RAME Ram Energy Resources, Inc. (MM)

RAM Energy Resources, Inc. (Nasdaq:RAME) today announced second quarter 2008 production, earnings and financial highlights. Second quarter production totaled 644 thousand barrel equivalents (BOE), up 91 % from 337 thousand BOE in the second quarter 2007, driven primarily by production from �developing fields� of 189 thousand BOE and production from �mature oil fields� of 290 thousand BOE. These areas produced 24 thousand BOE and 158 thousand BOE, respectively, in the prior year�s quarter. While year to year comparisons are influenced considerably by our acquisition of Ascent Energy in November 2007, second quarter production also rose 5 % sequentially above the 612 thousand BOE produced in the first quarter of 2008, driven primarily by our drilling activity in South Texas, which increased production to 161 thousand BOE in the second quarter vs. 131 thousand BOE in the first quarter 2008. Total sales of oil, natural gas liquids (NGLs) and natural gas totaled $57.6 million, 222 % above similar hydrocarbon sales in the second quarter of last year. Free cash flow (a non-GAAP measure) was $24.8 million, or $0.36 per share, for the second quarter 2008 compared to $7.1 million, or $0.18 per share, in last year�s second quarter. Free cash flow of $24.8 million fully funded the second quarter capital expenditure program of $24.2 million. Similarly, EBITDA (a non-GAAP measure) grew to a record level of $32.0 million for the second quarter, representing an increase of 223 % from the same period last year. For the second quarter 2008, RAM�s adjusted net income to common shareholders was $14.8 million, or $0.21 per common share. The calculation of adjusted net income to common shareholders excludes the after tax impact of unrealized non-cash mark-to-market (MTM) losses associated with oil and natural gas derivatives covering future periods. Such MTM losses are typically not included in the published estimates of the company�s financial results made by certain securities analysts. During the second quarter an unrealized non-cash pre-tax MTM loss of $33.8 million attributable to future period oil and natural gas derivatives was incurred primarily as a result of an increase in oil and natural gas prices at June 30, 2008 compared to prevailing prices at March 31, 2008. Including the MTM losses noted above and realized losses associated with contract settlements and premium costs of derivatives during the second quarter 2008, RAM reported a net loss to common shareholders during the second quarter 2008 of $5.9 million, or a loss of $0.08 per common share. Recent extreme volatility in oil and natural gas prices has created wide swings in the MTM value of RAM�s derivatives. As an example, from June 30, 2008 to July 31, 2008 the MTM value of the company�s derivatives moved in the company�s favor by approximately $18.9 million. �We are pleased with the results the company has experienced from our drilling activities during the first half of 2008 and remain focused on growing both our production and reserves,� said Larry Lee, Chairman and CEO. �RAM continues to execute on our balanced strategy of acquisitions, exploitation and exploration,� added Mr. Lee. Commodity Prices and Revenues The company�s realized price for oil rose 97 % to an average of $123.15 per barrel in the second quarter of 2008, compared with last year�s second quarter average realized price of $62.54 per barrel. Similarly, the company�s realized price for natural gas rose 48 % to an average of $9.94 per thousand cubic feet (Mcf) compared to an average of $6.70 per Mcf in the second quarter of 2007. In addition, the price of NGLs increased 36 %, averaging $60.58 per barrel for this year�s second quarter. The positive impact arising from the substantial increase in the price of all our commodities, however, was somewhat offset by the cost of derivatives. At June 30, 2008 the company