RAM Energy Resources Reports 2008 Production Slightly Exceeds Prior Guidance; Announces Preliminary Capital Budget for 2009
February 17 2009 - 2:00PM
Business Wire
RAM Energy Resources, Inc. (Nasdaq: RAME) reported today that
total 2008 production exceeded previous guidance of 2.550 million
barrels of oil equivalent (BOE). In addition, the company announced
preliminary capital expenditure plans and assumptions for the 2009
year.
2009 Preliminary Capital Expenditure Plans and
Targets
RAM Energy established a preliminary non-acquisition capital
budget for 2009 of $40 - $45 million. Consistent with RAM�s
historical strategy, non-acquisition capital expenditures are
targeted to remain within estimated annual cash flow.
Key assumptions supporting the 2009 preliminary capital
expenditure budget are:
- Hydrocarbon prices equal to the
calendar 2009 NYMEX strip prices prevailing at year-end 2008 of
approximately $53 per barrel of oil, $6 per Mcf for natural gas and
$34 per barrel of natural gas liquids (NGLs)
- Production of 2.5 million BOE,
approximately equal to total production in 2008
- Implied gains of $16 - $18
million from derivative positions in place at 12/31/08
- Asset sales of $5 - $10 million,
a continuation of the program to divest non-strategic assets under
which $3.0 million of proceeds were realized in 2008
- EBITDA of $60 - $65 million
- Interest expense of $17 - $18
million
- Voluntary debt repayment of $8 -
$12 million to maintain financial flexibility
�The size and scope of our preliminary capital budget for 2009
is a reflection of the current uncertainty of the depth and length
of the recession, its negative impact on oil and gas prices and the
impasse existing in the capital markets. The aim of the
expenditures in the budget is to offset the company�s natural
production decline while maintaining flexibility in the current
uncertain and volatile hydrocarbon price environment as well as
positioning the company strategically for the 2010 year,� said
Larry Lee, President and CEO. �Accordingly, we have adopted tactics
which target preserving value and liquidity supported by an
operational focus on existing low risk, economically attractive
opportunities,� added Mr. Lee.
Mature Fields and Developing Fields Planned Activity
In the company�s �mature field area� of Electra/Burkburnett,
located in North Texas, the company plans to continue its
multi-year lower risk development drilling activity. A total of 45
wells are planned to be drilled in the field during the 2009 year,
an amount equal to the wells drilled during 2008. The focus of such
drilling is the continued conversion of the company�s substantial
inventory of more than 100 proved undeveloped (PUD) locations to
proved producing reserves. In addition a large number of non-proved
drill sites have been identified.
A total of eight wells were drilled in 2008 in the North East
Fitts Unit and Allen Field, both fields located in Pontotoc County,
Oklahoma. The company was successful in locating by-passed reserves
that set up a number of new drilling locations and recompletions
now budgeted for 2009.
In its �developing field area� of South Texas, RAM is active in
both the Vicksburg and Wilcox formations, having spud six wells
during 2008 in the area. Plans for 2009 call for continued spending
to further develop these two plays, which have a combined inventory
of 27 PUD locations, 13 probable locations and 31 possible
locations.
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
explicit or implicit estimates of, future production, exploitation
activities, operating costs, capital spending, cash flow, EBITDA,
realized prices of oil and gas, the impact of oil and gas
derivative financial instruments, planned asset sales, interest
expense and events or developments that the company expects or
believes are forward-looking statements. Although RAM 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,
developmental, exploitation and exploration successes, actions
taken and to be taken by governments as a result of political and
economic conditions or other factors, inflation rates, 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 is an independent energy company engaged in the acquisition,
development, exploitation and exploration 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 Exchange under the symbol RAME. For additional
information, visit the company website at www.ramenergy.com.
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