Attached files
| file | filename |
|---|---|
| 8-K - RAM ENERGY RESOURCE, INC. FORM 8-K - BATTALION OIL CORP | ram8k-80911.htm |
|
Immediate Release
|
For Further Information Contact
|
|
Monday, August 8, 2011
|
Robert E. Phaneuf
Vice President - Corporate Development
(918) 632-0680
|
RAM ENERGY RESOURCES REPORTS SECOND QUARTER 2011 RESULTS
AND UPDATE TO OSAGE MISSISSIPPIAN PLAY
|
-
|
RAM Reports 2Q 2011 Net Income of $8.9 Million, or $0.11 Per share
|
|
-
|
2Q 2011 Free Cash Flow of $7.7 Million, or $0.10 Per Share
|
|
-
|
Sustained production in excess of 100 BOE per day from the Surber #1-26 Well in the Company’s Osage Mississippian Play
|
Tulsa, Oklahoma – RAM Energy Resources, Inc. (Nasdaq: RAME) today announced second quarter 2011 earnings and financial highlights as well as an update on its testing of several wells in the Southern Surber area of the company’s Osage Mississippian exploration play.
RAM Reports 2Q 2011 Net Income of $8.9 Million vs. $2.7 Million in 2Q2010
For the quarter ended June 30, 2011, RAM reported net income of $8.9 million, or $0.11 per share, compared to $2.7 million, or $0.03 per share, in the year-ago quarter.
Modified EBITDA (a non-GAAP measure) was $11.6 million for the 2Q11, compared with $12.5 million in last year’s quarter. Similarly, free cash flow (a non-GAAP measure) was $7.7 million, or $0.10 per share, for this year’s second quarter compared to $7.2 million, or $0.09 per share, in last year’s second quarter.
Update to Osage Concession Activity
Southern Surber Area
Modifications to the company’s production facilities and salt water disposal well have been completed, and RAM has begun the process of testing previously drilled wells that have been shut in pending completion of these improvements. In addition, the company is adding a natural gas powered electric generator to the central tank battery which will provide electricity to run submersible pumps in the Surber #1-26 and Rickets #3-26 wells and additional pumps, if needed, to increase the capacity of the water disposal facilities. Plans are to permit a second salt water disposal well for fluid disposal from the recently drilled wells and to service future wells in this area. The Surber #1-26 well, which was fracture stimulated in late March, continues to produce at rates well above the type curve, producing about 108 barrels of oil equivalent per day, or BOEPD (composed of 55 barrels of oil and 317 MCF of high BTU natural gas). Initial production testing on the Surber #1-35, Ricketts #2-35 and Surber #2-T, after having been acidized but not fractured , currently aggregates to 17 BOEPD (composed of 8 barrels of oil and 52 MCF of high BTU natural gas). As a result of the excellent response observed to date after fracturing the Surber #1-26 well, the company is evaluating plans to also apply a slick water frac treatment to the Surber #1-35, Ricketts #2-35 and Surber #2-T, with the expectation of achieving increased production volumes. The Rickets #3-26, which was drilled to the Mississippi Chat in late 2010 and fractured stimulated in April of this year, is scheduled for testing in mid-August. The well is currently shut in pending installation of the field electric generator to enhance salt water disposal capacity.
Central Mashunkashey Area
The Farmland #2-16 well, drilled in mid-April and completed in the Bartlesville formation, is producing 5 BOPD while recovering load water from a small fracture stimulation treatment initiated in late July. The Christenson #3-2, which initially tested at 750 MCFPD (125 BOEPD) of natural gas from the Arbuckle formation, is awaiting additional testing uphole in the Mississippi Dense (Lime) formation.
Additional Planned Activity
RAM plans to drill four wells targeting the Mississippi formation in the third quarter of 2011, including the Jones #1-33 and Kendrick #1-27 in the Northern Jones portion of the concession, the Cooper #3-35 (a recent replacement for the previously planned Stuart #1-28 well) in the Southern Surber area, and the Farmland #1-20 well in the Central Mashunkashey area. RAM is tentatively planning to drill its first horizontal Mississippi well in the Southern Surber area in early 2012.
The company’s Phase 2 seismic survey, which covers 31 square miles of the concession to the south and east of the 25 square mile Phase 1 seismic survey, has been completed. Processing and interpretation are underway with initial results expected in mid-September.