had derivative contracts in place covering 3,790 BOE per day for the next 21 months. The company does not formally designate its derivative contracts as hedges, nor are its derivative contracts associated with its production; therefore realized prices are not strictly associated with derivative gains or losses. In the second quarter 2008 the realized prices of oil and natural gas rose 28 % and 32 %, respectively, over those in the first quarter of the year. The substantial rise in commodity prices resulted in realized derivative losses of $7.2 million and unrealized MTM derivative losses of $33.8 million for the second quarter. These losses offset a substantial portion of oil and gas revenue of $57.6 million, reducing total revenues to $16.6 million for the quarter. In the year-ago quarter, the realized prices of oil and natural gas rose a more modest 11 % and 8 %, respectively. The resulting impact to realized and unrealized losses was a nominal $0.2 million, and, as a result, total revenues for the second quarter 2007 were $17.8 million. Costs and Expenses Production expenses were $14.69 per BOE in the second quarter of 2008, or a total of $9.5 million, similar to the $13.89 per BOE in the previous year�s quarter. It is noteworthy that production expense as a percentage of oil and gas sales declined substantially to 16 % in the most recent quarter compared to 26 % in the similar period last year. Production taxes were $5.19 per BOE in this year�s second quarter, or a total of $3.3 million, 71 % above the $3.04 per BOE posted in the 2007 quarter. The increase is principally the result of higher commodity prices compared to those prevailing in the second quarter of 2007. General and administrative expenses of $5.5 million rose 115 % above those expenses in last year�s second quarter of $ 2.6 million as a result of higher salary expense, an increased number of employees and the accrual of certain recurring expenses. As in the case of production expense, general and administrative expenses as a percentage of oil and gas sales declined to 10 % in the second quarter 2008 from the year-ago level of 14 %. Capital Expenditures Capital expenditures totaled $24.2 million in the second quarter 2008; $16.0 million was allocated to lower risk development activities, $7.6 million to exploratory activities and $0.6 million for the acquisition of leases. The non-acquisition capital budget for the 2008 year remains at $80.0 million. During the second quarter RAM participated in the drilling of 25 gross (21.8 net) wells, of which 12 were completed as producing wells, and 13 were in various stages of completion at June 30. Long-Term Debt Our capital base and common stock float was enhanced by the exercise of 96 % of the company�s outstanding warrants in May 2008. The $86.6 million of new capital received from the exercise was applied to debt reduction, lowering our net debt to total capital ratio to 57 % at June 30, 2008 from 77 % at December 31, 2007. As of June 30, 2008, RAM�s outstanding long-term debt was $ 255.1 million, compared to $335.7 million at December 31, 2007. The current cost of borrowed funds is 6.8 % which is a 390 basis point decrease from the cost at December 31, 2007. In addition, 17.6 million new shares of common stock were added as a result of the exercise, improving the float and raising total shares outstanding to 78.6 million. Six Month 2008 Results Six month production totaled 1.3 million BOE, up 93 % from 650 thousand BOE in 2007, driven primarily by production from �developing fields� of 356 thousand BOE and production from �mature oil fields� of 569 thousand BOE. These areas produced 39 thousand BOE and 416 thousand BOE, respectively, in the prior year�s similar period. The increase in production in the first half of the year, combined with higher prices for commodities, drove total sales of oil, NGLs and natural gas to $101.1 million, 206 % above sales