RAM Energy Resources Reports Year-End 2006 Proved Reserves of 18.5 Million BOE
03 April 2007 - 3:25AM
Business Wire
RAM Energy Resources, Inc. (Nasdaq:RAME) announced today that
estimates of its proved oil and gas reserves at December 31, 2006
totaled 18.5 million BOE. The total reflects 2006 production of 1.3
million BOE with total net additions and revisions to reserves of
946 MBOE. Year-end 2006 reserves are 98 percent of reserves at
year-end 2005. Year-end 2006 estimated proved reserves of 18.5
million BOE were composed of 10.8 million barrels of oil, 2.1
million barrels of natural gas liquids and 33.2 Bcf of natural gas.
Crude oil and natural gas liquids represent 70 percent of total
proved reserves and natural gas reserves represent the remaining 30
percent of total proved reserves. Of the total proved reserves, a
substantial 71 percent were classified as proved developed
reserves. Based on 2006 year-end prices of $58.74 per barrel for
oil, $36.51 per Bbl for natural gas liquids and $5.51 per MMBtu for
natural gas, the present value of estimated future net revenues,
before income taxes, discounted at 10 percent (PV-10), attributable
to the estimate of total proved reserves was approximately $270
million at year-end 2006. This compares to a PV-10 of $345 million
at year-end 2005, calculated using year-end 2005 prices of $58.63
per barrel for oil, $35.89 per barrel for natural gas liquids and
$9.14 per MMBtu for gas. The decrease in PV-10 value at year-end
2006 compared to that of the prior year is primarily attributable
to declines of 40 percent and 2 percent in the price of natural gas
and natural gas liquids, respectively, used to calculate present
value at year-end 2006. The price of natural gas in particular was
substantially lower at year-end 2006 than at year-end 2005 and
exerted a significant impact on the PV-10 value. The PV-10 value of
year-end 2006 reserve volumes calculated using prices in effect at
March 30, 2007 is in excess of $330 million. The standardized
measure of discounted future net cash flows, used for financial
reporting purposes, which deducts discounted future income taxes
from the PV-10, was $179.7 million at December 31, 2006, compared
with $226.7 million at year-end 2005. During 2006, the company made
total oil and gas capital expenditures of $28.1 million, of which
$16.8 million or 60 percent was spent to convert proved undeveloped
reserves to proved producing. The company focused on an allocation
of spending, particularly in its principal Electra/Burkburnett and
Boonsville fields, designed to maintain or grow production volumes
from internally generated sources while laying the groundwork to
accelerate development in the Barnett Shale and initiate
exploration activities on its Wolfamp shale play in West Texas. In
addition, $2.8 million was spent on completed exploration wells,
$4.5 million was spent on the acquisition of 447 MBOE of reserves
and approximately $4.0 million on the acquisition of unproved
properties, exploration in progress and recompletions. Total
reserve additions of 946 MBOE replaced 73 percent of production at
a cost of $27.18 per BOE. The average finding cost for the
three-year period ended 2006 is $8.15 per BOE. RAM continues to
employ, as it has in the past, independent petroleum engineering
firms to prepare estimates of its proved reserves in all its
operating areas. RAM to Webcast Fourth-Quarter and Year-end 2006
Conference Call The company�s teleconference call to review fourth
quarter and year-end 2006 results will be broadcast live on a
listen-only basis over the Internet on Tuesday, April 3, 2007, at 3
p.m. Central Time. Interested parties may access the webcast by
visiting the RAM website at www.ramenergy.com and selecting the
microphone icon. The teleconference may be accessed by dialing
1(888)396-2356 and providing the call identifier �66484342� to the
operator. The webcast and the accompanying slide presentation will
be available for replay at the company�s website. An audio replay
will be available until April 10, 2007, by dialing 1(888)286-8010.
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 reserves, PV-10, standardized measure, future
production, exploitation activities, operating costs, capital
spending, cash flow, realized prices of oil and gas, the impact of
oil and gas derivative financial instruments, 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, 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, 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 RAM Energy Resources, Inc.
Preliminary Estimates of Changes in Proved Oil and Gas Reserves
(Unaudited) � Oil and Natural Gas Liquids (MBbls) - � Proved
reserves at December 31, 2005 13,090� � Revisions of previous
estimates (1,491) Extensions, discoveries and other additions
2,089� Production (895) Purchases of reserves-in-place 126� Sales
of reserves-in-place -� � Proved reserves at December 31, 2006
12,919� � Gas (MMcf) - � Proved reserves at December 31, 2005
34,234� � Revisions of previous estimates (3,220) Extensions,
discoveries and other additions 2,622� Production (2,365) Purchases
of reserves-in-place 1,928� Sales of reserves-in-place -� � Proved
reserves at December 31, 2006 33,199� � MMBOE - � Proved reserves
at December 31, 2005 18,796� � Revisions of previous estimates
(2,028) Extensions, discoveries and other additions 2,526�
Production (1,289) Purchases of reserves-in-place 447� Sales of
reserves-in-place -� � Proved reserves at December 31, 2006 18,452�
Proved developed reserves at December 31, 2006 13,106� � PV-10 at
December 31, 2006 $269.9� Million � Standardized Measure at
December 31, 2006 $179.7� Million
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