RAM Energy Resources Announces Operational Update to Planned Activity at Osage Exploration Play
April 11 2011 - 7:30AM
- 12 Wells Planned for Osage Mississippian Oil Play
During 2011
- Planned Spending of $5.4 Million, 15 % of CAPEX Budget
of $35 Million
- More Science – Two Early Wells Undergoing Fracture
Stimulation
RAM Energy Resources, Inc. (Nasdaq:RAME) today announced an update
to activity in its Mississippian oil play in Osage County,
Oklahoma. Approximately $5.4 million, or 15%, of RAM's 2011 capital
expenditure budget totaling $35 million is allocated to 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, acquired in 2010,
and initial drilling results indicated 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% to 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% to 15% range of porosities experienced by other
operators in the western portions of the play.
"We are encouraged with the initial results from our Osage
concession and have allocated a large proportion of our capital
budget to test the productivity of the area. The combination of rig
availability, relatively low drilling cost per well and ample
infrastructure in the area allows us to aggressively pursue the
play in the coming year," said Larry Lee, CEO of RAM.
Stepped up Pace of Drilling Planned in Osage
Mississippian Exploration Play
Following the drilling of the company's three initial vertical
wells in the concession during 2010, the company drilled the
Farmland #1 during the first quarter 2011, targeting the
Mississippi Chat formation. Currently the company is evaluating
cores taken from the well. Also during the first quarter 2011, the
Surber #3-SWD, a salt water disposal well, was drilled to service
existing and future producing wells in the area. In the Surber
#2-Twin, drilled during the first quarter near the Surber #3 SWD,
core samples have been taken and casing set. RAM is awaiting the
evaluation of the core data prior to completing.
The Rickets #3 well and the Surber #1 well, which were drilled
to the Mississippi Chat formation late in 2010, have been fracture
stimulated in order to test the impact of the slick water frac
technique on reservoir permeability, thus advancing the science and
knowledge associated with completion techniques in the area.
Completion of the salt water disposal well facilitated the ability
to fracture these and other planned wells in the area. The company
has spud the next well in the series, the Surber #2-27,
approximately one section to the west of the Surber #2-Twin. This
offset to the Surber #1 and Surber #2-Twin is an exploration well
targeting the continuation of the Mississippi Chat formation
through seismic identification and sample cuttings from a
previously drilled well by another operator. In mid-April the
Farmland #2-16, an exploratory well, is scheduled to spud, also
targeting the Mississippi Chat. The well, located approximately 2
sections northwest of the Surber #2-Twin, has been permitted and
the location built. Immediately following the drilling of this
well, the rig is scheduled to move to the location of the
Christiansen #3-2. This exploration well is scheduled for a spud
date later in April. The well targets the Arbuckle formation and
will evaluate the Mississippi Chat and Lime formations. Two wells
initially planned for the fourth quarter, the Surber #1-35 and the
Rickets #1-35, are now likely to be drilled late in the second
quarter as a result of rig availability. The drilling permit
application process is underway for both of these wells. The
location of the wells is anticipated to be immediately south of the
successful Surber #1 well drilled in late 2010 which recorded an
initial production rate of 80 barrels of oil per day (BOPD) in the
Mississippi Chat formation.
Subsequently, in the third quarter 2011, the company plans to
drill the Farmland #1-20 exploration well located southwest of the
Farmland #2-16. At the northern boundary of RAM's initial seismic
survey, the company plans to drill three wells; the Kendrick #1-27,
the Stuart #1-28 and the Jones #1-33. These three exploration wells
are designed to test the productivity of the Mississippi Chat and
Lime formations in this unexplored part of the concession. If
commercial potential exists, then RAM is likely to also drill
another salt water disposal well to service these and potentially
other future wells in this area of the lease. Archeological studies
are proceeding on these wells which are precursors of the drilling
permitting process.
In May 2011 the company plans to initiate acquisition of a
second round of 3-D seismic on its Osage concession adjoining that
of its first round of seismic acquisition. This second phase of 3-D
seismic acquisition is planned to cover an additional 19,840 acres
in the company's concession and is anticipated to add additional
drilling prospects principally for 2012 and beyond when
interpreted, later in 2011.
Advantaged Revenue Stream
Within the broad Mississippian play, the portion of the area
covering RAM's Osage concession appears to yield primarily oil.
Accordingly, commercialization of the company's acreage could add
significantly to RAM's already above-industry-average mix of oil
and oil-price driven natural gas liquids (NGL) in its hydrocarbon
mix. The proportion of crude and NGLs as a percent of total BOE
produced rose to 66% in December 2010 (adjusted to exclude assets
sold in December 2010). Similarly, based on RAM's proved reserves
at year-end 2010, oil and NGLs accounted for 64 percent of total
proved reserves.
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 company's anticipated capital spending, planned drilling,
estimated productivity of its Osage concession, estimated formation
thickness and porosities, the company's production mix, as well as
events or 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, 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 Resources
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.
CONTACT: Robert E. Phaneuf
Vice President - Corporate Development
(918) 632-0680
Ram Energy Resources, Inc. (MM) (NASDAQ:RAME)
Historical Stock Chart
From Sep 2024 to Oct 2024
Ram Energy Resources, Inc. (MM) (NASDAQ:RAME)
Historical Stock Chart
From Oct 2023 to Oct 2024