in the same period of 2007. Free cash flow per share (a non-GAAP measure) for the first half of 2008 was $39.3 million, or $0.61 per share compared to $10.4 million, or $0.27 per share, for the same period last year. Free cash flow of $39.3 million more than funded capital expenditures of $37.4 million made during the first six months of the year. Similarly, EBITDA (a non-GAAP measure) was $56.0 million for the first half of 2008 compared to $17.7 million for the same period last year, an increase of 216%. Update to Activity in West Virginia Devonian Shale Play RAM is underway with the drilling of the initial six wells of the 14 horizontal wells planned for 2008 on its West Virginia acreage. Each of the planned wells requires approximately 15 days to drill and targets the Huron Shale at a depth of approximately 6,400 feet, which includes a lateral section of approximately 2,500 feet. Three initial wells in the planned series, the C.S. Ball 1-H, R. Mays 1-H and the M. Jordan 1-H have all been drilled and are in various stages of completing or testing. A fourth well, the J.D. & B. Sturgeon 1-H, is currently drilling. The next two wells in the planned sequence have been permitted and are targeted to spud in late August and early September, respectively. In these initial wells, RAM is experimenting with several frac products and techniques in an effort to support the ultimate commercialization of the company�s Huron Shale play. Second Half 2008 Targets Management anticipates production gains of 2 % - 3 % sequentially during the remaining two quarters before the impact of a divestiture program currently underway. Management is actively pursuing the sale of certain non-core reserves and associated production in selected mature fields. Although the timing associated with the transactions is uncertain, management expects that proceeds from these property sales could aggregate to approximately $10 - $20 million. At the current time, uses of the potential proceeds include additional debt reduction, an increase in capital expenditures or other general corporate purposes. Production expenses are expected to continue at levels during the second half of the year similar to those incurred in the first half of 2008. Our blended cost of funded debt of 6.8 % should allow interest expense to decrease to approximately $1.6 million per month beginning in the third quarter. Additionally the company�s effective tax rate should continue to average approximately 39 %. Based on an assumed BOE price equal to that realized during the first half of 2008, free cash flow is expected to continue to allow internally generated funds to support all of the $42.6 million of non-acquisition capital spending planned under our existing $80.0 million capital budget for the year, while at the same time also allowing for the continued reduction of outstanding debt. RAM to Webcast Second Quarter 2008 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 Wednesday, August 6 at 3:00 p.m. Central 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 click on the microphone icon. The teleconference may be accessed by dialing 866-713-8564 (domestic) or 617-597-5312 (international) and providing the call identifier �14761781� to the operator. The webcast and the accompanying slide presentation will be available for replay on the company�s website. An audio replay will be available until August 13, 2008 by dialing 888-286-8010 (domestic) or 617-801-6888 (international) and using pass code �21199569.� 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 targets for production, costs, property dispositions, tax rate, EBITDA, free cash flow, estimates of capital spending, realized prices of oil and gas, the impact of oil and gas derivatives, drilling activities, 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. 