FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
For the quarterly period ended June 30, 2009
OR |
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o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 |
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For the transition period from to |
Commission File Number: 000-50682
RAM Energy Resources, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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1311
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20-0700684 |
(State or other jurisdiction of incorporation
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(Primary Standard Industrial
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(I.R.S. Employer Identification Number) |
or organization)
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Classification Code Number) |
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5100 East Skelly Drive, Suite 650, Tulsa, OK 74135
(Address of principal executive offices)
(918) 663-2800
(Registrants telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or
for such shorter period that the registrant was required to file such reports) and (2) has been
subject to such filing requirements
for the past 90 days.
Yes x No o
Indicate by check mark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to
be submitted and posted
pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or
for such shorter period that the
registrant was required to submit
and post such files).
Yes o No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated
filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of large
accelerated filer, accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.
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Large Accelerated Filer o
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Accelerated Filer x |
Non-Accelerated Filer o
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(Do not check if a smaller reporting company)
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Smaller Reporting Company o |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
Yes o No x
At August 6, 2009, 76,865,587 shares of the Registrants Common Stock were outstanding.
Second Quarter 2009 Form 10-Q Report
TABLE OF CONTENTS
2
ITEM 1 FINANCIAL STATEMENTS
RAM Energy Resources, Inc.
Condensed Consolidated Balance Sheets
(in thousands, except share and per share amounts)
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June 30, |
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December 31, |
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2009 |
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2008 |
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(unaudited) |
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ASSETS |
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CURRENT ASSETS: |
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Cash and cash equivalents |
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$ |
2,204 |
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$ |
164 |
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Cash, restricted |
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- |
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16,000 |
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Accounts receivable: |
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Oil and natural gas sales, net of allowance of $50 ($50 at December 31, 2008) |
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11,408 |
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8,702 |
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Joint interest operations, net of allowance of $515 ($515 at December 31, 2008) |
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801 |
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818 |
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Other, net of allowance of $35 ($35 at December 31, 2008) |
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910 |
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4,045 |
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Derivative assets |
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3,051 |
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21,006 |
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Prepaid expenses |
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1,982 |
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2,330 |
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Deferred tax asset |
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6,518 |
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- |
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Other current contingencies |
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- |
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2,816 |
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Other current assets |
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4,297 |
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4,141 |
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Total current assets |
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31,171 |
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60,022 |
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PROPERTIES AND EQUIPMENT, AT COST: |
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Proved oil and natural gas properties and equipment, using full cost accounting |
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701,860 |
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683,341 |
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Other property and equipment |
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9,117 |
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9,460 |
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710,977 |
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692,801 |
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Less accumulated depreciation, amortization and impairment |
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(471,557 |
) |
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(396,301 |
) |
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Total properties and equipment |
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239,420 |
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296,500 |
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OTHER ASSETS: |
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Deferred tax asset |
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44,434 |
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28,724 |
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Derivative assets |
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- |
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4,531 |
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Deferred loan costs, net of accumulated amortization of $1,880 ($1,282 at December 31, 2008) |
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5,741 |
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4,015 |
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Other |
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2,335 |
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2,053 |
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Total assets |
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$ |
323,101 |
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$ |
395,845 |
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LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT) |
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CURRENT LIABILITIES: |
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Accounts payable: |
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Trade |
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$ |
20,025 |
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$ |
26,370 |
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Oil and natural gas proceeds due others |
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8,912 |
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7,218 |
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Other |
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261 |
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982 |
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Accrued liabilities: |
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Compensation |
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1,065 |
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2,893 |
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Interest |
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607 |
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865 |
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Franchise taxes |
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1,340 |
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1,300 |
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Income taxes |
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193 |
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399 |
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Contingencies |
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- |
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16,000 |
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Deferred income taxes |
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- |
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5,779 |
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Asset retirement obligations |
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1,073 |
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1,093 |
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Long-term debt due within one year |
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145 |
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160 |
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Total current liabilities |
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33,621 |
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63,059 |
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OIL & NATURAL GAS PROCEEDS DUE OTHERS |
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1,695 |
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2,523 |
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DERIVATIVE LIABILITIES |
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1,732 |
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- |
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LONG-TERM DEBT |
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255,514 |
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250,536 |
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ASSET RETIREMENT OBLIGATIONS |
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30,864 |
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29,106 |
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COMMITMENTS AND CONTINGENCIES |
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900 |
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900 |
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STOCKHOLDERS EQUITY (DEFICIT): |
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Common stock, $0.0001 par value, 100,000,000 shares authorized, 80,623,674 and 79,423,574, shares issued,
76,840,587 and 78,532,134 shares outstanding at June 30, 2009 and December 31, 2008, respectively |
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8 |
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8 |
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Additional paid-in capital |
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221,893 |
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220,800 |
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Treasury stock - 3,783,087 shares (891,440 shares at December 31,2008) at cost |
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(6,167 |
) |
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(4,027 |
) |
Accumulated deficit |
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(216,959 |
) |
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(167,060 |
) |
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Stockholders equity (deficit) |
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(1,225 |
) |
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49,721 |
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Total liabilities and stockholders equity (deficit) |
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$ |
323,101 |
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$ |
395,845 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
3
RAM Energy Resources, Inc.
