RAME Ram Energy Resources, Inc. (MM)

RAM Energy Resources, Inc. (Nasdaq: RAME) today announced the company’s borrowing base reaffirmation and updated operational activity.

2009 Borrowing Base Reaffirmed

As a result of the semi-annual borrowing base redetermination, RAM’s commercial lenders on April 1, 2010 reaffirmed the company’s existing borrowing base of $175.0 million under RAM’s revolving facility based on the company’s proved reserves at year-end 2009. At March 31, 2010 the outstanding balance under the revolving facility was $135.0 million, with remaining availability of $40.0 million. Funds advanced under the revolver may be paid down and re-borrowed during the term of the revolver which matures November 2011. The company also has borrowings under a term loan facility which had an outstanding balance of $111.8 million at March 31, 2010 and a maturity of November 2012. The weighted average LIBOR-based interest rate on total outstanding borrowings under both the revolver and term loan is estimated to be 8.1 percent in the first quarter 2010. “The reaffirmation of our borrowing base and the availability remaining under our revolving credit facility provide an important degree of liquidity and flexibility to both support our capital program and take advantage of other opportunities that may be presented during the current year,” said Larry Lee, President and CEO.

First Quarter 2010 Drilling Activity

During the first quarter ended March 31, 2010 the company drilled 21 gross wells. Of the wells drilled, 11 were completed successfully and 10 were drilling or awaiting completion at the end of the quarter. By comparison the company drilled 14 wells in the first quarter of 2009 and a total of 45 wells for the full year under the conservative capital allocation program in effect for 2009.

The company has a price advantaged revenue stream compared to many of its industry peers as a result of the premium price of oil relative to natural gas prevailing in the market and its above average weighting of oil and natural gas liquids (NGL) in its hydrocarbon mix. Sixty-one percent of RAM’s production is derived from oil and NGLs, the price of which is influenced by the price of oil. RAM’s average price of oil during the first quarter of 2010 of approximately $76/Bbl is nearly double that of the average in the year-ago quarter. With oil and NGLs accounting for an estimated 79% of first quarter total sales, RAM expects its EBITDA for the quarter to meet or exceed its planned expectations. In addition, given the current NYMEX strip of the future price of oil which averages $87/Bbl for the remaining nine months of the year, the company continues to expect that it will meet its target of $65 – $68 million in EBITDA for the year and fully fund its 2010 non-acquisition capital budget from cash flow. Planned non-acquisition capital spending for the 2010 year also remains at its previously disclosed level of $50 million, approximately 68 percent above that of the previous year.

Planned Drilling Activity

For the balance of 2010, RAM plans increased drilling activity drawn from the company’s inventory of over 300 identified proved projects in mature, lower risk areas of Electra/Burkburnett and N. E. Fitts, where the principal production is oil. The capital budget also calls for $22 million to be allocated to drill 9 wells during the year on RAM’s South Texas acreage, however, the recent limited availability of fracture stimulation and other completion services in the near term is likely to cause most of the wells planned for the first half to be drilled but experience a delay in being hooked up to pipelines.

In addition the company is preparing to spud the first of five planned wells in its 80 square mile concession area Osage exploratory venture in northeastern Oklahoma. The 2010 budget related to this venture of $6.0 million includes plans for three vertical wells and two horizontal wells, the first of which is anticipated to spud early in the second quarter. Initial vertical wells are expected to cost $350,000 - $400,000 including the cost of additional scientific testing with subsequent vertical wells anticipated to be drilled for approximately $250,000 - $300,000 each. Exploration on the Osage concession is predominantly an oil play targeting the Mississippi Chat formation as the primary objective and the Arbuckle formation as a secondary objective. Based on the history of wells in the area and the company’s seismic interpretation, RAM estimates an ultimate potential recovery of 40,000 Bbl of oil per well if successful. Due to the large concession size of 80 square miles, there may be ample opportunity for future drilling if the project can be commercialized. No contribution from the Osage project has been factored into current company production guidance.

First Quarter 2010 Production Impact

Production in the first quarter was interrupted by the impact of winter weather, particularly in RAM's mature fields where the company relies on an efficient cycling of drilling and workover activity to maintain production levels. As previously disclosed, severe winter weather impacted production in our North Texas and Oklahoma fields, reducing production by an estimated 45,000 to 50,000 barrels of oil equivalent (BOE). As a result, production was limited in the first quarter to an estimated range of 560,000 to 575,000 BOE. More recently, the timing of the company’s ability to recoup the production lost to weather interruptions in the first quarter through potentially accelerating drilling activity was made more uncertain. Heightened drilling activity in the Eagle Ford shale by competitors operating in South Texas has made it difficult to secure, on a timely basis, service companies for completion work on RAM’s existing inventory of two wells which have been drilled and are awaiting completion and for a third well recently spud. At the current time both the Garza Hitchcock #21 and the Heard # 4 wells are waiting on completion in order to bring their oil, natural gas and NGL products on stream. The delayed access to service companies has increased the uncertainty related to the timing of bringing on anticipated volumes and ultimately the confidence to meet the company’s prior annual production growth target of 2.6 – 2.65 million BOE for 2010. As a result, RAM is trimming its production guidance for the current year to 2.5 – 2.6 million BOE.

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 and costs, production levels, timing of well hook-ups, oil prices, capital spending, projected ultimate well recovery, annual guidance targets, EBITDA and events or other 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 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.

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