RAM Energy Resources, Inc. Announces Update to Operating Activity and Financial Highlights
07 Juillet 2008 - 3:15PM
Business Wire
RAM Energy Resources, Inc. (Nasdaq: RAME) today announced an update
to operating activity and certain financial highlights. Operations
Update During the second quarter 2008, RAM participated in the
drilling of 24 gross (20.9 net) development and exploitation wells
compared to 16 gross (16 net) development wells in the same quarter
last year, reflecting increased project inventory and planned
capital spending. Similarly the company participated in 1 gross
(0.9 net) exploratory wells in the second quarter of 2008, compared
with 5 gross (0.9 net) exploratory wells in the same period last
year. Drilling Activity Accelerates on RAM�s Unconventional Shale
Plays in the Barnett Shale of North Texas and the Devonian Shale in
West Virginia Drilling activity in RAM�s North Texas Barnett Shale
play, where the company has joint operating agreements with EOG
Resources (NYSE: EOG) and Devon Energy (NYSE: DVN), began to
accelerate late in 2007 and has continued through the first and
second quarters of 2008. Four horizontal wells were spud during the
second quarter, the T.L. Dickenson A-4H, A-5H, A-2H and the Brown
2-H, all of which are in various stages of completion. Three wells
were spud in this area during the first quarter, Etta Burress 3H,
Molloy A1-H, T.L. Dickenson A-3H, two of which began producing late
in the second quarter with combined gross initial daily production
rates of 5,733 Mcfe and one is completing. Together, all of these
wells are expected to contribute to production in the third
quarter. Additional 3-D Seismic Acquisition Planned to Expand
Barnett Shale Project Inventory and Support Future Growth Potential
Over the last two years RAM has acquired and interpreted seismic
which supported the drilling of the company�s 16 existing producing
wells. Currently RAM�s existing inventory of projects is
substantial and consists of 30 seismically identified locations
including proved undeveloped locations, probable locations and
possible locations. In addition to the company�s existing 85 square
miles of 3-D seismic inventory, RAM plans to participate in an
additional 50 square mile 3-D seismic program over jointly held
Barnett Shale acreage this year. The acquisition of additional
seismic is being undertaken in order to continue to increase the
company�s inventory of seismically identified potential drilling
locations and ultimately support near-to-intermediate term
production growth. Drilling Underway in West Virginia Devonian
Shale Play The company has staked six initial drilling locations in
its West Virginia Devonian shale play and has spud three horizontal
wells, the C.S. Ball #1H, the R. Mayes #1-H and the M. Jordan #1-H.
Drilling a horizontal well into the targeted portion of the shale
is relatively quick, averaging about 15 days. The initial two
horizontal wells were drilled to a measured depth in the targeted
Huron Shale of approximately 6,400 feet, which included a lateral
section of approximately 2,500 feet. Currently, one well is waiting
on a pipeline connection, one is awaiting completion and one is
drilling. The drilling rig is working under a contract to
sequentially drill the initial six wells with an option to extend
the contract. For 2008 a total of 14 horizontal wells are planned
with the aim of supporting the commercialization of the company�s
acreage. RAM has a 100 percent working interest and operates all of
its wells in West Virginia. Continued Strong Pace of Drilling in
Conventional Project Areas RAM Continues Stepped-Up Activity in its
Conventional South Texas Plays RAM drilled two wells targeting the
Vicksburg formation, the Garza Hitchcock #11 and #14, during the
first quarter 2008 which were successfully completed during the
second quarter and have contributed to that quarter�s production.
In addition, the company spud another two wells in the second
quarter, both of which are completing. The Wiese #1 well was among
those wells spud during the second quarter and is significant
because it targets another formation known to be productive in the
area, the Wilcox formation. If successful, this well could expand
the company�s inventory of opportunities in this area of South
Texas. Wells drilled by RAM on the company�s South Texas leases
since late 2007 are currently contributing approximately 4,492 Mcfe
gross (3,369 Mcfe net) per day to production. RAM has a 100 percent
working interest and operates all of these South Texas wells.
Project Maintenance Operations In the mature areas of
Electra/Burkburnett in North Texas and the Allen and Fitts fields
located in Oklahoma, which together were responsible for
approximately 45 percent of total net production in the first
quarter 2008, the company continues an active pace of development
drilling and recompletion activity. To date during the second
quarter, a total of 11 net wells were drilled in the
Electra/Burkburnett area, of which seven were completed as
producing wells, and four were in various stages of completion as
of late June. Also during the second quarter, RAM drilled four
wells in the Fitts area, of which one is producing, two are
completing and one is drilling. Together these two areas contain an
identified inventory of over 170 PUD locations for future drilling
to support production levels, and along with other mature fields,
generate a substantial portion of cash flow to fund the company�s
capital budget. Financial Highlights Operating results should
improve substantially in the second quarter of 2008 producing
EBITDA for the quarter in a range of $30 to $32 million,
representing an increase of more than 25 percent compared to that
of the first quarter of 2008. The increased cash flow from
operations combined with the $86.6 million of proceeds from the
recent exercise of warrants and utilization of cash balances
enabled RAM to reduce total debt outstanding more than $96 million
in the quarter. The operating cash flow also supported an increased
capital expenditure program in the second quarter, which is
anticipated to lead to a rise in production of approximately two
percent in the quarter compared to production in the first quarter
of the year. �We continue to be pleased with the heightened
activity levels made possible by a significant inventory of
development and exploitation projects in combination with higher
cash flows. The anticipated production growth resulting from the
ramp-up of drilling activity since the beginning of the year is
becoming increasingly visible and significant,� said Larry Lee,
Chairman and CEO. 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 drilling
activities, estimated production, plans to acquire seismic, EBITDA,
capital spending, future drilling plans 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.
Ram Energy Resources, Inc. (MM) (NASDAQ:RAME)
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