1
Second Quarter Results
Crude oil and natural gas liquids (NGL) production remained consistently high in the second quarter of 2011, accounting for 71% of total company production. Crude oil and NGL production in 2Q11 was 270 thousand barrels, up slightly compared to 269 thousand barrels of oil and NGL produced in the first quarter of 2011. Total production in 2Q11 was 380 thousand BOE, down 31% from 549 thousand BOE in 2Q10. Excluding production in the year ago quarter of 101 thousand BOE attributable to properties sold in December 2010, RAM’s production would have decreased by 15%, as shown in the accompanying table, Components of Production Decline, due primarily to normal production declines and the shutting in of one well in Louisiana in conjunction with a major workover. Given the company’s continuing outlook for lackluster natural gas prices in the intermediate term, capital spending has focused predominantly on the company’s substantial inventory of crude oil projects rather than those expected to be primarily natural gas.
The company’s realized price for oil increased 33% to an average of $100.81 per barrel in 2Q11 compared with last year’s second quarter average realized price of $75.57 per barrel. In addition, the price of NGLs grew 59% in 2Q11, averaging $57.34 per barrel, compared to the average of $36.04 per barrel for last year’s second quarter. Similarly, the company’s realized price for natural gas rose 9% in 2Q11 to an average of $4.26 per Mcf compared to an average of $3.92 per Mcf in the second quarter of 2010. The positive impact from the 49% increase in total average price per BOE in 2Q11 more than offset the impact from asset sales and normal production declines, allowing oil and gas revenue for the second quarter to grow to $28.1 million, compared to $27.2 million in the year ago second quarter. Oil and NGL production accounted for 90% of total oil and natural gas sales in 2Q11, up slightly from the 1Q11 level of 89%.
Derivative activity resulted in a $8.6 million net gain in the 2Q11, comprised of $10.7 million in unrealized mark-to-market gains, partially offset by realized losses from contract settlements and premium costs of $2.1 million (which included a $1.4 million charge associated with unwinding and novation of certain contracts in connection with the Company’s recent refinancing). As a result, total revenues for the quarter rose to $36.8 million. Derivative activity in last year’s second quarter resulted in a $1.7 million net gain, raising total revenue to $29.0 million in 2Q10.
Production expenses were $8.2 million in 2Q11, down $0.5 million from $8.7 million in 2Q10; however, excluding expenses attributable to sold properties, production expenses for 2Q10 would have been level with the year ago quarter. Production taxes were $1.5 million in 2Q11, up slightly compared to production taxes of $1.3 million, excluding asset sales, in the same quarter last year, primarily due to higher hydrocarbon prices during 2Q11. Other expenses include an $0.8 million charge for a legal settlement relating to a disputed ownership interest in an Oklahoma well.
Six Month 2011 Results
Oil and natural gas sales decreased $3.2 million, or 6%, to $53.8 million for the six months ended June 30, 2011, as compared to $57.1 million for the same period in 2010. Excluding production from the sale properties, oil and natural gas sales would have increased $3.1 million for the six months ended June 30, 2011 as compared to the same period in 2010. This increase was driven primarily by higher commodity prices during the 2011 period. Production volumes decreased 31% compared to the same period last year; however production from sold properties and the shutting in of one well in Louisiana for a major workover accounted for approximately 65% of the decline. Net loss for the six months ended June 30, 2011 was $1.0 million, or $0.01 per share, compared to net income of $5.1 million, or $0.07 per share, in the year-ago period. Results for the June 30, 2011 period were negatively impacted by unrealized derivative losses and debt extinguishment costs. Results of the June 30, 2010 period were positively impacted by unrealized derivative gains.
Modified EBITDA (a non-GAAP measure) was $24.6 million for the six months ended June 30, 2011 compared with $28.2 million in last year’s first half. Similarly, free cash flow for the first half of 2011 totaled $15.4 million, or $0.20 a share, compared with $18.5 million, or $0.24 a share, for the six month period ending June 30, 2010.
Long-Term Debt and Liquidity
At June 30, 2011, RAM’s outstanding borrowings under its credit facility totaled $205.0 million, including $75.0 million outstanding under its second lien term loan and $130.0 million drawn on its revolver, which is currently subject to a $150.0 million borrowing base. Total outstanding borrowings under the credit facility at June 30 last year totaled $245.0 million.