Condensed Consolidated Statements of Operations
(in thousands, except share and per share amounts)
(unaudited)
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Three months ended June 30, |
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Six months ended June 30, |
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2009 |
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2008 |
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2009 |
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2008 |
REVENUES AND OTHER OPERATING INCOME: |
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Oil and natural gas sales |
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Oil |
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$ |
16,206 |
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$ |
36,984 |
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$ |
27,464 |
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$ |
65,644 |
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Natural gas |
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4,907 |
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15,349 |
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10,957 |
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26,227 |
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NGLs |
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2,387 |
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5,221 |
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4,135 |
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9,216 |
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Realized gains (losses) on derivatives |
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10,671 |
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(7,218 |
) |
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18,549 |
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(9,536 |
) |
Unrealized losses on derivatives |
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(23,795 |
) |
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(33,808 |
) |
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(24,802 |
) |
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(39,067 |
) |
Other |
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43 |
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117 |
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128 |
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211 |
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Total revenues and other operating income |
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10,419 |
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16,645 |
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36,431 |
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52,695 |
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OPERATING EXPENSES: |
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Oil and natural gas production taxes |
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927 |
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3,341 |
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1,799 |
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5,770 |
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Oil and natural gas production expenses |
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9,119 |
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9,458 |
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19,204 |
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18,780 |
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Depreciation and amortization |
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7,560 |
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11,179 |
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16,504 |
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21,802 |
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Accretion expense |
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532 |
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540 |
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936 |
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1,078 |
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Impairment |
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- |
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- |
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58,929 |
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- |
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Share-based compensation |
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552 |
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932 |
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1,093 |
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1,479 |
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General and administrative, overhead and other expenses, net of
operators overhead fees |
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3,745 |
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5,539 |
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8,090 |
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11,056 |
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Total operating expenses |
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22,435 |
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30,989 |
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106,555 |
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59,965 |
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Operating loss |
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(12,016 |
) |
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(14,344 |
) |
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(70,124 |
) |
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(7,270 |
) |
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OTHER INCOME (EXPENSE): |
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Interest expense |
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(3,601 |
) |
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(6,197 |
) |
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(7,209 |
) |
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(14,359 |
) |
Interest income |
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9 |
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75 |
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29 |
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|
148 |
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Other expense |
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(106 |
) |
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(205 |
) |
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(539 |
) |
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(354 |
) |
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LOSS BEFORE INCOME TAXES |
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(15,714 |
) |
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(20,671 |
) |
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(77,843 |
) |
|
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(21,835 |
) |
INCOME TAX BENEFIT |
|
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(3,908 |
) |
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(14,809 |
) |
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(27,944 |
) |
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(15,450 |
) |
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Net loss |
|
$ |
(11,806 |
) |
|
$ |
(5,862 |
) |
|
$ |
(49,899 |
) |
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$ |
(6,385 |
) |
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BASIC LOSS PER SHARE |
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$ |
(0.16 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.66 |
) |
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$ |
(0.10 |
) |
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BASIC WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
74,696,028 |
|
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|
69,198,767 |
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|
75,986,262 |
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64,190,725 |
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DILUTED LOSS PER SHARE |
|
$ |
(0.16 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.10 |
) |
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|
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DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING |
|
|
74,696,028 |
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|
69,198,767 |
|
|
|
75,986,262 |
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64,190,725 |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
4
RAM Energy Resources, Inc.
