- Current report filing (8-K)
01 Dezember 2009 - 10:27PM
Edgar (US Regulatory)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): November 24, 2009
RAM ENERGY RESOURCES, INC.
(Exact Name of Registrant as Specified in Charter)
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Delaware
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000-50682
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20-0700684
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(State or Other Jurisdiction
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(Commission
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(IRS Employer
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of Incorporation)
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File Number)
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Identification No.)
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5100 E. Skelly Drive,
Suite 650, Tulsa, Oklahoma
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74135
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(Address of Principal Executive Offices)
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(Zip Code)
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Registrants telephone number, including area code: (
918) 663-2800
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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Item 4.02(a). Non-Reliance on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review.
On November 24, 2009, the Audit Committee of the Board of Directors of RAM Energy Resources,
Inc. (RAM or the Company) concluded that the Company would restate its financial statements as of
and for (i) the fiscal year ended December 31, 2008, (ii) the three months ended March 31, 2009,
(iii) the three and six months ended June 30, 2009, and (iv) the three and nine months ended
September 30, 2009, after identifying certain non-cash errors in such financial statements caused
by the fact that (a) the estimate of the Companys proved oil and natural gas reserves
for the year ended December 31, 2008 prepared by the Companys independent petroleum engineering
firms overstated the net proved reserves by approximately 1.4 million barrels of oil equivalent
(MMBoe), and (b) the Companys internal estimate of its proved oil and natural gas reserves for the
three months ended March 31, 2009 overstated the net proved reserves by approximately 2.7 MMBoe,
with the error in both such reports occurring as the result of the inclusion of certain proved
undeveloped properties that were uneconomic based on applicable capital costs and field prices at
the end of each period. Due to the error, the future net revenues from the Companys proved oil
and natural gas properties discounted at 10%, or PV-10 Value, was understated
by $10.7 million at December 31, 2008 and also was
understated at March 31, 2009. Because the Company was required to record an impairment charge to its full cost
pool at both December 31, 2008 and March 31, 2009 due to the ceiling test limitation, the inclusion
of uneconomic properties in the reserve reports resulted in a number of non-cash errors in the
Companys financial statements issued as of such dates, including an overstatement of the
applicable impairment charge, depreciation and amortization expense and income tax benefit. The
error also resulted in an overstatement of the net loss and loss per
share recorded for each period. The errors in the Companys
reserve reports were limited to the reserve reports prepared for the
periods ended December 31, 2008 and March 31, 2009. The
error of inclusion of uneconomic properties did not carry forward
into the reserve report for the period ended June 30, 2009. However, because of
the incorrect impairment charges recorded at year end and at March 31, 2009, the carrying value of the Companys oil and gas properties had been reduced to a
greater extent than if the error had not occurred, resulting in the understatement of depreciation
and amortization expense and an overstatement of income tax benefit in the second quarter financial
statement period, with a corresponding understatement of the net loss
recorded for the second quarter of 2009. Effects of the error on the
third quarter of 2009 included an understatement of depreciation and
amortization expense, an understatement of
income tax benefit, and a corresponding understatement of net loss. There was no
effect on net cash flows for any affected period.
Upon detecting the reserve report error, the Company analyzed the effect of the resulting
errors in the previously issued financial statements and the prospective effect on future financial
statements and discussed the matter with its independent public accounting firm. A determination
was made by the Company, with which its independent public accounting
firm concurred, that the
resulting errors in the financial statements were not material and that a restatement of the
financial statements should not be required. However, after an extended period of discussion with
the staff of the Securities and Exchange Commission concerning both the quantitative and
qualitative effects of the errors on the Companys financial statements, both retroactively and
prospectively, the Audit Committee of the Board of Directors of the Company determined that it
would be in the best interests of the Company and its stockholders to restate the subject financial
statements.
Accordingly, the Company plans to file an amended annual report on Form 10-K/A for the fiscal
year ended December 31, 2008, and amended quarterly reports on Form 10-Q/A for
2
each of
the fiscal quarters ended March 31, June 30 and September 30, 2009, with each such amended report
containing a restatement of the consolidated financial statements of the Company for the period
indicated. The amended annual report on Form 10-K/A will also include corrected year-end reserve
information. The amended reports and the restated financial statements included therein have been
discussed with and, in the case of the restated financial statements for the fiscal year ended
December 31, 2008, audited by, the Companys independent public accounting firm.
The following tables show the effects of the errors in the originally filed financial
statements for each of the subject periods and the adjustments incorporated in the restated
financial statements for each such period.