Interest expense for 2Q11 was $3.6 million compared to $5.7 million in the year-ago quarter. The decrease is due to lower interest rates under the company’s new credit facility completed in the first quarter of this year and lower average outstanding borrowings during this year’s quarter. The blended interest rate on borrowings was 6.2% in 2Q11 compared to 8.2% in last year’s quarter.
2
Capital Expenditures and Revised Plans for 2011
Capital expenditures during 2Q11 totaled $7.9 million, including $7.7 million attributable to development and exploration costs and $0.2 million for proved property acquisitions. During 2Q11 RAM participated in the drilling of 10 gross (9.2 net) development wells and 5 gross (5.0 net) exploration wells. Nine gross (8.2 net) development wells were capable of production. One gross (1.0 net) development well was in the process of testing at the end of the quarter. Five gross (5.0 net) exploration wells were either testing or waiting on completion and/or equipment at the end of the second quarter. RAM has revised its non-acquisition capital budget for the 2011 year to $29.0 million, a decrease of $6.0 million from the previously announced level of $35.0 million. Substantially all of the change is attributable to a reduction for development drilling and recompletions, primarily on our South Texas natural gas properties. The total allocated to exploration as well as geological, geophysical and seismic remains the same at $17.0 million. Consistent with prior years, the company expects all non-acquisition capital expenditures to be funded out of cash flow.
Pending the outcome of the proposed asset sale of a 90% interest in the Electra Burkburnett fields, RAM’s previously disclosed guidance of 1.7 million to 1.8 million BOE of production for 2011 and modified EBITDA of $52.0 to $55.0 million for 2011 is no longer valid.
RAM to Webcast Second Quarter 2011 Conference Call
The company’s teleconference call to review second quarter results will be broadcast live on a listen-only basis over the internet on Tuesday, August 9, 2011 at 11:00 a.m. Eastern Daylight 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 Events and Presentations tab. The teleconference may be accessed by dialing (877) 645-6210 (domestic) or (970) 315-0430 (international) and providing the ID number “87189296” to the operator. The webcast will be available for replay on the company’s website following the call’s completion. An audio replay will be available until August 16, 2011 by dialing (855) 859-2056 and referencing the ID number “87189296”.
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 planned drilling, or other expected activities, well tests, anticipated production, the impact of oil and gas derivatives, borrowing availability, 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.
About RAM Energy
RAM Energy Resources, Inc. is an independent energy company engaged in the acquisition, exploitation, exploration, and development of oil and natural 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 RAM. For additional information, visit the company website at www.ramenergy.com.
3
|
RAM Energy Resources, Inc.
|
|||
|
Condensed Consolidated Balance Sheets
|
|||
|
(in thousands, except share and per share amounts)
|
|||
|
June 30,
|
December 31,
|
||
|
2011
|
2010
|
||
|
(unaudited)
|
|||
|
ASSETS
|
|||
|
CURRENT ASSETS:
|
|||
|
Cash and cash equivalents
|
$ 454
|
$ 37
|
|
|
Accounts receivable:
|
|||
|
Oil and natural gas sales, net of allowance of $50 ($50 at December 31, 2010)
|
9,657
|
9,797
|
|
|
Joint interest operations, net of allowance of $479 ($479 at December 31, 2010)
|
724
|
