RAM Energy Resources, Inc. (Nasdaq: RAM) today announced an update to activity in its Mississippian oil play in Osage County, Oklahoma which encompasses the company’s 56,320 acre concession, a part of the broad Mississippi Chat/Mississippi Solid/Arbuckle oil play in the region. Interpretation of the first phase of 3-D seismic (Phase I), acquired in 2010, and initial drilling results indicate that a substantial portion of the acreage surveyed could be prospective. Although the Mississippi Chat has been the company’s primary objective to date, the company’s practice is to drill through the Chat and through the Mississippi Lime formation in order to gather additional science for future development. The initial wells drilled have encountered Chat zones 40 – 70 feet thick and porosities ranging from 20% – 35%. Similarly, initial wells have drilled through Mississippi Lime zones of 100 feet or more in thickness with a porosity range similar to the 5% – 15% range of porosities experienced by other operators in the western portions of the play. Progress on the initial Phase I 3-D seismic shoot covering 16,000 acres can be broken down into the following areas: (1) Southern Surber Area: RAM has drilled the following eight wells in the southern area of Phase I seismic shoot: Surber 1-26, Ricketts 3-26, Surber SWD, Farmland 1-26, Surber 2-T, Surber 2-27, Surber 1-35, Ricketts 2-35. The Surber 1-26, the initial discovery well in this area, was drilled to a total depth of 2,530 feet and completed in the Mississippi Chat. After acidizing, this well had initial production of 80 barrels of oil per day (BOPD) and declined to 20 – 25 BOPD prior to fracture stimulation. The Surber 1-26 was slick water fractured in late March 2011 and, after stimulation, was producing 100 – 107 barrels of oil equivalent per day (BOEPD) comprised of 87 BOPD and 119 thousand cubic feet of gas per day (MCFPD). Since June 1 it has been producing 65 – 75 BOEPD, comprised of 35 – 45 BOPD and 200 MCFPD, while we continue to de-water the formation.
The capacity of the Surber SWD to dispose of produced salt water has limited the company’s ability to fully test the other wells in the southern Surber area. RAM is currently increasing the capacity of the Surber SWD to dispose of 7,000 – 8,000 barrels of salt water per day and installing production and testing equipment on the remaining wells in the Surber area. Daily production for the Surber 1-26 has been consistently above the average type curve of wells in the area studied by RAM and has already cumulatively produced in excess of 5,000 barrels of oil in the past nine months.(2) Central Mashunkashey Area: The first well drilled by RAM in the play, the Mashunkashey 1-15 which targeted the Mississippi Chat and deeper Arbuckle formations, was found not commercially productive in either formation; however it was completed in a shallower Skinner Sand. Late in the first quarter of this year RAM drilled the Farmland 2-16 and has recently tested a Bartlesville Sand at 20 – 30 BOPD. Also, late in the first quarter of this year RAM drilled the Christenson 3-2 to the Arbuckle formation and recently tested 750 MCFPD of gas. The Farmland 1-20, another seismic anomaly, will be drilled in the central Mashunkashey area in the second half of 2011. (3) North Jones Area: RAM is currently working on securing a drilling rig for up to four wells in the northern portion of the Phase I seismic shoot. The Jones 1-33, Stuart 1-28 and the Kendrick 1-27 wells have been permitted, and the Stuart 2-28 SWD permit is in process. The company anticipates drilling these test wells in the third quarter of this year. Phase II of the 3-D seismic shoot covering an additional 19,000 acres of the company’s Mississippian oil concessions is currently underway with approximately 50% of the acquisition completed.
“We continue to be encouraged by the initial results from our Osage Mississippian oil concession. Once production and disposal facilities are finalized in our southern Surber area, we will provide the market additional production information on this area, as well as regular updates on drilling activity in the central and northern areas of Phase I. We also look forward to completing the acquisition of Phase II’s 19,000 acres of seismic data,” said Larry E. Lee, President and CEO.Electra/Burkburnett – Production Enhancement Through Waterflood RAM continues redevelopment of selected leases in its Electra/Burkburnett area of north Texas in an effort to mitigate normal production decline. The company has increased to 15 the number of wells converted to injectors since the second half of 2010 in an effort to enhance the productivity of the existing waterflood at its Piper lease. As a result of the effort to date, production on the lease has more than doubled to 150 BOPD from the previous range of 60 – 70 BOPD. One additional injector is planned for the near future. An 8% – 10% oil cut in new wells drilled in the area indicates that additional upside estimated ultimate recovery of reserves potentially exists from additional waterflood development. The significance of this initial effort is that the Piper lease is only one of many leases in the Electra/Burkburnett area which could potentially benefit from waterflood development. 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 status of exploratory or other operational activities are estimates of events or developments that the company expects or believes and 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 ResourcesRAM 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 RAM. For additional information, visit the company website at www.ramenergy.com.