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 RAME. For additional information, visit the company website at www.ramenergy.com. RAM Energy Resources, Inc. Condensed Consolidated Balance Sheets (in thousands, except share and per share amounts) � June 30, December 31, 2008 2007 ASSETS (unaudited) CURRENT ASSETS: Cash and cash equivalents $ 16,999 $ 6,873 Accounts receivable: Oil and natural gas sales, net of allowance of $21 ($287 at December 31, 2007) 24,074 15,136 Joint interest operations, net of allowance of $496 ($428 at December 31, 2007) 1,232 687 Income taxes 13 58 Other, net of allowance of $33 ($26 at December 31, 2007) 740 2,180 Prepaid expenses 2,065 1,928 Deferred tax asset 15,595 3,786 Other current assets � 1,107 � � 842 � Total current assets 61,825 31,490 PROPERTIES AND EQUIPMENT, AT COST: Oil and natural gas properties and equipment, using full cost accounting 612,182 573,470 Unevaluated oil and natural gas properties 24,639 26,895 Other property and equipment � 8,724 � � 8,787 � 645,545 609,152 Less accumulated depreciation and amortization � (89,351 ) � (67,529 ) Total properties and equipment 556,194 541,623 OTHER ASSETS: Deferred loan costs, net of accumulated amortization of $687 ($4,540 at December 31, 2007) 4,566 5,135 Other � 2,088 � � 1,994 � Total assets $ 624,673 � $ 580,242 � � LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable: Trade $ 17,038 $ 11,121 Oil and natural gas proceeds due others 11,276 7,800 Related party 34 31 Other 2,875 1,371 Accrued liabilities: Compensation 3,293 3,807 Interest 1,174 3,794 Franchise taxes 1,251 1,286 Income taxes 312 203 Other - 75 Derivative liabilities 33,726 5,302 Asset retirement obligations 1,643 1,904 Long-term debt due within one year � 463 � � 29,231 � Total current liabilities 73,085 65,925 � OIL & NATURAL GAS PROCEEDS DUE OTHERS 2,475 2,383 DERIVATIVE LIABILITIES 13,447 3,073 LONG-TERM DEBT 254,589 306,516 DEFERRED INCOME TAXES 74,071 71,051 ASSET RETIREMENT OBLIGATIONS 26,670 25,741 UNCERTAIN TAX POSITIONS - 6,855 COMMITMENTS AND CONTINGENCIES � STOCKHOLDERS' EQUITY: Common stock, $0.0001 par value, 100,000,000 and 100,000,000 shares authorized, 79,495,667 and 60,842,836, shares issued, 78,609,519 and 59,971,945 shares outstanding at June 30, 2008 and December 31, 2007, respectively 8 6 Additional paid-in capital 219,716 131,625 Treasury stock - 904,923 shares (889,666 shares at December 31,2007) at cost (4,015 ) (3,945 ) Accumulated deficit � (35,373 ) � (28,988 ) Stockholders' equity � 180,336 � � 98,698 � Total liabilities and stockholders' equity $ 624,673 � $ 580,242 � RAM Energy Resources, Inc. Condensed Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited) � Three months ended Six months ended June 30, June 30, � 2008 � � � 2007 � � 2008 � � � 2007 � � REVENUES AND OTHER OPERATING INCOME: Oil sales $ 36,984 11,658 $ 65,644 21,880 Natural gas sales 15,349 4,579 26,227 8,189 Natural gas liquids sales 5,221 1,646 9,216 2,958 Realized losses on derivatives (7,218 ) (105 ) (9,536 ) (135 ) Unrealized losses on derivatives (33,808 ) (102 ) (39,067 ) (1,156 ) Other � 117 � � 99 � � 211 � � 302 � Total revenues and other operating income � 16,645 � � 17,775 � � 52,695 � � 32,038 � � OPERATING EXPENSES: Oil and natural gas production taxes 3,341 1,026 5,770 1,850 Oil and natural gas production expenses 9,458 4,683 18,780 9,210 Depreciation and amortization 11,179 4,129 21,802 7,554 Accretion expense 540 144 1,078 290 Share-based compensation 932 221 1,479 394 General and administrative, overhead and other expenses, net of operator's overhead fees 5,539 2,578 11,056 4,924 Total operating expenses � 30,989 � � 12,781 � � 59,965 � � 24,222 � Operating income (loss) � (14,344 ) � 4,994 � � (7,270 ) � 7,816 � � OTHER INCOME (EXPENSE): Interest expense (6,197 ) (3,990 ) (14,359 ) (7,828 ) Interest income 75 313 148 520 Other expense � (205 ) � - � � (354 ) � - � INCOME (LOSS) BEFORE INCOME TAXES � (20,671 ) � 1,317 � � (21,835 ) � 508 � � INCOME TAX PROVISION (BENEFIT) � (14,809 ) � 415 � � (15,450 ) � 186 � � NET INCOME (LOSS) $ (5,862 ) $ 902 � $ (6,385 ) $ 322 � � EARNINGS (LOSS) PER SHARE: Basic $ (0.08 ) $ 0.02 $ (0.10 ) $ 0.01 Diluted $ (0.08 ) $ 0.02 $ (0.10 ) $ 0.01 � WEIGHTED AVERAGE SHARES OUTSTANDING: Basic 69,198,767 40,292,725 64,190,725 38,759,576 Diluted 69,198,767 40,384,374 64,190,725 38,850,432 RAM Energy Resources, Inc. Condensed Consolidated Statement of Cash Flows (in thousands) (unaudited) � � Six months ended June 30, � 2008 � � � 2007 � OPERATING ACTIVITIES: � Net income (loss) $ (6,385 ) $ 322 Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 21,802 7,554 Amortization of deferred loan costs and Senior Notes discount 602 413 Accretion expense 1,078 290 Unrealized loss on derivatives 39,067 1,156 Deferred income taxes (15,490 ) (66 ) Share-based compensation 1,479 394 Loss on disposal of other property, equipment and subsidiary 174 - Undistributed losses on investment 174 - Changes in operating assets and liabilities, net of acquisitions Accounts receivable (8,366 ) 101 Prepaid expenses and other current assets (405 ) 166 Accounts payable and oil and gas proceeds due others 11,250 (2,283 ) Accrued liabilities and other (2,843 ) (697 ) Income taxes payable (237 ) 146 Asset retirement obligations � (309 ) � - � Total adjustments � 47,976 � � 7,174 � Net cash provided by operating activities 41,591 7,496 � INVESTING ACTIVITIES: Payments for oil and natural gas properties and equipment (37,434 ) (28,515 ) Proceeds from sales of oil and natural gas properties and equipment 295 50 Payments for other property and equipment (504 ) (109 ) Proceeds from sales of other property and equipment 19 - Proceeds from sale of subsidiary, net of cash 308 - Payments of merger costs � 35 � � - � Net cash used in investing activities (37,281 ) (28,574 ) � FINANCING ACTIVITIES: Payments on long-term debt (134,924 ) (546 ) Proceeds from borrowings on long-term debt 54,226 16,056 Payments for deferred loan costs (30 ) - Common stock repurchased (70 ) - Common stock offering, net of direct costs - 27,366 Warrants exercised � 86,614 � � - � Net cash provided by financing activities � 5,816 � � 42,876 � � INCREASE IN CASH AND CASH EQUIVALENTS 10,126 21,798 CASH AND CASH EQUIVALENTS, beginning of period � 6,873 � � 6,721 � CASH AND CASH EQUIVALENTS, end of period $ 16,999 � $ 28,519 � RAM Energy Resources, Inc. Condensed Consolidated Statements of Cash Flows, continued (in thousands) (unaudited) � � Six months ended June 30, 2008 � 2007 SUPPLEMENTAL CASH FLOW INFORMATION: � Cash paid for interest $ 16,335 $ 7,300 Cash paid for income taxes $ 277 $ 5 � DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES: Establishment of asset retirement obligations $ 224 $ - Amount removed from asset retirement obligations for sold or retired wells $ 292 $ - RAM Energy Resources, Inc. EBITDA, Free Cash Flow and Adjusted Net Income ( non-GAAP measures) (unaudited) � Non-GAAP Financial Measures EBITDA, a non-GAAP measure, represents cash provided by operating activities before the impact of interest expense, income taxes, DD&A, accretion, share based compensation and unrealized gains or losses on derivative transactions.��Free cash flow is also a non-GAAP measure representing EBITDA after adjustments for the cash portion of interest and income taxes.��Adjusted net income is a non-GAAP measure which excludes the income tax affected impact of unrealized derivative gains or losses on GAAP income. 