RAM Energy Resources Reports 2010 Year-End Proved Reserves

RAM Energy Resources, Inc. (Nasdaq: RAME) announced today that estimates of the company’s proved oil and natural gas reserves at December 31, 2010, calculated using SEC rules (SEC Case) totaled 24.4 million barrels of oil equivalent (BOE) with a PV-10 value of $364.2 million. In the fourth quarter 2010 RAM completed two property divestitures in conjunction with the execution of its strategic alternative initiative to reduce debt. RAM estimates that proved reserves associated with the sales aggregated to 4.6 million BOE and accounted for 48% of the decline in proved reserves at December 31, 2010, compared to the prior year’s proved reserves of 33.9 million BOE.

In addition to the SEC Case, RAM also computed an estimate of proved reserves at December 31, 2010, using NYMEX futures strip pricing for the ensuing 36 months, the same pricing used by the company’s lenders to support the company’s borrowing base. RAM’s borrowing base was $145 million at year-end 2010, after adjusting for property divestitures in the fourth quarter of the year. Proved reserve volumes assessed using strip pricing at December 31, 2010, which averaged $93.47 per barrel of oil and $5.03 per Mcf of natural gas, were 25.3 million BOE with a PV-10 value of $483.8 million.

The company added 545 thousand BOE of reserves during the year, replacing 25% of 2010 production of 2.2 million BOE. These results are below RAM’s recent norm and reflect weather interruptions early in the year, the limited availability of crews and equipment to fracture and stimulate wells drilled in South Texas, both of which reduced planned drilling activity, and RAM’s initiation of a review of strategic alternatives in mid-2010, which effectively reprioritized its capital spending and activity goals for the second half of the year. RAM continues to employ, as it has in the past, an independent petroleum engineering firm to prepare estimates of its proved reserves in all of its operating areas.

Reserve Composition

Year-end 2010 estimated proved reserves of 24.4 million BOE are composed of 13.1 million barrels of oil, 2.4 million barrels of natural gas liquids (NGLs) and 53.6 Bcf of natural gas. Crude oil and NGLs represent 64% of total proved reserves, and natural gas reserves represent the remaining 36 % of reserves. Proved developed reserves accounted for 62% of total proved reserves and accounted for 71% of the total PV-10 value of $364.2 million, providing an underpinning to the confidence in the cash flow stream in 2011 and beyond.

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 reserves, including prior year reserves, alternative reserve calculations, the reconciliation of reserve quantities, estimates of PV-10, prices of oil and gas and events or developments that the company expects or believes are forward-looking statements. Although RAM 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, developmental, exploitation and exploration successes, actions taken and to be taken by governments as a result of political and economic conditions or other factors, inflation rates, 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 is an independent energy company engaged in the acquisition, development, exploitation and exploration of oil and gas properties and the marketing of natural gas and crude oil. Company headquarters are in Tulsa, Oklahoma, and its common shares are traded on the Nasdaq Exchange under the symbol RAME. For additional information, visit the company website at www.ramenergy.com.

TABLE 1

Proved Reserves (SEC Case)

Oil

Gas

Ngl.

Equivalent

Reserve

PV10

(MBbl)

(MMcf)

(MBbl)

(MBOE)

%

M$

Year-End 2010

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          PDP
        
        
        
        
          8,087
        
        
        
        
          24,134
        
        
        
        
          1,358
        
        
        
        
        
        
          13,467
        
        
        
        
          55
        
        
        
        
        
        
          232,449
        
      
      
        
          PDNP
        
        
        
        
          327
        
        
        
        
          7,642
        
        
        
        
          128
        
        
        
        
        
        
          1,729
        
        
        
        
          7
        
        
        
        
        
        
          26,903
        
      
      
        
          PUD
        
        
        
        
          4,672
        
        
           
        
        
          21,832
        
        
           
        
        
          889
        
        
           
        
        
           
        
        
          9,200
        
        
           
        
        
          38
        
        
           
        
        
           
        
        
          104,896
        
      
      
        
          Total Proved (1)
        
        
          13,086
        
        
        
        
          53,608
        
        
        
        
          2,375
        
        
        
        
        
        
          24,396
        
        
        
        
          100
        
        
        
        
        
        
          364,248
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          Developed
        
        
        
        
          8,414
        
        
        
        
          31,776
        
        
        
        
          1,486
        
        
        
        
        
        
          15,196
        
        
        
        
          62
        
        
        
        
        
        
          259,352
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Year-End 2009

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Total Proved (2)
        
        
          14,067
        
        
        
        
          89,227
        
        
        
        
          4,983
        
        
        
        
        
        
          33,922
        
        
        
        
          100
        
        
        
        
        
        
          336,053
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
          

Proved Reserves (NYMEX Strip Case)

Oil

Gas

Ngl.

Equivalent

PV10

(MBbl)

(MMcf)

(MBbl)

(MBOE)

M$

Year-End 2010

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Total Proved (3)
        
        
          13,652
        
        
        
        
          55,038
        
        
        
        
          2,445
        
        
        
        
        
        
          25,270
        
        
        
        
        
        
        
        
        
        
          483,792
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
           
        
      
      
        
        
        
        
        
        
        
        
        
          

2010 Reserve Reconciliation

Equivalent

(MBOE)

Total Proved

        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          As of Dececember 31, 2009
        
        
        
        
        
        
        
        
          33,922
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Ext., discoveries, and Additions
        
        
        
        
        
        
        
        
          545
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Purchases
        
        
        
        
        
        
        
        
        
        
        
        
          0
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Sales
        
        
        
        
        
        
        
        
        
        
        
        
          (4,610
        
        
          )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Production
        
        
        
        
        
        
        
        
        
        
        
        
          (2,161
        
        
          )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          Revisions of previous estimates
        
        
        
        
        
        
        
        
          (3,300
        
        
          )
        
        
        
        
        
        
        
        
        
        
        
        
        
        
        
      
      
        
          

As of December 31, 2010

24,396

(1)

Reserve estimates as of December 31, 2010, have been prepared under the SEC's new rules for oil and gas reporting that are effective for fiscal years ending on or after December 31, 2010. These new rules require SEC reporting companies to prepare their reserve estimates using, among other things, revised reserve definitions and revised pricing based on 12-month unweighted NYMEX first-day-of-the-month average pricing, instead of the prior requirement to use pricing at the end of the period. Prices used to calculate 2010 year-end proved reserves were $79.43/Bbl of oil and $4.38/MCF.

 

(2)

Prices used to calculate 2009 year-end reserves were $61.18/Bbl of oil and $3.87/Mcf of natural gas and reflect the price of oil and natural gas on December 31, 2009.

 

(3)

Estimates of proved reserves computed using NYMEX Strip Prices for 36 months from December 31, 2010 with costs held constant.