631
|
|
|
Other, net of allowance of $34 ($48 at December 31, 2010)
|
152
|
155
|
|
|
Derivative assets
|
-
|
1,340
|
|
|
Prepaid expenses
|
1,030
|
1,657
|
|
|
Deferred tax asset
|
7,422
|
3,526
|
|
|
Inventory
|
3,812
|
3,382
|
|
|
Other current assets
|
384
|
4
|
|
|
Total current assets
|
23,635
|
20,529
|
|
|
PROPERTIES AND EQUIPMENT, AT COST:
|
|||
|
Proved oil and natural gas properties and equipment, using full cost accounting
|
702,668
|
689,472
|
|
|
Other property and equipment
|
10,438
|
10,072
|
|
|
713,106
|
699,544
|
||
|
Less accumulated depreciation, amortization and impairment
|
(499,994)
|
(489,634)
|
|
|
Total properties and equipment
|
213,112
|
209,910
|
|
|
OTHER ASSETS:
|
|||
|
Deferred tax asset
|
29,058
|
31,001
|
|
|
Deferred loan costs, net of accumulated amortization of $381 ($5,012 at December 31, 2010)
|
6,622
|
2,609
|
|
|
Other
|
978
|
952
|
|
|
Total assets
|
$ 273,405
|
$ 265,001
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
|
|||
|
CURRENT LIABILITIES:
|
|||
|
Accounts payable:
|
|||
|
Trade
|
$ 13,807
|
$ 17,149
|
|
|
Oil and natural gas proceeds due others
|
9,455
|
9,414
|
|
|
Other
|
155
|
452
|
|
|
Accrued liabilities:
|
|||
|
Compensation
|
1,794
|
1,948
|
|
|
Interest
|
502
|
2,448
|
|
|
Income taxes
|
334
|
699
|
|
|
Other
|
640
|
10
|
|
|
Derivative liabilities
|
1,576
|
-
|
|
|
Asset retirement obligations
|
352
|
639
|
|
|
Long-term debt due within one year
|
146
|
127
|
|
|
Total current liabilities
|
28,761
|
32,886
|
|
|
DERIVATIVE LIABILITIES
|
3,079
|
203
|
|
|
LONG-TERM DEBT
|
205,289
|
196,965
|
|
|
ASSET RETIREMENT OBLIGATIONS
|
31,504
|
30,770
|
|
|
OTHER LONG-TERM LIABILITIES
|
10
|
10
|
|
|
COMMITMENTS AND CONTINGENCIES
|
|||
|
STOCKHOLDERS' EQUITY (DEFICIT):
|
|||
|
Common stock, $0.0001 par value, 100,000,000 shares authorized, 83,386,299 and 82,597,829 shares issued,
|
|||
|
79,120,829 and 78,386,983 shares outstanding at June 30, 2011 and December 31, 2010, respectively
|
8
|
8
|
|
|
Additional paid-in capital
|
227,720
|
226,042
|
|
|
Treasury stock - 4,265,470 shares (4,210,846 shares at December 31,2010) at cost
|
(7,084)
|
(6,976)
|
|
|
Accumulated deficit
|
(215,882)
|
(214,907)
|
|
|
Stockholders' equity
|
4,762
|
4,167
|
|
|
Total liabilities and stockholders' equity
|
$ 273,405
|
$ 265,001
|
|
4
|
RAM Energy Resources, Inc.
|
|||||||
|
Condensed Consolidated Statements of Operations
|
|||||||
|
(in thousands, except share and per share amounts)
|
|||||||
|
(unaudited)
|
|||||||
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||
|
2011
|
2010
|
2011
|
2010
|
||||
|
REVENUES AND OTHER OPERATING INCOME:
|
|||||||
|
Oil and natural gas sales
|
|||||||
|
Oil
|
$ 22,783
|
$ 19,120
|
$ 43,195
|
$ 38,608
|
|||
|
Natural gas
|
2,812
|
4,818
|
5,704
|
11,247
|
|||
|
NGLs
|
2,523
|
3,280
|
4,938
|
7,211
|
|||
|
Total oil and natural gas sales
|
28,118
|
27,218
|
53,837
|
57,066
|
|||
|
Realized losses on derivatives
|
(2,098)
|
(707)
|
(1,262)
|
(1,605)
|
|||
|
Unrealized gains (losses) on derivatives
|
10,728
|
2,419
|
(4,225)
|
4,354
|
|||
|
Other
|
34
|
38
|
85
|
74
|
|||
|
Total revenues and other operating income
|
36,782
|
28,968
|
48,435
|
59,889
|
|||
|
OPERATING EXPENSES:
|
|||||||
|
Oil and natural gas production taxes
|
1,478
|
1,453
|
2,889
|
3,047
|
|||
|
Oil and natural gas production expenses
|
8,174
|
8,662
|
16,549
|
16,582
|
|||
|
Depreciation and amortization
|
5,196
|
6,891
|
10,469
|
13,605
|
|||
|
Accretion expense
|
412
|
454
|
814
|
836
|
|||
|
Share-based compensation
|
686
|
785
|
1,355
|
1,471
|
|||
|
General and administrative, overhead and other expenses, net of
|
|||||||
|
operator's overhead fees