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 which is 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. � � � � RAM Energy Resources, Inc. Free Cash Flow $000s, except per share amounts Qtr Ended Qtr Ended YTD YTD 6/30/2008 6/30/2007 6/30/2008 6/30/2007 EBITDA: Net income (loss) $ (5,862 ) $ 902 $ (6,385 ) $ 322 Plus: Interest expense $ 6,197 $ 3,990 $ 14,359 $ 7,828 Plus: Amortization and depreciation & accretion $ 11,719 $ 4,273 $ 22,880 $ 7,844 Plus: Share-based compensation $ 932 $ 221 $ 1,479 $ 394 Plus: Income tax provision (benefit) $ (14,809 ) $ 415 $ (15,450 ) $ 186 Less: Unrealized loss on derivatives $ 33,808 $ 102 $ 39,067 $ 1,156 � � � � � EBITDA $ 31,985 $ 9,903 $ 55,950 $ 17,730 � Less: � Cash paid for interest $ 6,869 $ 2,813 $ 16,335 $ 7,300 Cash paid for income tax $ 277 $ 5 $ 277 $ 5 � � � � � Free Cash Flow $ 24,839 � $ 7,085 $ 39,338 � $ 10,425 � Weighted average shares outstanding - basic 69,199 40,293 64,191 38,760 Weighted average shares outstanding - diluted 69,199 40,384 64,191 38,850 � Cash Flow per Share - basic $ 0.36 $ 0.18 $ 0.61 $ 0.27 Cash Flow per Share - diluted $ 0.36 $ 0.18 $ 0.61 $ 0.27 � � Adjusted net income (loss): Net income (loss) $ (5,862 ) $ 902 $ (6,385 ) $ 322 � Plus: Tax effected unrealized (gain)loss on derivatives � 20,623 � � 69 � 24,222 � $ 728 � Adjusted net income (loss) $ 14,761 � $ 971 $ 17,837 � $ 1,050 � Weighted average shares outstanding - basic 69,199 40,293 64,191 38,760 Weighted average shares outstanding - diluted 69,199 40,384 64,191 38,850 � Earnings per Share - basic $ 0.21 $ 0.02 $ 0.28 $ 0.03 Earnings per Share - diluted $ 0.21 $ 0.02 $ 0.28 $ 0.03 RAM Energy Resources, Inc. Production By Areas Three Months Ended June 30, 2008 � � � � � � Developing Fields Mature Oil Fields (a) Mature NaturalGas Fields � � � � � Three Months Ended June 30, 2008 South Texas BarnettShale Appalachia Total Aggregate Net Production Bbls Oil 11,361 544 - 237,265 51,142 300,312 Bbls NGLs 31,912 13,700 - 21,932 18,646 86,190 MCF 704,424 77,550 5,294 186,444 570,197 1,543,909 BOE 160,677 27,169 882 290,271 164,821 643,820 � Three Months Ended June 30, 2007 Aggregate Net Production Bbls Oil - 1,649 - 144,761 39,983 186,393 Bbls NGLs - 1,671 - 12,740 22,469 36,880 MCF - 121,890 - - 561,905 683,795 BOE - 23,635 - 157,501 156,103 337,239 � Change in BOE 160,677 3,534 882 132,770 8,718 306,581 Percentage Change in BOE 100.0% 15.0% 100.0% 84.3% 5.6% 90.9% � (a)�Includes Electra/Burkburnett, Allen/Fitts and Layton fields. RAM Energy Resources, Inc. Production By Areas Six Months Ended June 30, 2008 � � � � � � Developing Fields MatureOil Fields (a) MatureNaturalGas Fields � Six Months Ended June 30, 2008 South Texas BarnettShale Appalachia Total Aggregate Net Production Bbls Oil 21,493 1,792 - 470,231 104,780 598,296 Bbls NGLs 52,447 30,774 - 39,612 36,989 159,822 MCF 1,308,424 176,550 9,874 353,130 1,137,760 2,985,738 BOE 292,011 61,991 1,646 568,698 331,396 1,255,742 � Six Months Ended June 30, 2007 Aggregate Net Production Bbls Oil - 2,101 - 364,836 796 367,733 Bbls NGLs - 2,547 - 31,143 37,769 71,459 MCF - 203,883 - 118,726 942,795 1,265,404 BOE - 38,628 - 415,767 195,697 650,092 � Change in BOE 292,011 23,363 1,646 152,931 135,699 605,650 Percentage Change in BOE 100.0% 60.5% 100.0% 36.8% 69.3% 93.2% � (a) Includes Electra/Burkburnett, Allen/Fitts and Layton fields. RAM Energy Resources, Inc. Net Production, Unit Prices and Costs � Three Months Ended Six Months Ended 30-Jun-08 30-Jun-08 Production volumes: Oil (MBbls) 300 598 NGL (MBbls) 86 160 Natural gas (MMcf) 1,544 2,986 Total (Mboe) 644 1,256 � � Average sale prices received: Oil (per Bbl) $123.15 $109.72 NGL (per Bbl) $60.58 $57.66 Natural gas (per Mcf) $9.94 $8.78 Total per Boe $89.39 $80.50 � Cash effect of derivative contracts: Oil (per Bbl) ($19.39) ($13.61) NGL (per Bbl) $0.00 $0.00 Natural gas (per Mcf) ($0.90) ($0.47) Total per Boe ($11.21) ($7.59) � Average prices computed after cash effect of settlement of derivative contracts: Oil (per Bbl) $103.76 $96.11 NGL (per Bbl) $60.58 $57.66 Natural gas (per Mcf) $9.04 $8.31 Total per Boe $78.18 $72.91 � Cash expenses (per Boe): Oil and natural gas production taxes $5.19 $4.59 Oil and natural gas production expenses $14.69 $14.96 General and administrative $8.60 $8.80 Net cash interest expense $9.05 $10.84 Total per Boe $37.53 $39.19 � Cash flow per Boe $40.65 $33.72