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)
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Six months ended June 30, |
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2009 |
|
2008 |
OPERATING ACTIVITIES: |
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Net loss |
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$ |
(49,899 |
) |
|
$ |
(6,385 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities- |
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Depreciation and amortization |
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|
16,504 |
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|
21,802 |
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Amortization of deferred loan costs and Senior Notes discount |
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|
641 |
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|
602 |
|
Accretion expense |
|
|
936 |
|
|
|
1,078 |
|
Impairment |
|
|
58,929 |
|
|
|
|
|
Unrealized loss on derivatives and premium amortization |
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|
25,633 |
|
|
|
39,067 |
|
Deferred income tax benefit |
|
|
(28,007 |
) |
|
|
(15,490 |
) |
Share-based compensation |
|
|
1,093 |
|
|
|
1,479 |
|
Loss on disposal of other property, equipment and subsidiary |
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|
96 |
|
|
|
174 |
|
Other expense |
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|
448 |
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|
174 |
|
Changes in operating assets and liabilities |
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Accounts receivable |
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|
444 |
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|
|
(8,366 |
) |
Prepaid expenses and other assets |
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|
144 |
|
|
|
(405 |
) |
Derivative premiums |
|
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(1,414 |
) |
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|
Accounts payable and proceeds due others |
|
|
(6,200 |
) |
|
|
11,250 |
|
Accrued liabilities and other |
|
|
(18,046 |
) |
|
|
(2,843 |
) |
Restricted cash |
|
|
16,000 |
|
|
|
|
|
Income taxes payable |
|
|
(207 |
) |
|
|
(237 |
) |
Asset retirement obligations |
|
|
(181 |
) |
|
|
(309 |
) |
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|
|
|
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Total adjustments |
|
|
66,813 |
|
|
|
47,976 |
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|
|
|
|
|
Net cash provided by operating activities |
|
|
16,914 |
|
|
|
41,591 |
|
INVESTING ACTIVITIES: |
|
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|
|
|
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|
|
Payments for oil and natural gas properties and equipment |
|
|
(17,746 |
) |
|
|
(37,434 |
) |
Proceeds from sales of oil and natural gas properties |
|
|
213 |
|
|
|
295 |
|
Payments for other property and equipment |
|
|
(363 |
) |
|
|
(504 |
) |
Proceeds from sales of other property and equipment |
|
|
433 |
|
|
|
19 |
|
Proceeds from sale of subsidiary, net of cash |
|
|
|
|
|
|
308 |
|
Payments of merger costs |
|
|
|
|
|
|
35 |
|
|
|
|
|
|
Net cash used in investing activities |
|
|
(17,463 |
) |
|
|
(37,281 |
) |
|
|
|
|
|
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Payments on long-term debt |
|
|
(13,081 |
) |
|
|
(134,924 |
) |
Proceeds from borrowings on long-term debt |
|
|
18,000 |
|
|
|
54,226 |
|
Payments for deferred loan costs |
|
|
(2,324 |
) |
|
|
(30 |
) |
Stock repurchased |
|
|
(6 |
) |
|
|
(70 |
) |
Warrants exercised |
|
|
|
|
|
|
86,614 |
|
|
|
|
|
|
Net cash provided by financing activities |
|
|
2,589 |
|
|
|
5,816 |
|
|
|
|
|
|
INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
2,040 |
|
|
|
10,126 |
|
CASH AND CASH EQUIVALENTS, beginning of period |
|
|
164 |
|
|
|
6,873 |
|
|
|
|
|
|
CASH AND CASH EQUIVALENTS, end of period |
|
$ |
2,204 |
|
|
$ |
16,999 |
|
|
|
|
|
|
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
270 |
|
|
$ |
277 |
|
|
|
|
|
|
Cash paid for interest |
|
$ |
6,788 |
|
|
$ |
16,335 |
|
|
|
|
|
|
DISCLOSURE OF NON CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Asset retirement obligations |
|
$ |
984 |
|
|
$ |
516 |
|
|
|
|
|
|
Payment-in-kind interest |
|
$ |
43 |
|
|
$ |
|
|
|
|
|
|
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
RAM Energy Resources, Inc.
Notes to unaudited condensed consolidated financial statements
|
|
|
A |
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, ORGANIZATION AND BASIS OF PRESENTATION |
1. |
|
Basis of Financial Statements |
The accompanying unaudited condensed consolidated financial statements present the financial
position at June 30, 2009 and December 31, 2008 and the results of operations and cash flows for
the three and six month periods ended June 30, 2009 and 2008 of RAM Energy Resources, Inc. and its
subsidiaries (the Company). These condensed consolidated financial statements include all
adjustments, consisting of normal and recurring adjustments, which, in the opinion of management,
are necessary for a fair presentation of the financial position and the results of operations for
the indicated periods. The results of operations for the three and six months ended June 30, 2009
are not necessarily indicative of the results to be expected for the full year ending December 31,
2009. Reference is made to the Companys consolidated financial statements for the year ended
December 31, 2008, for an expanded discussion of the Companys financial disclosures and accounting
policies.
2. |
|
Nature of Operations and Organization |
The Company operates exclusively in the upstream segment of the oil and gas industry with
activities including the drilling, completion, and operation of oil and gas wells. The Company
conducts the majority of its operations in the states of Texas, Louisiana, Oklahoma, and West
Virginia.
The preparation of financial statements in conformity with accounting principles generally
accepted in the United States of America requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those estimates. Estimates
and assumptions that, in the opinion of management of the Company, are significant include oil and
natural gas reserves, amortization relating to oil and natural gas properties, asset retirement
obligations, contingent litigation settlements, derivative instrument valuations and income taxes.
The Company evaluates its estimates and assumptions on a regular basis. Estimates are based on
historical experience and various other assumptions that are believed to be reasonable under the
circumstances, the results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates used in preparation of the Companys financial statements. In addition,
alternatives can exist among various accounting methods. In such cases, the choice of accounting
method can have a significant impact on reported amounts.
