RAM Energy Resources Announces Agreement In Principle To Sell A Majority Stake In The Company’s Electra/Burkburnett Field; Proceeds To Reduce Debt

RAM Energy Resources, Inc. (Nasdaq: RAM) today announced that it has reached an agreement in principle to sell a majority interest in the company’s Electra/Burkburnett field, located in Wichita and Wilbarger Counties, Texas, to Argent Energy Trust, a recently formed Canadian energy trust. Argent has filed a preliminary prospectus with the Canadian regulatory authorities for an initial public offering of its trust units in Canada. The preliminary prospectus describes Argent’s intent to acquire an undivided 90% interest in RAM’s Electra/Burkburnett property with a portion of the IPO proceeds and sets out the expected terms of the transaction. The sale is contingent upon the successful completion of the IPO, the negotiation and execution of a definitive purchase and sale agreement and the negotiation and execution of an agreement for the further development of the property with RAM continuing to serve as operator following the closing.

RAM plans to use the anticipated proceeds from the sale of its working interest in the Electra/Burkburnett properties to reduce the indebtedness outstanding under the company’s senior secured credit facilities. The balance outstanding under the facilities at June 30, 2011 was $205 million, composed of $75 million of term debt bearing an interest rate of LIBOR plus 9% and $130 million under the revolving credit facility with a current usage-based interest rate of LIBOR plus 3%. RAM expects to apply $75 million of the sale proceeds to repay in full the high-cost term loan facility, with the balance, less fees, prepayment premiums and other transaction expenses, applied to reduce current borrowings under the revolver. Closing would be expected to occur sometime in early October 2011, provided a successful completion of the Argent IPO and the satisfaction of all closing conditions transpire.

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.

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 possible outcome of the purchase and sale agreement, the percentage of working interest to be potentially sold, the potential range of gross proceeds which could accrue to RAM, the likelihood of Argent Energy Trust raising sufficient capital to complete the purchase of assets from RAM, other factors which could influence the ultimate completion of the transaction, the potential impact to RAM’s production and reserves of the sale of Electra/Burkburnett working interest and the amount of debt ultimately reduced, are all 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, 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.

Copyright Business Wire 2010

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