RAM Energy Resources Announces North Texas Gas Asset Sale Close and Borrowing Base Reset
09 Dezembro 2010 - 10:30AM
Business Wire
RAM Energy Resources, Inc. (Nasdaq: RAME) today announced it has
closed a purchase and sale agreement effecting the strategic
divestiture of the company’s North Texas Barnett Shale and
Boonsville properties to Milagro Producing, LLC for $43.7 million
in cash, prior to customary closing adjustments. The transaction
closed on December 8, 2010. This transaction represents the first
asset sale to be completed pursuant to RAM’s announced review of
strategic alternatives earlier in the year and its decision to
target debt reduction through asset divestitures.
Use of Proceeds
Proceeds of $16.0 million will be applied to reduce the
outstanding balance on RAM’s revolving credit facility which stood
at $133.5 million as of September 30, 2010. The remaining net
proceeds will be applied to reduce the outstanding balance on the
company’s Term loan which was $113.3 million at September 30,
2010.
Borrowing Base
As a result of the reduction in collateral represented by the
asset sale, the company’s borrowing base of $165.0 million has been
reset by lenders at $145.0 million. However, as a result of the
sale and application of proceeds, RAM’s effective liquidity has
improved by approximately $12.1 million and covenant ratios have
improved as well.
Advantaged Revenue Stream
In addition to liquidity, RAM’s remaining mix of production and
revenue improves as well as a result of the transaction. The
company’s actual production of crude and natural gas liquids (NGLs)
as a percent of total barrels of oil equivalent production (BOE)
reported in the third quarter ended September, 30, 2010 was 63%.
Assuming production from the sale of these substantially
non-operated natural gas producing properties were absent for the
entire third quarter, the proportion of crude and liquids would
have risen to 64% of total BOE produced in that period. Similarly
the percent of total revenues represented by oil and NGLs would
have been 83% versus the actual 81% reported in the third quarter
2010.
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
anticipated use of proceeds from asset sales to reduce debt, any
effort to refinance existing outstanding debt 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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