Basic earnings (loss) per share are computed by dividing net income or loss by the weighted
average number of common shares outstanding for the period. Diluted earnings (loss) per share
reflect the potential dilution that could occur if unvested restricted stock awards became totally
vested, calculated using the treasury stock method. Potential common shares in the diluted loss per
share are excluded for the periods presented as their effect would be anti-dilutive. A
reconciliation of net income (loss) and weighted average shares used in computing basic and diluted
net income (loss) per share is as follows for the three and six months ended June 30 (in thousands,
except share and per share amounts):
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
Six months ended June 30, |
|
|
|
2009 |
|
2008 |
|
2009 |
|
2008 |
|
Net loss |
|
$ |
(11,806 |
) |
|
$ |
(5,862 |
) |
|
$ |
(49,899 |
) |
|
$ |
(6,385 |
) |
|
|
|
|
|
|
|
|
|
Weighted average shares - basic |
|
|
74,696,028 |
|
|
|
69,198,767 |
|
|
|
75,986,262 |
|
|
|
64,190,725 |
|
Dilutive effect of unvested stock grants |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
Dilutive effect of warrants |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
Weighted average shares - dilutive |
|
|
74,696,028 |
|
|
|
69,198,767 |
|
|
|
75,986,262 |
|
|
|
64,190,725 |
|
|
|
|
|
|
|
|
|
|
Basic loss per share |
|
$ |
(0.16 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
Diluted loss per share |
|
$ |
(0.16 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.66 |
) |
|
$ |
(0.10 |
) |
|
|
|
|
|
|
|
|
|
The Company evaluates events and transactions that occur after the balance sheet
date but before the financial statements are issued. The Company evaluated such events and
transactions through August 6, 2009 when the financial statements were filed electronically with
the Securities and Exchange Commission.
6. |
|
New Accounting Pronouncements |
In December 2007, the FASB issued SFAS No. 141 (Revised), Business Combinations (SFAS
141(R)), which significantly changes the financial accounting and reporting of business
combination transactions. SFAS 141(R) establishes principles and requirements for how an acquirer
in a business combination: (i) recognizes and measures in its financial statements the identifiable
assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree, (ii)
recognizes and measures the goodwill acquired in the business combination or a gain from a bargain
purchase, and (iii) determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business combination. The Company
adopted SFAS 141(R) on January 1, 2009. The adoption of this pronouncement will have an impact on
the accounting for any future acquisitions.
In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated
Financial Statementsan amendment of ARB No. 51 (SFAS 160). This statement amends ARB No. 51
to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and
for the deconsolidation of a subsidiary. SFAS 160 clarifies that a noncontrolling interest in a
subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the
consolidated entity that should be reported as a component of equity in the consolidated financial
statements. Among other requirements, SFAS 160 requires consolidated net income to be reported at
amounts that include the amounts attributable to both the parent and the noncontrolling interest.
It also requires disclosure, on the face of the consolidated income statement, of the amounts of
consolidated net income attributable to the parent and to the noncontrolling interest. The Company
adopted SFAS 160 on January 1, 2009. The adoption of this pronouncement did not impact the
Companys financial position or results of operations.
In March 2008, the FASB issued SFAS No. 161, Disclosures about Derivative Instruments and
Hedging Activities an amendment of FASB Statement No. 133 (SFAS 161). This statement changes
the disclosure requirements for derivative instruments and hedging activities. Among other
requirements, SFAS 161 requires enhanced disclosures about (i) how and why an entity uses
derivative instruments, (ii) how derivative instruments and related hedged items are accounted for
under Statement 133 and its related interpretations, and (iii) how derivative instruments and
related hedged items affect an entitys financial position, financial performance, and cash flows.
The Company adopted SFAS 161 on January 1, 2009. See Note G for enhanced disclosures about the
Companys derivative instruments.
In April 2009, the FASB issued FASB Staff Position (FSP) SFAS No. 107-1 and Accounting
Principles Board (APB) Opinion No. 28-1, Interim Disclosures about Fair Value of Financial
Instruments, which requires quarterly disclosure of information about the fair value of financial
instruments within the scope of SFAS No. 107, Disclosures about Fair Value of Financial
Instruments. FSP SFAS 107-1 and APB 28-1 was adopted effective for the second quarter of 2009 and
did not impact the Companys financial position or results of operations.
In May 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS 165), which establishes
general standards of accounting for and disclosure of events that occur after the balance sheet
date, but before the financial statements are issued or available to be issued. SFAS 165 is
effective for fiscal years and interim periods after June 15, 2009. The Company adopted this
standard in the second quarter of 2009. The adoption of this pronouncement did not impact the
Companys financial position or results of operations.
In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and
the Hierarchy of
7
Generally Accepted Accounting Principles (SFAS 168). SFAS 168 replaces FASB Statement No.
162, The Hierarchy of Generally Accepted Accounting Principles, and establishes the FASB
Accounting Standards Codification TM (the Codification) as the source of authoritative
accounting principles recognized by the FASB to be applied by nongovernmental entities in the
preparation of financial statements in conformity with generally accepted accounting principles
(GAAP). SFAS 168 is effective for interim and annual periods ending after September 15, 2009.
The Company will begin to use the Codification when referring to GAAP in the third quarter of 2009.
As the Codification was not intended to change or alter existing GAAP, it will not have any impact
on our financial position or results of operations.
On December 31, 2008, the Securities and Exchange Commission (SEC) issued Release No.
33-8995, Modernization of Oil and Gas Reporting, which revises disclosure requirements for oil
and gas companies. In addition to changing the definition and disclosure requirements for oil and
gas reserves, the new rules change the requirements for determining oil and gas reserve quantities.
