basic and diluted $(0.13) $(0.04) $(0.02) $0.16
WEIGHTED AVERAGE SHARES OUTSTANDING: Basic and diluted 23,028,820
7,700,000 15,406,755 7,700,000 RAM Energy Resources, Inc. Condensed
consolidated statements of cash flows (in thousands) (unaudited)
Six months ended June 30, ---------------- 2006 2005 --------
------- OPERATING ACTIVITIES: Net income (loss) $(255) $1,226
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: Amortization and depreciation- Oil and
natural gas properties and equipment 6,176 5,613 Amortization of
deferred loan costs and Senior notes discount 562 420 Charge off of
unamortized deferred loan costs 1,055 -- Other property and
equipment 348 214 Accretion expense 265 146 Unrealized (gain) loss
on derivatives (844) 3,249 Deferred income taxes 686 (903)
Share-based compensation 2,218 -- Gain on disposal of other
property and equipment (99) -- Changes in operating assets and
liabilities Accounts receivable 1,093 (1,262) Prepaid expenses and
other current assets 567 (347) Accounts payable 616 4,546 Income
taxes payable (109) -- Accrued liabilities and other 3,930 (3,826)
-------- ------- Total adjustments 16,464 7,850 -------- -------
Net cash provided by operating activities 16,209 9,076 INVESTING
ACTIVITIES: Payments for oil and natural gas properties and
equipment (10,493) (7,443) Proceeds from sales of oil and natural
gas properties and equipment 3,502 2,335 Payments for other
property and equipment (566) (823) Proceeds from sales and
disposals of other property and equipment 366 -- -------- -------
Net cash used in investing activities (7,191) (5,931) FINANCING
ACTIVITIES: Payments on long-term debt (87,508) (6,760) Payments of
loan fees (2,977) (283) Proceeds from borrowings on long-term debt
106,454 5,335 Stock redemption (9,792) -- Repurchase of stock (593)
-- Payments of merger costs (4,187) -- Deferred income taxes on
share-based compensation (843) -- Cash acquired in merger 3,801 --
Dividends paid (500) (900) -------- ------- Net cash provided by
(used in) financing activities 3,855 (2,608) -------- -------
Increase in cash and cash equivalents 12,873 537 CASH AND CASH
EQUIVALENTS, beginning of period 70 1,175 -------- ------- CASH AND
CASH EQUIVALENTS, end of period $12,943 $1,712 ======== ======= RAM
Energy Resources, Inc. Condensed consolidated statements of cash
flows, continued (in thousands) (unaudited) Six months ended June
30, --------------------- 2006 2005 ---------------------
SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for interest $2,618
$1,638 Cash paid for income taxes $109 $-- ========== ==========
DISCLOSURE OF NONCASH FINANCING ACTIVITIES: Accrued interest added
to principal balance of revolving Credit Facility $2,797 $3,592
========== ========== RAM Energy Resources, Inc. Reconciliation of
cash flow from operations (a non-GAAP measure) to GAAP net cash
provided by operating activities 2006 -----------------------------
Three months Six months ended ended ----------------- -----------
March 31 June 30 June 30 Cash flow from operations (a non-GAAP
measure) $5,286 $3,983 $9,269 Plus: working capital changes 2,643
3,454 6,097 Less: deferred income taxes on share- based
compensation classified as financing activities 0 (843) (843)
-------- -------- ----------- Net cash provided by operating
activities per condensed consolidated statements of cash flow
$7,929 $8,280 $16,209 ======== ======== =========== Cash flow from
operations (a non-GAAP measure) $5,286 $3,983 $9,269 Less: realized
(losses) on derivatives (1,571) (2,043) (3,614) Less: unrealized
gains (losses) on derivatives per condensed consolidated statements
of cash flow 2,979 (2,135) 844 -------- -------- ----------- Cash
flow from operations (a non-GAAP measure) excluding realized and
unrealized gains (losses) on derivatives $3,878 $8,161 $12,039
======== ======== =========== 2005
--------------------------------------- Three months Six months
ended ended Year ended ---------------- ---------- March 31 June 30
June 30 December 31 Cash flow from operations (a non-GAAP measure)
$6,386 $3,579 $9,965 $22,365 Plus: working capital changes (4,035)
3,146 (889) (4,006) Less: deferred income taxes on share-based
compensation classified as financing activities -- -- -- --
-------- ------- ---------- ----------- Net cash provided by
operating activities per condensed consolidated statements of cash
flow $2,351 $6,725 $9,076 $18,359 ======== ======= ==========
=========== Cash flow from operations (a non-GAAP measure) $6,386
$3,579 $9,965 $22,365 Less: realized (losses) on derivatives (499)
(468) (967) (5,393) Less: unrealized gains (losses) on derivatives
per condensed consolidated statements of cash flow 77 (3,326)
(3,249) (6,302) -------- ------- ---------- ----------- Cash flow
from operations (a non-GAAP measure) excluding realized and
unrealized gains (losses) on derivatives $6,808 $7,373 $14,181
$34,060 ======== ======= ========== =========== *T
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