|
3,935
|
3,992
|
7,813
|
7,762
|
|||
|
Total operating expenses
|
19,881
|
22,237
|
39,889
|
43,303
|
|||
|
Operating income
|
16,901
|
6,731
|
8,546
|
16,586
|
|||
|
OTHER INCOME (EXPENSE):
|
|||||||
|
Interest expense
|
(3,563)
|
(5,714)
|
(10,113)
|
(11,349)
|
|||
|
Interest income
|
3
|
2
|
3
|
4
|
|||
|
Loss on interest rate derivatives
|
(362)
|
-
|
(495)
|
-
|
|||
|
Other income (expense)
|
(801)
|
570
|
(753)
|
561
|
|||
|
INCOME (LOSS) BEFORE INCOME TAXES
|
12,178
|
1,589
|
(2,812)
|
5,802
|
|||
|
INCOME TAX PROVISION (BENEFIT)
|
3,242
|
(1,140)
|
(1,837)
|
655
|
|||
|
Net income (loss)
|
$ 8,936
|
$ 2,729
|
$ (975)
|
$ 5,147
|
|||
|
BASIC INCOME (LOSS) PER SHARE
|
$ 0.11
|
$ 0.03
|
$ (0.01)
|
$ 0.07
|
|||
|
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING
|
78,834,159
|
78,446,305
|
78,598,387
|
78,222,925
|
|||
|
DILUTED INCOME (LOSS) PER SHARE
|
$ 0.11
|
$ 0.03
|
$ (0.01)
|
$ 0.07
|
|||
|
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING
|
78,834,159
|
78,446,305
|
78,598,387
|
78,222,925
|
|||
5
|
RAM Energy Resources, Inc.
|
|||
|
Condensed Consolidated Statements of Cash Flows
|
|||
|
(in thousands)
|
|||
|
(unaudited)
|
|||
|
Six months ended June 30,
|
|||
|
2011
|
2010
|
||
|
OPERATING ACTIVITIES:
|
|||
|
Net income (loss)
|
$ (975)
|
$ 5,147
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities-
|
|||
|
Depreciation and amortization
|
10,469
|
13,605
|
|
|
Amortization of deferred loan costs
|
2,990
|
1,044
|
|
|
Non-cash interest
|
362
|
1,543
|
|
|
Accretion expense
|
814
|
836
|
|
|
Unrealized (gain) loss on commodity derivatives, net of premium amortization
|
5,474
|
(2,997)
|
|
|
Unrealized loss on interest rate derivatives
|
418
|
-
|
|
|
Deferred income tax provision (benefit)
|
(1,953)
|
268
|
|
|
Share-based compensation
|
1,355
|
1,471
|
|
|
Gain on disposal of other property and equipment
|
(22)
|
(41)
|
|
|
Other income
|
-
|
(550)
|
|
|
Changes in operating assets and liabilities-
|
|||
|
Accounts receivable
|
49
|
3,237
|
|
|
Prepaid expenses, inventory and other assets
|
(208)
|
657
|
|
|
Derivative premiums
|
(111)
|
(2,866)
|
|
|
Accounts payable and proceeds due others
|
(3,553)
|
1,028
|
|
|
Accrued liabilities and other
|
(1,459)
|
(1,004)
|
|
|
Income taxes payable
|
(365)
|
(177)
|
|
|
Asset retirement obligations
|
(242)
|
-
|
|
|
Total adjustments
|
14,018
|
16,054
|
|
|
Net cash provided by operating activities
|
13,043
|
21,201
|
|
|
INVESTING ACTIVITIES:
|
|||
|
Payments for oil and natural gas properties and equipment
|
(13,500)
|
(18,666)
|
|
|
Proceeds from sales of oil and natural gas properties
|
462
|
478
|
|
|
Payments for other property and equipment
|
(469)
|
(358)
|
|
|
Proceeds from sales of other property and equipment
|
11
|
4
|
|
|
Net cash used in investing activities
|
(13,496)
|
(18,542)
|
|
|
FINANCING ACTIVITIES:
|
|||
|
Payments on long-term debt
|
(223,185)
|
(24,576)
|
|
|
Proceeds from borrowings on long-term debt
|
231,166
|
22,132
|
|
|
Payments for deferred loan costs
|
(7,003)
|
-
|
|
|
Stock repurchased
|
(108)
|
(326)
|
|
|
Net cash provided by (used in) financing activities
|
870
|
(2,770)
|
|
|
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
|
417
|
(111)
|
|
|
CASH AND CASH EQUIVALENTS, beginning of period
|
37
|
129
|
|
|
CASH AND CASH EQUIVALENTS, end of period
|
$ 454
|
$ 18
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION:
|
|||
|
Cash paid for income taxes
|
$ 481
|
$ 565
|
|
|
Cash paid for interest
|
$ 8,706
|
$ 9,107
|
|
|
DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES:
|
|||
|
Asset retirement obligations
|
$ (129)
|
$ 118
|
|
6
|
RAM ENERGY RESOURCES, INC.
