RAM Energy Resources Updates Its Osage Exploratory Play, the Return of Offline Wells to Production in North Texas & South T...
07 Octubre 2010 - 6:23AM
Business Wire
RAM Energy Resources, Inc. (Nasdaq: RAME) today announced
updated operational activity in three select areas of interest.
Osage Concession – Initial Surber #1 Well Results
Encouraging
RAM owns a 100% interest in a 53,120 acre concession in Osage
County, Oklahoma, which is prospective for oil in shallow (1,500 –
3,000 ft. depth) Mississippi Chat and Lime Formations. RAM has shot
and processed 3-D seismic covering 16,000 acres and plans to shoot
additional 3-D seismic this winter over an adjacent 16,000 acre
tract.
The first well drilled by RAM in the play, the Mashunkashey #1,
which targeted the Mississippi Chat and the deeper Arbuckle
formations was found not commercially productive in either
formation; however, the company has identified a prospective zone
in the wellbore and plans to test the Skinner Sand in this well
during the fourth quarter. Technical information obtained from the
Mashunkashey #1 well was applied to assist in the interpretation of
3-D seismic and was instrumental in the drilling of the second
well, the Surber #1. The Surber #1, a vertical well, was drilled to
a total depth of 2,530 feet and 5 ½ inch casing was set to test the
Mississippi Chat formation. After acidizing, this well had initial
production of 80 barrels of oil per day (BOPD) and is currently
producing 40 – 50 BOPD with a 15 – 20% oil cut. Daily production to
date on the Surber #1 is above the average type curve of wells in
the area studied by RAM. Two additional wells and one re-entry well
are currently being permitted with work to begin mid-fourth
quarter. Approximately one-third of the initial 16,000 acre seismic
shoot appears prospective for exploration.
RAM Returns Weather Impacted Offline Wells to Production in
Electra/Burkburnett
Delays in reworking and recompleting wells in the company’s
Electra/Burkburnett area in north Texas resulting from the
inability to move equipment to well sites in the wet conditions
which prevailed during the second quarter has been ameliorated
during the third quarter. RAM contracted with outside vendors for
the use of two additional service rigs, took delivery of another
purchased workover rig and refurbished one additional company owned
workover rig to complement its existing fleet of 7 company-owned
workover rigs in an effort to expedite the return to production of
offline wells over the course of the second half of the year. The
number of offline wells in Electra/Burkburnett has been reduced
from 90, at the peak during the second quarter, to approximately 45
wells currently; close to a level RAM considers normal based on
approximately 850 wells operated by the company in this mature oil
play.
On the company’s Piper lease in the Electra/Burkburnett area,
RAM is in the process of converting 16 wells to injectors in an
attempt to enhance reservoir sweep in the area and improve
production. This conversion is anticipated to be completed during
the fourth quarter. The company is also reviewing existing water
injection patterns on several offsetting leases in
Electra/Burkburnett to potentially improve the overall sweep
efficiency and production.
South Texas
During the third quarter, RAM continued to be active in its
development program targeting the Vicksburg formation in the
company’s La Copita Field of Starr County, Texas and adjacent
fields. Six wells in this play have been drilled this year. Service
contractors are scheduled to return to La Copita in mid-fourth
quarter to stimulate, fracture and complete the Brannan # 11 well,
the Garza Hitchcock # 27 well, and the Heard #18 well, all which
have been drilled and are currently awaiting completion services.
Competition for service contractors in the South Texas area remains
brisk and obtaining fracturing and stimulation services on a timely
basis after wells are drilled to total depth continues to slow the
process of bringing production from this play online. As a result
of the time lag between the outflow of capital expenditures for
drilling and the initiation of revenue from production, coupled
with the company’s expectation that the price of natural gas will
remain low in the near term, RAM may postpone the drilling of the
last three South Texas wells planned in the 2010 revised capital
expenditure budget until these uncertainties are resolved.
High Proportion of Oil and NGL in Production Mix Creates
Price Advantaged Revenue Stream and Supports Borrowing Base
The company continues to have a price advantaged revenue stream
compared to many of its industry peers as a result of the premium
price of oil relative to natural gas prevailing in the market and
its above average weighting of oil and natural gas liquids (NGL) in
its hydrocarbon mix. Sixty-three percent of RAM’s production is
derived from oil and NGLs, the price of which is influenced by the
price of oil.
As a result of the semi-annual borrowing base redetermination
under RAM’s senior secured credit facility, on September 30, 2010,
the company’s lenders approved a borrowing base of $165.0 million
under RAM’s revolver. At September 30, 2010 the balance outstanding
under the revolver was $133.5 million.
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
estimates of drilling activities and costs, production levels,
timing of well hook-ups, hydrocarbon prices, capital spending,
projected ultimate well recovery and production type curve, cash
flow and events or other 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.
About RAM Energy
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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