RAM Energy Resources Reports 2009 Production Expected to Meet or Exceed Prior Guidance; Announces Preliminary Capital Budget ...
01 Décembre 2009 - 10:37PM
Business Wire
RAM Energy Resources, Inc. (Nasdaq: RAME) reported today that
total 2009 production is expected to meet or exceed previous
guidance of 2.5 million barrels of oil equivalent (BOE). In
addition, the company announced preliminary capital expenditure
plans and assumptions for the 2010 year and updates fourth quarter
2009 operating activity.
2010 Preliminary Capital Expenditure Plans and
Targets
RAM Energy has established a preliminary non-acquisition capital
budget for CY 2010 of $50 million compared to the revised $30 - $35
million budget for 2009. Consistent with RAM’s historical strategy,
non-acquisition capital expenditures are targeted to remain within
estimated annual cash flow.
Key assumptions supporting the 2010 preliminary capital
expenditure budget are:
- Hydrocarbon prices equal to the
calendar 2010 NYMEX strip prices prevailing at September 30, 2009
of approximately $72 per barrel for oil, $5.50 per Mcf for natural
gas and $40 per barrel for natural gas liquids (NGLs);
- Estimated production mix of 45%
oil and 15% natural gas liquids, or 60% of production (and
approximately 75% of revenues) dependent on the price of oil with
the remaining 40% of production (and approximately 25% of revenues)
from natural gas;
- Production growth of 4% – 6%
above the 2009 targeted production level of 2.5 million BOE;
and
- Interest expense of $22 - $23
million.
Approximately $38 million, or 76%, of the 2010 budget targets
development and exploitation drilling and recompletions from the
company’s mature and developing fields aimed at increasing
production in the near term, while approximately $6 million, or
12%, is allocated to exploratory activities, for a total of $44
million, or 88% of the budget dedicated to growing production in
2010 through the drillbit. The remaining $6 million, or 12% of the
2010 budget, is allocated to capitalized geological and geophysical
expenditures (G&G), land and seismic costs, with the objective
of creating new drilling opportunities for 2011 and beyond.
“In contrast to RAM’s 2009 capital budget aimed at maintaining
production, the 2010 budget targets rekindling production growth
and represents an increase of approximately 50% over that targeted
for the 2009 year. The size and scope of our preliminary capital
budget for 2010 is an expression of our aim to increase production
over the near term from our existing inventory of drilling
opportunities in established plays along with two new exploratory
projects,” said Larry E. Lee, Chairman and CEO.
Developing Fields
South Texas
RAM has allocated a substantial $22 million, or 44% of the total
capital budget, to its developing fields in South Texas. In South
Texas, RAM has continued to expand field boundaries with new
seismic interpretation and successful drilling results, primarily
in the company’s LaCopita field in Starr County. Plans call for
drilling a total of 9 locations in South Texas during 2010. In
total, the company has identified over 70 drilling locations in
South Texas.
Barnett Shale
In the Barnett Shale play of North Central Texas, RAM’s capital
budget for 2010 focuses on resuming the exploitation and
development projects largely set aside during the environment of
low natural gas prices which prevailed during much of 2009. RAM has
allocated $3 million, or 6% of the total budget, to drilling on its
jointly held leases with Devon Energy. In addition RAM has an
interest in 22 gross producing wells and an inventory of more than
60 seismically identified locations on its held by production
Barnett Shale acreage.
Mature Fields
North Texas
In North Texas, the company plans to raise its existing level of
development drilling and recompletion activity to which a total of
$9 million, or 18%, of the total budget is allocated. Of the total
spending in the North Texas area, a majority of the activity will
focus on drilling in the company’s Electra/Burkburnett field. RAM
has budgeted $9 million to drill 53 wells in Electra/Burkburnett
during 2010, a 47% increase over an expected 36 wells in 2009. The
focus of such drilling is the continued conversion of the company’s
substantial inventory of PUD locations to proved producing
reserves. The company has an inventory of over 230 identified
locations on its Electra/Burkburnett properties.
Oklahoma
The company has allocated $2 million for drilling and production
enhancement operations during 2010 in its Northeast Fitts Unit Area
targeting a variety of projects including increased density
drilling, waterflood enhancement and workover activity. These
fields are long life, shallow oil fields under active waterflood.
Principal activities will focus on the drilling of 8 infill wells
in an effort to encounter bypassed reserves and test the waterflood
response in production volumes through increasing the density of
the company’s injectors and producers.
Exploration
The company has allocated $6 million, or 12%, of its 2010
non-acquisition capital budget to exploratory activities, with
approximately 50% of that amount to be spent on testing the
commerciality of its Osage concession in Northeastern Oklahoma on
targets identified as a result of processing seismic data collected
by the company during the second half of 2009. The remaining 50% of
the 2010 exploration budget is allocated to a pending exploration
project in South Texas.
4Q09 Operations Update
In order to get a running start at growing production in 2010,
during the fourth quarter of 2009 RAM increased the pace of
drilling activity in its South Texas developing fields area
targeting conventional natural gas with significant associated
condensate. The Garza-Hitchcock #19 well (100% WI), which was
drilled to a depth of 9,780 feet and produced over 3,500 Mcf per
day equivalent during the month of November 2009, is a testament to
the company’s ever increasing technical understanding of the play
as RAM extends the field. A second well, the Brannan #7 (75% WI),
has reached projected total depth and is expected to be completed
by year-end. A third well, the Garza-Hitchcock # 21, is scheduled
to spud in late December and is targeted for completion early in
the first quarter 2010. In the third quarter of 2009, RAM produced
approximately 8,500 Mcf per day equivalent from its producing wells
in South Texas. During the fourth quarter, RAM completed its
initial seismic acquisition activity on its Osage concession
acreage in Northeastern Oklahoma and has begun processing the data
with the goal of identifying targets and initiating drilling during
the second quarter 2010.
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 or targets of production, drilling, planned capital
spending, 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 natural 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 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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