|
|||||||||
|
PRODUCTION BY AREA
|
|||||||||
|
(unaudited)
|
|||||||||
|
Texas
|
Oklahoma
|
Louisiana
|
Other
|
Total
|
|||||
|
Three Months Ended June 30, 2011
|
|||||||||
|
Aggregate Net Production
|
|||||||||
|
Oil (MBbls)
|
128
|
74
|
16
|
8
|
226
|
||||
|
NGLs (MBbls)
|
38
|
2
|
-
|
4
|
44
|
||||
|
Natural Gas (MMcf)
|
412
|
107
|
105
|
36
|
660
|
||||
|
MBoe
|
234
|
94
|
33
|
19
|
380
|
||||
|
Three Months Ended June 30, 2010
|
|||||||||
|
Aggregate Net Production
|
|||||||||
|
Oil (MBbls)
|
142
|
82
|
22
|
7
|
253
|
||||
|
NGLs (MBbls)
|
85
|
2
|
-
|
4
|
91
|
||||
|
Natural Gas (MMcf)
|
774
|
224
|
192
|
40
|
1,230
|
||||
|
MBoe
|
356
|
121
|
54
|
18
|
549
|
||||
|
Change in MBoe
|
(122)
|
(27)
|
(21)
|
1
|
(169)
|
||||
|
Percentage Change in MBoe
|
-34.3%
|
-22.3%
|
-38.9%
|
5.6%
|
-30.8%
|
||||
|
Texas
|
Oklahoma
|
Louisiana
|
Other
|
Total
|
|||||
|
Six Months Ended June 30, 2011
|
|||||||||
|
Aggregate Net Production
|
|||||||||
|
Oil (MBbls)
|
253
|
148
|
32
|
15
|
448
|
||||
|
NGLs (MBbls)
|
79
|
5
|
-
|
7
|
91
|
||||
|
Natural Gas (MMcf)
|
856
|
187
|
258
|
69
|
1,370
|
||||
|
MBoe
|
474
|
184
|
75
|
34
|
767
|
||||
|
Six Months Ended June 30, 2010
|
|||||||||
|
Aggregate Net Production
|
|||||||||
|
Oil (MBbls)
|
291
|
163
|
39
|
17
|
510
|
||||
|
NGLs (MBbls)
|
177
|
5
|
-
|
7
|
189
|
||||
|
Natural Gas (MMcf)
|
1,638
|
436
|
347
|
78
|
2,499
|
||||
|
MBoe
|
741
|
240
|
97
|
37
|
1,115
|
||||
|
Change in MBoe
|
(267)
|
(56)
|
(22)
|
(3)
|
(348)
|
||||
|
Percentage Change in MBoe
|
-36.0%
|
-23.3%
|
-22.7%
|
-8.1%
|
-31.2%
|
||||
7
|
RAM Energy Resources, Inc.
