RAM Energy Resources Announces Operational Update; Increases 2007 Capital Budget by 20 Percent
23 Avril 2007 - 3:25PM
Business Wire
RAM Energy Resources, Inc. (Nasdaq:RAME) today announced that EOG
Resources, Inc., which jointly owns an interest with RAM in a
significant portion of the company�s North Texas Barnett Shale
acreage, has elected to participate in and operate the Ramsey #1H
well. The Ramsey #1H is to be drilled to a true vertical depth of
approximately 6,840 feet with a lateral length of approximately
2,800 feet to test the Lower Barnett Shale formation. The well is
located in southwest Wise County, Texas, within the prolific Fort
Worth Basin. The total estimated cost to drill and complete the
well is $3.1 million. If all other leasehold owners elect to
participate in the drilling of the Ramsey #1H, RAM will own a 24
percent working interest in the well and will bear a like
percentage of the costs. The Ramsey #1H is the third well that RAM
has proposed to EOG and other joint interest owners to date this
year in an effort to accelerate the development of the company�s
Barnett Shale acreage. RAM made two previous well proposals in
recent months; in each case EOG elected to participate, drill and
operate the proposed wells. Earlier this year, EOG elected to
participate in the Ashe C 1H well located in Wise County, Texas.
The Ashe C 1H well was spud earlier this month and is currently
drilling ahead. RAM recently proposed its fourth Barnett shale well
to EOG. The Brown #2H well is to be drilled to a true vertical
depth of approximately 7,100 feet with a lateral length of
approximately 2,300 feet to test the Lower Barnett Shale formation.
Located in Wise County, Texas, the total estimated cost to drill
and complete the well is $2.7 million. As in the case of other
wells proposed by RAM to EOG, if all parties elect to participate,
RAM will own a 24 percent working interest in the well and will
bear a like percentage of the costs. RAM has an interest in 27,700
gross (6,800 net) acres in Jack and Wise Counties, Texas, with all
the acreage held by production. Currently RAM has 9 gross producing
wells in the Barnett Shale, with the tenth well, the Devon-operated
T. L. Dickenson 1-H, awaiting completion. In addition to the T.L.
Dickenson 1-H well and the recently spud Ashe C 1H well, RAM�s
project inventory for potential near-to-intermediate term growth in
its Barnett Shale play includes five PUD locations, 19 probable
seismic locations and 9 possible seismic locations, for a total of
35 locations identified to date. Many of these locations stem from
the company�s acquisition and ongoing review of 35 square-miles of
3-D seismic data over the last year. RAM expects additional
locations to emanate from further geophysical work on the acquired
seismic data. Also, a portion of RAM�s 2007 capital budget is
allocated to acquire an additional 60 square-miles of 3-D seismic
covering other acreage in its Barnett Shale holdings. 2007 Capital
Budget Increased 20 Percent to $36.3 Million RAM initially
allocated $4.0 million of its $30.3 million non-acquisition capital
expenditure budget for 2007 to drilling and developmental activity
on its Barnett Shale acreage. However, with EOG�s election to drill
and operate three of the four wells proposed by RAM to date this
year and with Devon Energy Corporation�s continuous drilling
commitment, it has become increasing apparent that the activity
level has reached the four to seven wells which comprised the
existing 2007 capital spending allocation for the Barnett Shale. As
a result of the year-to-date pace of apparent development activity,
the portion of the budget allocated to the Barnett Shale has been
increased by 150 percent, or $6.0 million, to a total of $10.0
million to accommodate additional wells anticipated to be proposed
by the company to EOG from RAM�s inventory of seismically
identified locations. Accordingly, the total company 2007 capital
budget has been increased by about 20 percent to $36.3 million.
RAM�s Wolfcamp Shale Activity Update In RAM�s 15,000 acre Wolfcamp
shale play in West Texas, activity is continuing on the two
vertical test wells drilled in the fourth quarter of 2006. Two
zones have been fracture stimulated in one of the wells and one
zone has been fracture stimulated in the other well. The wells are
currently recovering fluids from the stimulation process and both
wells are testing. At the conclusion of the fluid recovery effort
from stimulated zones, it is anticipated that another zone in each
of the wells will undergo fracture stimulation and additional
testing. The company does not anticipate that it will be able to
predict whether such completion activities will result in
commercially productive wells until remaining targeted zones are
fracture stimulated, frac fluids are recovered and additional
testing occurs. RAM is also participating in a gas exploration play
in the Arkoma Basin. Based on results in two previously drilled
wells along with gas shows and electric log results in the current
well, the company has elected to participate in the completion of
the Weyerhaeuser 8-22 well. In addition, RAM has also elected to
participate in the drilling of another proposed well, the
Weyerhaeuser 10-22, anticipated to spud in the second quarter of
this year. RAM�s Inventory of Identified PUD Locations Remains High
At year-end 2006 the company had a substantial inventory of 228
proved undeveloped (PUD) locations. The inventory of locations
amounts to about three years of drilling activity at recent rates
of drilling. Importantly, 200 of the PUD locations identified are
in the mature Electra/Burkburnett field in North Texas. As a part
of its exploitation program, RAM drilled 79 development wells in
the Electra/Burkburnett field during 2006, primarily converting PUD
reserves to proved developed producing reserves. However, the
drilling also established 64 new PUD well locations, replacing most
of the PUD locations drilled with new PUD locations to be drilled
in the future and extending its project inventory. Approximately 72
wells are targeted to be drilled in the field in the 2007 capital
spending budget. 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, which address estimates of drilling
costs, capital spending, the possibility of reserve additions, the
election of other working interest owners to the Joint Operating
Agreement to participate or not in a well, and events or
developments that RAM Energy Resources expects or believes are
forward-looking statements. Although RAM Energy Resources 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, rig availability
and general economic, market or business conditions as well as
numerous other risk factors described from time-to-time in RAM
Energy Resources� periodic reports, proxy statements and other
information statements filed with the Securities and Exchange
Commission. 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 natural
gas and crude oil. 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.
Ram Energy Resources, Inc. (MM) (NASDAQ:RAME)
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