For the fiscal year ended December 31, 2008:
Consolidated Balance Sheet line item (in thousands):
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As of December 31, 2008
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Previously
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Reported
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Adjustments
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As Restated
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Accumulated depreciation, amortization and impairment
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$
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(396,301
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)
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$
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12,825
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$
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(383,476
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)
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Total properties and equipment
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$
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296,500
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$
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12,825
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$
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309,325
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Deferred tax asset
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$
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28,724
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$
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(4,706
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)
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$
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24,018
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Total assets
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$
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395,845
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$
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8,119
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$
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403,964
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Accumulated deficit
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$
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(167,060
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)
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$
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8,119
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$
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(158,941
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)
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Stockholders equity
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$
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49,721
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$
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8,119
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$
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57,840
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Total liabilities and stockholders equity
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$
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395,845
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$
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8,119
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$
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403,964
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Consolidated Statement of Operations line item (in thousands except per share amounts):
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For the year ended December 31, 2008
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Previously
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Reported
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Adjustments
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As Restated
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Depreciation and amortization
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$
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46,758
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$
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(246
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)
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$
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46,512
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Impairment
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$
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282,465
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$
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(12,579
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)
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$
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269,886
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Total operating expenses
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$
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402,808
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$
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(12,825
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)
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$
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389,983
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Operating income (loss)
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$
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(196,951
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)
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$
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12,825
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$
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(184,126
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)
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Income (loss) before income taxes
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$
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(234,461
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)
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$
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12,825
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$
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(221,636
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)
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Income tax provision (benefit)
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$
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(96,389
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)
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$
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4,706
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$
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(91,683
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)
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Net income (loss)
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$
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(138,072
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)
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$
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8,119
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$
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(129,953
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)
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Basic earnings (loss) per share
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$
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(1.95
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$
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0.11
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$
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(1.84