|
||||
|
Components of Production Decline
|
||||
| (unaudited) | ||||
| Three months ended | Six months ended | |||
|
June 30
|
June 30
|
|||
|
(MBOE)
|
(MBOE)
|
|||
|
Total production, 2010
|
549
|
1,115
|
||
|
Declines due to:
|
||||
|
RAM Texas and Oklahoma gas properties sold in 2010
|
(101)
|
(205)
|
||
|
Natural production declines in South Texas gas production
|
(24)
|
(71)
|
||
|
Lousiana well shut-in
|
(12)
|
(17)
|
||
|
Other
|
(32)
|
(55)
|
||
|
Total declines
|
(169)
|
(348)
|
||
|
Total production, 2011
|
380
|
767
|
||
8
2010 Pro Forma Selected Results Excluding Sold Properties (a)
(unaudited)
|
Three months ended
June 30, 2010
|
|||||||||||
|
Actual
|
Sold Assets
|
Pro Forma
|
|||||||||
|
Oil and natural gas sales (in thousands):
|
|||||||||||
|
Oil
|
$
|
19,120
|
$
|
346
|
$
|
18,774
|
|||||
|
Natural gas
|
4,818
|
1,244
|
3,574
|
||||||||
|
NGLs
|
3,280
|
1,291
|
1,989
|
||||||||
|
Total oil and natural gas sales
|
$
|
27,218
|
$
|
2,881
|
$
|
24,337
|
|||||
|
Production expenses (in thousands):
|
|||||||||||
|
Oil and natural gas production taxes
|
$
|
1,453
|
$
|
125
|
$
|
1,328
|
|||||
|
Oil and natural gas production expenses
|
$
|
8,662
|
$
|
454
|
$
|
8,208
|
|||||
|
Production volumes:
|
|||||||||||
|
Texas (Mboe)
|
356
|
86
|
270
|
||||||||
|
Oklahoma (Mboe)
|
121
|
15
|
106
|
||||||||
|
Other (Mboe)
|
72
|
—
|
72
|
||||||||
|
Total production (Mboe)
|
549
|
101
|
448
|
||||||||
|
Six months ended
June 30, 2010
|
|||||||||||
|
|
|||||||||||
|
Actual
|
Sold Assets
|
Pro Forma
|
|||||||||
|
Oil and natural gas sales (in thousands):
|
|||||||||||
|
Oil
|
$
|
38,608
|
$
|
677
|
$
|
37,931
|
|||||
|
Natural gas
|
11,247
|
2,874
|
8,373
|
||||||||
|
NGLs
|
7,211
|
2,773
|
4,438
|
||||||||
|
Total oil and natural gas sales
|
$
|
57,066
|
$
|
6,324
|
$
|
50,742
|
|||||
|
Production expenses (in thousands):
|
|||||||||||
|
Oil and natural gas production taxes
|
$
|
3,047
|
$
|
253
|
$
|
2,794
|
|||||
|
Oil and natural gas production expenses
|
$
|
16,582
|
$
|
945
|
$
|
15,637
|
|||||
|
Production volumes:
|
|||||||||||
|
Texas (Mboe)
|
741
|
171
|
570
|
||||||||
|
Oklahoma (Mboe)
|
240
|
34
|
206
|
||||||||
|
Other (Mboe)
|
134
|
—
|
134
|
||||||||
|
Total production (Mboe)
|
1,115
|
205
|
910
|
||||||||
|
(a)
|
In December 2010 RAM sold assets in Texas and Oklahoma for net proceeds of $48 million. The table above provides actual and pro forma results for the three and six months ending June 30, 2010 to assist our description of results of operations.
|
9
|
RAM Energy Resources, Inc.
|
||||
|
Production and Prices Summary
|
||||
|
Three Months Ended
|
Six Months Ended
|
|||
|
June 30, 2011
|
June 30, 2011
|
|||
|
Production volumes:
|
||||
|
Oil (MBbls)
|
226
|
448
|
||
|
NGL (MBbls)
|
44
|
91
|
||
|
Natural gas (MMcf)
|
660
|
1,370
|
||
|
Total (Mboe)
|
380
|
767
|
||
|
Average sale prices received:
|
||||
|
Oil (per Bbl)
|
$ 100.81
|
$ 96.42
|
||
|
NGL (per Bbl)
|
$ 57.34
|
$ 54.26
|
||
|
Natural gas (per Mcf)
|
$ 4.26
|
$ 4.16
|
||
|
Total per Boe
|
$ 73.99
|
$ 70.19
|
||
|
Cash effect of derivative contracts:
|
||||
|
Oil (per Bbl)
|
$ (8.65)
|
$ (6.63)
|
||
|
NGL (per Bbl)
|
$ -
|
$ -
|
||
|
Natural gas (per Mcf)
|
$ (0.22)
|
$ 1.25
|
||
|
Total per Boe
|
$ (5.52)
|
$ (1.65)
|
||
|
Average prices computed after cash effect
|
||||
|
of settlement of derivative contracts:
|
||||
|
Oil (per Bbl)
|
$ 92.16
|
$ 89.79
|
||
|
NGL (per Bbl)
|
$ 57.34
|
$ 54.26
|
||
|
Natural gas (per Mcf)
|
$ 4.04
|
$ 5.41
|
||
|
Total per Boe
|
$ 68.47
|
$ 68.54
|
||
|
Expenses (per Boe):
|
||||
|
Oil and natural gas production taxes
|
$ 3.89
|
$ 3.77
|
||
|
Oil and natural gas production expenses
|
$ 21.51
|
$ 21.58
|
||
|
General and administrative
|
$ 10.36
|
$ 10.19
|
||
|
Cash interest
|
$ 8.82
|
$ 11.35
|
||
|
Cash taxes
|
$ 1.33
|
$ 0.63
|
||
|
Total Cash Expenses per Boe
|
$ 45.91
|
$ 47.52
|
||
10
RAM Energy Resources, Inc.