These rules permit the use of new technologies to determine proved reserves under certain criteria
and allow companies to disclose their probable and possible reserves. The new rules also require
companies to report the independence and qualifications of their reserves preparer or auditor and
file reports when a third party is relied upon to prepare reserves estimates or conducts a reserves
audit. The new rules also require that oil and gas reserves be reported and the full cost ceiling
limitation be calculated using a twelve-month average price rather than period-end prices. The new
rule is effective for annual reports on Form 10-K for fiscal years ending on or after December 31,
2009. The new rules may not be applied to quarterly reports prior to the first annual report in
which the revised disclosures are required. The Company plans to implement the new requirements in
its Annual Report on Form 10-K for the year ending December 31, 2009. The Company is currently
evaluating the impact of this new rule on its consolidated financial statements and related
disclosures.
|
|
|
B |
|
PROPERTIES AND EQUIPMENT |
Under the full cost method of accounting, the net book value of oil and natural gas
properties, less related deferred income taxes, may not exceed the estimated after-tax future net
revenues from proved oil and natural gas properties, discounted at 10% (the Ceiling Limitation).
In arriving at estimated future net revenues, estimated lease operating expenses, development
costs, and certain production-related and ad valorem taxes are deducted. In calculating future net
revenues, prices and costs in effect at the time of the calculation are held constant indefinitely,
except for changes that are fixed and determinable by existing contracts. The net book value is
compared to the Ceiling Limitation on a quarterly and yearly basis. The excess, if any, of the net
book value above the Ceiling Limitation is charged to expense in the period in which it occurs and
is not subsequently reinstated. At March 31, 2009, the net book value of the Companys oil and
natural gas properties exceeded the Ceiling Limitation resulting in a reduction in the carrying
value of the Companys oil and natural gas properties of $58.9 million. The after-tax effect of
this reduction was $37.5 million. At June 30, 2009 the net book value of the Companys oil and
natural gas properties did not exceed the Ceiling Limitation.
Long-term debt consists of the following (in thousands):
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
2009 |
|
2008 |
Credit facility |
|
$ |
255,430 |
|
|
$ |
250,387 |
|
Installment loan agreements |
|
|
229 |
|
|
|
309 |
|
|
|
|
|
|
|
|
|
255,659 |
|
|
|
250,696 |
|
Less amount due within one year |
|
|
145 |
|
|
|
160 |
|
|
|
|
|
|
|
|
$ |
255,514 |
|
|
$ |
250,536 |
|
|
|
|
|
|
Credit Facility
In November 2007, in conjunction with the Companys Ascent acquisition, the Company entered
into a new $500.0 million credit facility with Guggenheim Corporate Funding, LLC, for itself and on
behalf of other institutional lenders. The facility includes a $250.0 million revolving credit
facility and a $200.0 million term loan facility and an additional $50.0 million available under
the term loan as requested by the Company and approved by the lenders. The initial amount of the
$200.0 million term loan was advanced at closing. The borrowing base under the revolving credit
facility initially was set at $175.0 million, a portion of which was advanced at the closing of the
Ascent acquisition. Borrowings under the facility were used to refinance
8
RAM Energys existing
indebtedness, fund the cash requirements in connection with the closing of the Ascent acquisition,
and for working capital and other general corporate purposes. Funds advanced under the revolving
credit facility may be paid down and re-borrowed during the four-year term of the revolver, and
initially bore interest at LIBOR plus a margin ranging from 1.25% to 2.0% based on a percentage of
usage. The term loan provides for payments of interest only during its five-year term,
with the initial interest rate being LIBOR plus 7.5%. The $175.0 million borrowing base under
the revolver was reaffirmed in April 2009.
Advances under the facility are secured by liens on substantially all properties and assets of
the Company and its subsidiaries. The loan agreement contains representations, warranties and
covenants customary in transactions of this nature, including financial covenants relating to
current ratio, minimum interest coverage ratio, maximum leverage ratio and a required ratio of
asset value to total indebtedness. The Company is required to maintain commodity hedges with
respect to not less than 50%, but not more than 85%, of the Companys projected monthly production
volumes on a rolling 30-month basis, until the leverage ratio is less than or equal to 2.0 to 1.0.
During May 2008, the Company reduced its outstanding balance on the term facility by $86.6 million
out of the net proceeds received by the Company upon the exercise of 17,617,331 warrants to acquire
the Companys common stock. See Note D.
On June 26, 2009, the Company entered into the Second Amendment to the credit facility. The
Second Amendment amends certain definitions and certain financial and negative covenant terms
providing greater flexibility for the Company through the remaining term of the facility.
Additionally, the Second Amendment increased the interest rates applicable to borrowings under both
the revolver and the term loan. Advances under the revolver will bear interest at LIBOR, with a
minimum LIBOR rate, or floor, of 1.5%, plus a margin ranging from 2.25% to 3.0% based on a
percentage of usage. The term loan will bear interest at LIBOR, also with a floor of 1.5%, plus a
margin of 8.5%, and an additional 2.75% of payment-in-kind interest that will be added to the term
loan principal balance on a monthly basis and paid at maturity. The Company was in compliance with
all of the financial covenants under the credit facility at June 30, 2009. At June 30, 2009,
$142.0 million was outstanding under the revolving credit facility and $113.4 million was
outstanding under the term facility.