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)
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Diluted earnings (loss) per share
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$
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(1.95
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$
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0.11
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$
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(1.84
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)
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Consolidated Statement of Cash Flows line item (in thousands):
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For the year ended December 31, 2008
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Previously
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Reported
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Adjustments
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As Restated
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Net income (loss)
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$
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(138,072
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)
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$
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8,119
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$
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(129,953
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)
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Depreciation and amortization
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$
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46,758
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$
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(246
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)
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$
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46,512
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Impairment
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$
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282,465
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$
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(12,579
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)
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$
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269,886
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Deferred income tax benefit
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$
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(97,024
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)
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$
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4,706
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$
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(92,318
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)
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3
For the fiscal quarter ended March 31, 2009:
Consolidated Balance Sheet line item (in thousands):
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As
of March 31, 2008
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Previously
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Reported
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Adjustments
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As Restated
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Accumulated depreciation, amortization and impairment
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$
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(464,153
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)
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$
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24,803
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$
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(439,350
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)
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Total properties and equipment
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$
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242,796
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$
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24,803
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$
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267,599
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Deferred tax asset
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$
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52,752
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$
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(7,949
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)
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$
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44,803
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Total assets
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$
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363,218
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$
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16,854
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$
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380,072
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Accumulated deficit
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$
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(205,153
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)
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$
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16,854
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$
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(188,299
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)
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Stockholders equity
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$
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12,164
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$
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16,854
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$
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29,018
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Total liabilities and stockholders equity
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$
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363,218
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$
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16,854
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$
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380,072
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Consolidated Statement of Operations
line item (in thousands except per share amounts):
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For the three months ended March 31, 2009
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Previously
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|
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Reported
|
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Adjustments
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As Restated
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Depreciation and amortization
|
|
$
|
8,944
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$
|
(662
|
)
|
|
$
|
8,282
|
|
Impairment
|
|
$
|
58,929
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|
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$
|
(11,316
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)
|
|
$
|
47,613
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Total operating expenses
|
|
$
|
84,120
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$
|
(11,978
|
)
|
|
$
|
72,142
|
|
Operating income (loss)
|
|
$
|
(58,108
|
)
|
|
$
|
11,978
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|
|
$
|
(46,130
|
)
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Income (loss) before income taxes
|
|
$
|
(62,129
|
)
|
|
$
|
