RAM Energy Resources, Inc. (NASDAQ: RAM) today announced a company-wide reorganization of operating and administrative functions, with the annual cost savings of such measures projected to be approximately $3.0 million.
The company is consolidating certain operating, land and exploration functions previously located in the company’s Plano, Texas office to the company’s headquarters in Tulsa, Oklahoma and eliminating an executive management layer in the Tulsa office. The reorganization includes the planned retirement of two senior vice presidents and the appointment of a new Chief Operating Officer, as also announced today. The company will be taking a charge of $1.8 million related to these actions.
Operational Plan for Restructured RAM Energy Resources, Inc.
On a going forward basis, the company will focus all efforts on its four core assets which include the Electra/Burkburnett field in north Texas which is producing approximately 1,300 BOE per day; the Fitts/Allen field in Oklahoma which is producing approximately 825 BOE per day; the south Texas and Gulf Coast fields which are producing approximately 1,100 BOE per day; and its non-core and non-operated fields which continue to contribute approximately 650 BOE per day. The company plans to complete the vertical drilling scheduled for 2011 in its Osage exploratory Mississippian oil play in Northern Oklahoma early in the fourth quarter and begin the drilling of the company’s first horizontal Mississippian well in early 2012.
RAM will continue to evaluate certain of our assets for strategic divestiture in order to continue the deleveraging of our balance sheet or to provide additional capital for our exploratory plays. The previously announced possible sale of an undivided interest in the company’s Electra/Burkburnett properties to Argent Energy Trust has been put on hold pending such improvement in market conditions as will permit completion of the Argent IPO, which was originally planned for early October. The offering of trust units of Argent Energy Trust will be made within the United States only by Argent to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The securities to be offered by Argent have not been registered under the Securities Act or any state securities laws, and unless so registered, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any security and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offering would be unlawful.