The Company had outstanding warrants to purchase 18,848,800 shares of its common stock at an
exercise price of $5.00 per share, of which 17,617,331 were exercised prior to the May 12, 2008
expiration date, resulting in net proceeds to the Company of $86.6 million. Proceeds of the
exercise were used to pay down the term loan portion of the Companys credit facility. The
remaining 1,231,469 warrants expired and are no longer outstanding.
The Company had outstanding options to purchase up to 275,000 units at any time on or prior to
May 11, 2009 at an exercise price of $9.90 per unit, with each unit consisting of one share of the
Companys common stock and two warrants. All of the unit purchase options expired unexercised.
|
|
|
E |
|
COMMITMENTS AND CONTINGENCIES |
Sacket v. Great Plains Pipeline Company, et al. In April 2002, a lawsuit was filed in
the District Court for Woods County, Oklahoma against RAM Energy, Inc., certain of its subsidiaries
and various other individuals and unrelated companies, by a lessor of certain oil and gas leases
from which production was sold to a gathering system owned and operated by Magic Circle Energy
Corporation (Magic Circle) or its wholly-owned subsidiary, Carmen Field Limited Partnership (CFLP).
The lawsuit was filed as a class action on behalf of all royalty owners under leases owned by any
of the defendants during the period Magic Circle or CFLP owned and operated the gathering system.
The petition claimed that additional royalties were due because Magic Circle and CFLP resold oil
and gas purchased at the wellhead for an amount in excess of the price upon which royalty payments
were based and paid no royalties on natural gas liquids extracted from the gas at plants downstream
of the system. Other allegations included under-measurement of oil and gas at the wellhead by Magic
Circle and CFLP, failure to pay royalties on take or pay settlement proceeds, failure to properly
report deductions for post-production costs in accordance with Oklahomas check stub law and
related tort and contract claims.
On September 18, 2008, RAM Energy, together with the other defendants in the lawsuit, entered
into a settlement agreement with the plaintiff, individually and as representative of the putative
class, pursuant to which the defendants agreed to pay an aggregate $25.0 million in settlement of
the lawsuit. RAM Energy and its subsidiaries agreed to pay $16.0 million of the settlement amount,
with the unrelated third party defendants paying the remaining $9.0 million. On March 5, 2009,
following a hearing at which the Court received evidence concerning the fairness of the proposed
settlement to the plaintiff class, the Court entered an order approving the settlement and the
related plan of allocation and distribution of the settlement fund. The judgment became final on
April 6, 2009 and the settlement proceeds were thereafter distributed in accordance with the plan
of allocation and distribution.
9
In conjunction with the Companys May 8, 2006 acquisition of RAM Energy, the former
stockholders of RAM Energy deposited in escrow 3,200,000 shares of the Companys common stock to
secure their potential indemnity obligations to the Company, including any loss the Company might
sustain in the Sacket litigation. Pursuant to the terms of the escrow agreement,
at such time as a claim against the escrow matured for payment, the former stockholders of RAM
Energy had the option of substituting cash for all or a portion of their escrowed shares, based on
the average closing price of the Company common stock for the ten trading days ending on the last
trading day prior to the date the Companys indemnity claim against the escrow was paid (defined as
Fair Market Value), in which event the escrowed shares for which cash was substituted should be
delivered to the stockholders and the cash paid to the Company out of escrow. On April 7, 2009,
the Company made a claim against the escrow for all of the escrowed shares. Also on April 7, 2009,
the former stockholders of RAM Energy notified the escrow agent that they would substitute cash, at
a Fair Market Value of $0.74 per share, for a total of 316,190 shares of their Company common stock
held in escrow.
On April 8, 2009, the escrow agent initiated the transfer to the Company, in satisfaction of
the indemnification obligation of the former RAM stockholders, of a total of 2,883,810 shares of
Company common stock and $0.2 million in cash, less the fees and expenses of the escrow agent. The
shares of common stock received by the Company were recorded as treasury shares.
During 2008, the Company recorded a contingent liability of $16.0 million for its share of the
settlement amount and a receivable of $2.8 million in other current assets representing the value
of the escrowed shares based on the closing price of $0.88 per share on December 31, 2008. The
Company also recorded a charge to other expense of $13.2 million for the difference between the
settlement liability and the value of the escrowed shares. During the first quarter of 2009, the
Company recorded a charge to other expense of $0.4 million and adjusted the receivable from $2.8
million to $2.4 million to adjust the Fair Market Value of the escrowed shares to reflect the final
settlement due of $0.74 per share.