11,978
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|
|
$
|
(50,151
|
)
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Income tax provision (benefit)
|
|
$
|
(24,036
|
)
|
|
$
|
3,243
|
|
|
$
|
(20,793
|
)
|
Net income (loss)
|
|
$
|
(38,093
|
)
|
|
$
|
8,735
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|
|
$
|
(29,358
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)
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Basic earnings (loss) per share
|
|
$
|
(0.49
|
)
|
|
$
|
0.11
|
|
|
$
|
(0.38
|
)
|
Diluted earnings (loss) per share
|
|
$
|
(0.49
|
)
|
|
$
|
0.11
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|
|
$
|
(0.38
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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Cash Flows
line item (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
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For the three months ended March 31, 2009
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|
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Previously
|
|
|
|
|
|
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Reported
|
|
Adjustments
|
|
As Restated
|
Net income (loss)
|
|
$
|
(38,093
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)
|
|
$
|
8,735
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|
$
|
(29,358
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)
|
Depreciation and amortization
|
|
$
|
8,944
|
|
|
$
|
(662
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)
|
|
$
|
8,282
|
|
Impairment
|
|
$
|
58,929
|
|
|
$
|
(11,316
|
)
|
|
$
|
47,613
|
|
Deferred income tax benefit
|
|
$
|
(24,028
|
)
|
|
$
|
3,243
|
|
|
$
|
(20,785
|
)
|
4
For the fiscal quarter ended June 30, 2009:
Consolidated Balance Sheet line item (in thousands):
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
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As of June 30, 2009
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|
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Previously
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|
|
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|
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Reported
|
|
Adjustments
|
|
As Restated
|
Accumulated depreciation, amortization and impairment
|
|
$
|
(471,557
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)
|
|
$
|
24,177
|
|
|
$
|
(447,380
|
)
|
Total properties and equipment
|
|
$
|
239,420
|
|
|
$
|
24,177
|
|
|
$
|
263,597
|
|
Deferred tax asset
|
|
$
|
44,434
|
|
|
$
|
(8,802
|
)
|
|
$
|
35,632
|
|
Total assets
|
|
$
|
323,101
|
|
|
$
|
15,375
|
|
|
$
|
338,476
|
|
Accumulated deficit
|
|
$
|
(216,959
|
)
|
|
$
|
15,375
|
|
|
$
|
(201,584
|
)
|
Stockholders equity
|
|
$
|
(1,225
|
)
|
|
$
|
15,375
|
|
|
$
|
14,150
|
|
Total liabilities and stockholders equity
|
|
$
|
323,101
|
|
|
$
|
15,375
|
|
|
$
|
338,476
|
|
|
Consolidated Statement of Operations line item (in thousands except per share amounts):
|
|
|
|
For the three months ended
|
|
For the six months ended
|
|
|
June 30, 2009
|
|
June 30, 2009
|
|
|
Previously
|
|
|
|
|
|
As
|
|
Previously
|
|
|
|
As
|
|
|
Reported
|
|
Adjustments
|
|
Restated
|
|
Reported
|
|
Adjustments
|
|
Restated
|
Depreciation and amortization
|
|
$
|
7,560
|
|
|
$
|
626
|
|
|
$
|
8,186
|
|
|
$
|
16,504
|
|
|
$
|
(36
|
)
|
|
$
|
16,468
|
|
Impairment
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
58,929
|
|
|
$
|
(11,316
|
)
|
|
$
|
47,613
|
|
Total operating expenses
|
|
$
|
22,435
|
|
|
$
|
626
|
|
|
$
|
23,061
|
|
|
$
|
106,555
|
|
|
$
|
(11,352
|
)
|
|
$
|
95,203
|
|
Operating income (loss)
|
|
$
|
(12,016
|
)
|
|
$
|
(626
|
)
|
|
$
|
(12,642
|
)
|
|
$
|
(70,124
|
)
|
|
$
|
11,352
|
|
|
$
|
(58,772
|
)
|
Income (loss) before income taxes
|
|
$
|
(15,714
|
)
|
|
$
|
(626
|
)
|
|
$
|
(16,340
|
)
|
|
$
|
(77,843
|
)
|
|
$
|
11,352
|
|
|
$
|
(66,491
|
)
|
Income tax provision (benefit)
|
|
$
|
(3,908
|
)
|
|
$
|
853
|
|
|
$
|
(3,055
|
)
|
|
$
|
(27,944
|
)
|
|
$
|
4,096
|
|
|
$
|
(23,848
|
)
|
Net income (loss)
|
|
$
|
(11,806
|
)
|
|
$
|
(1,479
|
)
|
|
$
|
(13,285
|
)
|
|
$
|
(49,899
|
)
|
|
$
|
7,256
|
|
|
$
|
(42,643
|
)
|
Basic earnings (loss) per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.56
|
)
|
Diluted earnings (loss) per share
|
|
$
|
(0.16
|
)
|
|
$
|
(0.02
|
)
|
|
$
|
(0.18
|
)
|
|
$
|
(0.66
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.56
|
)
|
|
Consolidated Statement of Cash Flows line
item (in thousands):
|
|
|
|
For the six months ended June 30, 2009
|
|
|
Previously
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
As Restated
|
Net income (loss)
|
|
$
|
(49,899
|
)
|
|
$
|
7,256
|
|
|
$
|
(42,643
|
)
|
Depreciation and amortization
|
|
$
|
16,504
|
|
|
$
|
(36
|
)
|
|
$
|
16,468
|
|
Impairment
|
|
$
|
58,929
|
|
|
$
|
(11,316
|
)
|
|
$
|
47,613
|
|
Deferred income tax benefit
|
|
$
|
(28,007
|
)
|
|
$
|
4,096
|
|
|
$
|
(23,911
|
)
|
5
For the fiscal quarter ended September 30, 2009:
Consolidated Balance Sheet line item (in thousands):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of September 30, 2009
|
|
|
Previously
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
As Restated
|
Accumulated depreciation, amortization and impairment
|
|
$
|
(478,839
|
)
|
|
$
|
23,572
|
|
|
$
|
(455,267
|
)
|
Total properties and equipment
|
|
$
|
229,560
|
|
|
$
|
23,572
|
|
|
$
|
253,132
|
|
Deferred tax asset
|
|
$
|
48,823
|
|
|
$
|
(8,599
|
)
|
|
$
|
40,224
|
|
Total assets
|
|
$
|
309,320
|
|
|
$
|
14,973
|
|
|
$
|
324,293
|
|
Accumulated deficit
|
|
$
|
(219,676
|
)
|
|
$
|
14,973
|
|
|
$
|
(204,703
|
)
|
Stockholders equity
|
|
$
|
(3,403
|
)
|
|
$
|
14,973
|
|
|
$
|
11,570
|
|
Total liabilities and stockholders equity
|
|
$
|
309,320
|
|
|
$
|
14,973
|
|
|
$
|
324,293
|
|
|
Consolidated Statement of Operations line
item (in thousands except per share amounts):
|
|
|
|
For the three months ended
|
|
For the nine months ended
|
|
|
September 30, 2009
|
|
September 30, 2009
|
|
|
Previously
|
|
|
|
|
|
As
|
|
Previously
|
|
|
|
As
|
|
|
Reported
|
|
Adjustments
|
|
Restated
|
|
Reported
|
|
Adjustments
|
|
Restated
|
Depreciation and amortization
|
|
$
|
7,304
|
|
|
$
|
605
|
|
|
$
|
7,909
|
|
|
$
|
23,808
|
|
|
$
|
569
|
|
|
$
|
24,377
|
|
Impairment
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
58,929
|
|
|
$
|
(11,316
|
)
|
|
$
|
47,613
|
|
Total operating expenses
|
|
$
|
23,695
|
|
|
$
|
605
|
|
|
$
|
24,300
|
|
|
$
|
130,250
|
|
|
$
|
(10,747
|
)
|
|
$
|
119,503
|
|
Operating income (loss)
|
|
$
|
1,436
|
|
|
$
|
(605
|
)
|
|
$
|
831
|
|
|
$
|
(68,688
|
)
|
|
$
|
10,747
|
|
|
$
|
(57,941
|
)
|
Income (loss) before income taxes
|
|
$
|
(4,075
|
)
|
|
$
|
(605
|
)
|
|
$
|
(4,680
|
)
|
|
$
|
(81,918
|
)
|
|
$
|
10,747
|
|
|
$
|
(71,171
|
)
|
Income tax provision (benefit)
|
|
$
|
(1,358
|
)
|
|
$
|
(203
|
)
|
|
$
|
(1,561
|
)
|
|
$
|
(29,302
|
)
|
|
$
|
3,893
|
|
|
$
|
(25,409
|
)
|
Net income (loss)
|
|
$
|
(2,717
|
)
|
|
$
|
(402
|
)
|
|
$
|
(3,119
|
)
|
|
$
|
(52,616
|
)
|
|
$
|
6,854
|
|
|
$
|
(45,762
|
)
|
Basic earnings (loss) per share
|
|
$
|
(0.04
|
)
|
|
$
|
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.70
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.61
|
)
|
Diluted earnings (loss) per share
|
|
$
|
(0.04
|
)
|
|
$
|
|
|
|
$
|
(0.04
|
)
|
|
$
|
(0.70
|
)
|
|
$
|
0.09
|
|
|
$
|
(0.61
|
)
|
|
Consolidated Statement of Cash Flows line item (in thousands):
|
|
|
|
For the nine months ended September 30, 2009
|
|
|
Previously
|
|
|
|
|
|
|
Reported
|
|
Adjustments
|
|
As Restated
|
Net income (loss)
|
|
$
|
(52,616
|
)
|
|
$
|
6,854
|
|
|
$
|
(45,762
|
)
|
Depreciation and amortization
|
|
$
|
23,808
|
|
|
$
|
569
|
|
|
$
|
24,377
|
|
Impairment
|
|
$
|
58,929
|
|
|
$
|
(11,316
|
)
|
|
$
|
47,613
|
|
Deferred income tax benefit
|
|
$
|
(29,583
|
)
|
|
$
|
3,893
|
|
|
$
|
(25,690
|
)
|
6
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
|
|
|
RAM ENERGY RESOURCES, INC.
(Registrant)
|
|
December 1, 2009
|
By:
|
/s/ G. Les Austin
|
|
|
|
Name:
|
G. Les Austin
|
|
|
|
Title:
|
Senior Vice President and Chief Financial Officer
|
|
|
7
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