RAM Energy Resources Announces Agreement to Sell North Texas Gas Assets
01 Novembre 2010 - 7:33PM
Business Wire
RAM Energy Resources, Inc. (Nasdaq: RAME) today announced it had
signed a purchase and sale agreement effecting the strategic
divestiture of RAM’s North Texas Barnett Shale and Boonsville
properties to a private E&P company for $43.75 million in cash,
subject to customary due diligence and other closing adjustments.
The effective date of the divestiture is October 1, 2010 with the
closing anticipated in early December 2010. The current transaction
represents the first asset sale to be effected pursuant to RAM’s
announced review of strategic alternatives. Management has
previously stated that proceeds from the asset divestitures will be
used to reduce outstanding debt balances.
The properties covered by the purchase and sale agreement
consist of RAM’s interest in its shallow gas, Bend Conglomerate
properties and its deeper Barnett Shale properties, all located in
the Ft. Worth Basin, principally in Jack and Wise Counties, Texas.
Together, proved reserves from these properties accounted for
approximately 26.4 billion cubic feet equivalents (Bcfe) of natural
gas, natural gas liquids and oil, or an estimated 13%, of RAM’s
year-end 2009 proved reserves of 204 Bcfe. In addition, the
properties represent 10% of RAM’s field operating cash flow
(defined as revenues less the combination of production expenses
and production taxes) during the second quarter ended June 30,
2010. Further, total daily production during the second quarter
ended June 30, 2010 for the combined properties was 5,635 thousand
cubic feet equivalents (Mcfe) composed of 2,549 Mcf of natural gas,
465 Bbl of natural gas liquids and 50 Bbl of oil. Given the
company’s outlook for the price of natural gas and its non-operated
position in a number of these properties, RAM was not planning to
focus a substantial portion of its capital expenditures in the
near-to-intermediate term on these assets.
Based on a review of various alternatives presented by
interested parties, RAM has determined that deleveraging the
company through targeted asset sales and refinancing the company’s
existing debt will provide the greatest benefit to current
shareholders. RAM will also be evaluating refinancing alternatives
with respect to its remaining outstanding debt while asset sales
are being completed. At September 30, 2010 the company had bank
debt outstanding of $246.7 million, composed principally of a
balance outstanding under its revolver of $133.5 million and a
balance outstanding under a term loan of $113.2 million.
On June 15, 2010 the company issued a press release announcing
that the Board of Directors of RAM had authorized management to
investigate a broad range of strategic alternatives available to
the company, all with a view to enhance shareholder value. The
company engaged Jefferies & Company, Inc. as its exclusive
financial advisor to assist in this strategic review process.
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
the company’s pursuit of strategic alternatives, including the
ability to complete any asset sales, the anticipated use of
proceeds from asset sales to reduce debt, any effort to refinance
existing outstanding debt, the current expectation that such
actions can be accomplished without requiring the issuance of
additional equity capital and the objective outcome of the
strategic review process, as well as 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, issues arising from the transaction due
diligence process, closing adjustments, 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 Resources
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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