Rathborne Land Company, et al., v. Ascent Energy Inc., et al. Ascent Energy Inc. and
its Ascent Energy Louisiana, LLC subsidiary were sued for lease cancellation and damages for
failure to explore and develop the plaintiffs lease. By Opinion dated December 31, 2008, the
court found in favor of the plaintiff and against the defendants. On June 1, 2009, the court
entered judgment against the defendants in the amount of $4.6 million and shortly thereafter the
Company filed an appeal with the United States Court of Appeals for the Fifth Circuit. The Company
also filed a motion to stay the judgment pending final disposition on appeal and to permit the
posting of a cash bond as security for the stay, which motion was granted by the court.
In conjunction with the Companys November 29, 2007 acquisition of Ascent, the former
stockholders and note holders of Ascent deposited $20.0 million in escrow to secure their
obligation to indemnify the Company with respect to certain liabilities and obligations of Ascent,
including any loss, cost, liability or expense incurred by the Company in connection with this and
other pending litigation, subject to a sharing arrangement. After giving effect to such sharing
arrangement with respect to previously settled litigation, the Company and the former Ascent owners
will share equally the first $1.8 million of any losses attributable to this lawsuit and the former
Ascent owners, out of the escrow, will bear the remaining portion of any loss so incurred, up to
the remaining balance in the escrow fund. On June 18, 2009, the defendants arranged for the
posting of a cash security bond with the registry of the trial court in the amount of $5.5 million,
being 120% of the amount of the judgment, as required by court rule. By agreement with the
representative of the former Ascent stockholders and note holders, the Company posted the sum of
$0.9 million toward the security deposit and the remaining sum of $4.6 million was posted out of
the escrow fund. All remaining funds in the escrow account, less the sum of approximately $0.2 million
(which was retained in the escrow account to cover additional and incidental fees and expenses
related to the Rathborne litigation), were distributed to the Ascent stockholders and note holders
per the terms of the escrow agreement. During the fourth quarter of 2008, the Company recorded a
contingent liability of $0.9 million related to this litigation.
The Company is also involved in other legal proceedings and litigation in the ordinary course
of business. In the opinion of management, the outcome of such matters will not have a material
adverse effect on the Companys financial position or results of operations.
|
|
|
F |
|
FAIR VALUE MEASUREMENTS |
Effective January 1, 2008, the Company prospectively adopted the provisions of SFAS No. 157
Fair Value Measurements (SFAS 157) for financial assets and financial liabilities reported or
disclosed at fair value.
SFAS 157 refines the definition of fair value, provides a framework for measuring fair value
and expands disclosures about fair value measurements. SFAS 157 establishes a fair value hierarchy
that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy
assigns the highest priority to unadjusted quoted prices in active markets for identical assets or
liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3). Level 2
measurements are inputs that
10
are observable for assets or liabilities, either directly or
indirectly, other than quoted prices included within Level 1. As of June 30, 2009, the fair value
measurement of the Companys net derivative assets was $1.3 million, based on Level 2 criteria.
See Note G.
At June 30, 2009, the carrying value of cash, receivables and payables reflected in our
financials approximates fair value due to their short-term nature. Additionally, the carrying
value of our long-term debt, under the credit facility, approximates fair value because the credit
facility carries a variable interest rate based on market interest rates. See Note C for
discussion of long-term debt.
The Company periodically utilizes various hedging strategies to manage the price received for
a portion of its future oil and natural gas production to reduce exposure to fluctuations in oil
and natural gas prices and to achieve a more predictable cash flow.
During 2009 and 2008, the Company entered into numerous derivative contracts to manage the
impact of oil and natural gas price fluctuations and as required by the terms of its credit
facility.
The Company did not designate these transactions as hedges as required by SFAS No. 133 in
order to receive hedge accounting treatment. Accordingly, all gains and losses on the derivative
instruments during 2009 and 2008 have been recorded in the statements of operations.
The Companys derivative positions at June 30, 2009, consisting of put/call collars and put
options, also called bare floors as they provide a floor price without a corresponding ceiling,
are shown in the following table:
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil (Bbls) |
|
Natural Gas (MMbtu) |
|
|
Floors |
|
Ceilings |
|
Floors |
|
Ceilings |
|
|
per day |
|
Price |
|
per day |
|
Price |
|
per day |
|
Price |
|
per day |
|
Price |
Collars |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
|
1,334 |
|
$ |
60.00 |
|
|
1,334 |
|
$ |
79.59 |
|
|
10,995 |
|
$ |
4.55 |
|
|
10,995 |
|
$ |
10.12 |
2010 |
|
|
1,503 |
|
$ |
53.74 |
|
|
1,503 |
|
$ |
80.57 |
|
|
5,288 |
|
$ |
5.00 |
|
|
5,288 |
|
|
$9.23 |
|
|
|
Bare Floors |
|
|
|
Bare Floors |
|
|
Year |
|
per day |
|
Price |
|
|
|
|
|
per day |
|
Price |
|
|
|
|
2009 |
|
|
1,666 |
|
$ |
69.00 |
|
|
|
|
|
|
|
|
- |
|
|
- |
|
|
|
|
|
|
2010 |
|
|
1,121 |
|
$ |
64.84 |
|
|
|
|
|
|
|
|
4,616 |
|
$ |
4.36 |
|
|
|
|
|
|
Both crude oil and natural gas floors and ceilings for 2009 cover July through December.