Modified EBITDA and Free Cash Flow
(non-GAAP measures)
(unaudited)
Non-GAAP Financial Measures
Modified EBITDA, a non-GAAP measure, is determined by adding the following to net income (loss): interest expense, income taxes, depreciation, amortization, accretion, share-based compensation, impairment charges, unrealized gains or losses on derivatives. Free cash flow is also a non-GAAP measure representing Modified EBITDA after adjustments for the cash portion of interest and income taxes. These non-GAAP measures are presented because management believes it is a useful adjunct to cash provided by operating activities under accounting principles generally accepted in the United States (GAAP). These non-GAAP measures are widely accepted as financial indicators of an oil and gas company’s ability to generate cash used to internally fund exploration and development activities and fund debt service costs. These non-GAAP measures are not a measure of financial performance under GAAP and should not be considered as an alternative to cash provided (used) by operating, investing, or financing activities as an indicator of cash flows, or as a measure of liquidity.
|
$000s, except per share amounts
|
||||||
|
Three Months Ended
|
Six Months Ended
|
|||||
|
6/30/2011
|
6/30/2010
|
6/30/2011
|
6/30/2010
|
|||
|
Modified EBITDA:
|
||||||
|
Net income (loss)
|
$ 8,936
|
$ 2,729
|
$ (975)
|
$ 5,147
|
||
|
Plus: Interest expense
|
$ 3,291
|
$ 4,414
|
$ 6,675
|
$ 8,762
|
||
|
Plus: PIK interest
|
$ -
|
$ 778
|
$ 448
|
$ 1,543
|
||
|
Plus: Amortization of deferred loan costs
|
$ 272
|
$ 522
|
$ 2,990
|
$ 1,044
|
||
|
Plus: Depreciation, amortization and accretion
|
$ 5,608
|
$ 7,345
|
$ 11,283
|
$ 14,441
|
||
|
Plus: Share-based compensation
|
$ 686
|
$ 785
|
$ 1,355
|
$ 1,471
|
||
|
Plus: Income tax provision (benefit)
|
$ 3,242
|
$ (1,140)
|
$ (1,837)
|
$ 655
|
||
|
Plus: MTM legal settlement
|
$ -
|
$ (550)
|
$ -
|
$ (550)
|
||
|
Less: Unrealized (gain) loss on derivatives
|
$ (10,432)
|
$ (2,419)
|
$ 4,643
|
$ (4,354)
|
||
|
Modified EBITDA
|
$ 11,603
|
$ 12,464
|
$ 24,582
|
$ 28,159
|
||
|
Less:
|
||||||
|
Cash paid for interest
|
$ 3,351
|
$ 4,760
|
$ 8,706
|
$ 9,107
|
||
|
Cash paid for income tax
|
$ 504
|
$ 501
|
$ 481
|
$ 565
|
||
|
Free cash flow
|
$ 7,748
|
$ 7,203
|
$ 15,395
|
$ 18,487
|
||
|
Weighted average shares outstanding - basic
|
78,834
|
78,446
|
78,598
|
78,223
|
||
|
Weighted average shares outstanding - diluted
|
78,834
|
78,446
|
78,598
|
78,223
|
||
|
Free cash flow per share - basic
|
$ 0.10
|
$ 0.09
|
$ 0.20
|
$ 0.24
|
||
|
Free cash flow per share - diluted
|
$ 0.10
|
$ 0.09
|
$ 0.20
|
$ 0.24
|
||