Crude oil bare floors for 2009 cover July through December. Crude oil floors and ceilings for 2010
cover January through December, and crude oil bare floors for 2010 cover January through March and
July through December. Natural gas floors and ceilings for 2010 cover January through June and
November and December, and natural gas bare floors for 2010 cover April through October.
The Company estimates the fair value of its derivative instruments based on published forward
commodity price curves as of the date of the estimate, less discounts to recognize present values.
For the year ended December 31, 2008 and subsequent periods, the Company estimated the fair value
of its derivatives using a pricing model which also considered market volatility, counterparty
credit risk and additional criteria in determining discount rates. See Note F. For the year ended
December 31, 2008 and subsequent periods the discount rate used in the discounted cash flow
projections was based on published LIBOR rates, Eurodollar futures rates and interest swap rates.
The counterparty credit risk was determined by calculating the difference between the derivative
counterpartys bond rate and published bond rates.
Gross fair values of our derivative instruments, prior to netting of assets and liabilities
subject to a master netting arrangement, as of June 30, 2009 and the consolidated statements of
operations for the three and six months ended June 30, 2009 and 2008 are as follows (in thousands):
11
CONSOLIDATED BALANCE SHEETS
|
|
|
|
|
|
|
|
|
|
|
Fair Value |
|
|
|
|
|
As of |
|
|
|
|
|
June 30, |
|
Gross Assets and Liabilities |
|
Balance Sheet Location |
|
2009 |
Current Assets Derivative assets |
|
Current Assets - Derivative assets |
|
$ |
4,592 |
|
Other Assets Derivative assets |
|
Long-Term Liabilities - Derivative liabilities |
|
|
557 |
|
Current Liabilities Derivative liabilities |
|
Current Assets - Derivative assets |
|
|
(1,541 |
) |
Long-Term Liabilities Derivative liabilities |
|
Long-Term Liabilities - Derivative liabilities |
|
|
(2,289 |
) |
|
|
|
|
|
Total Derivatives Not Designated as
Hedging Instruments |
|
|
|
$ |
1,319 |
|
|
|
|
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
Location |
|
2009 |
|
2008 |
|
2009 |
|
2008 |
Revenue Unrealized losses on derivatives |
|
$ |
(23,795 |
) |
|
$ |
(33,808 |
) |
|
$ |
(24,802 |
) |
|
$ |
(39,067 |
) |
Revenue Realized gains (losses) on derivatives |
|
$ |
10,671 |
|
|
$ |
(7,218 |
) |
|
$ |
18,549 |
|
|
$ |
(9,536 |
) |
H SHARE-BASED COMPENSATION
The Company accounts for share-based payment accruals under SFAS No. 123R, Share-Based
Payments (SFAS No. 123R). SFAS No. 123R requires all share-based payments to employees,
including grants of employee stock options, to be recognized in the financial statements based on
their fair values. The Company adopted the provisions of SFAS No. 123R effective January 1, 2006.
On May 8, 2006, the Companys stockholders approved its 2006 Long-Term Incentive Plan (the
Plan). The Company reserved a maximum of 2,400,000 shares of its common stock for issuances under
the Plan. The Plan includes a provision that, at the request of a grantee, the Company may
repurchase shares to satisfy the grantees federal and state income tax withholding requirements.
All repurchased shares will be held by the Company as treasury stock. On May 8, 2008, the Plan was
amended to increase the maximum authorized number of shares to be issued under the Plan from
2,400,000 to 6,000,000. As of June 30, 2009, a maximum of 2,534,426 shares of common stock
remained reserved for issuance under the Plan.
As of June 30, 2009, the Company had $5.5 million of unrecognized compensation cost related to
non-vested, share-based compensation awards granted under the Plan. That cost is expected to be
recognized over a weighted-average period of three years. The related compensation expense
recognized during the three and six months ended June 30, 2009 was $0.6 million and $1.1 million,
respectively, and during the three and six months ended June 30, 2008 was $0.9 million and $1.5
million, respectively.
12
ITEM 2 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
BUSINESS
General
We are an independent oil and natural gas company engaged in the acquisition, development,
exploitation, exploration and production of oil and natural gas properties, primarily in Texas,
Oklahoma, Louisiana, and West Virginia. Our producing properties are located in highly prolific
basins with long histories of oil and natural gas operations.
Principal Properties
Our oil and natural gas assets are characterized by a combination of conventional and
unconventional reserves and prospects. We have conventional reserves and production in three main
onshore locations:
|
|
|
South TexasStarr, Wharton and Duval Counties, Texas (Developing Fields); |
|
|
|
|
Electra/BurkburnettWichita and Wilbarger Counties, Texas (Mature Oil Fields); and |
|
|
|
|
Pontotoc County, Oklahoma (Mature Oil Field). |
Our unconventional reserves and prospects are primarily shale plays in the following areas:
|
|
|
North Texas Barnett ShaleJack and Wise Counties, Texas. This is our Tier 1 Barnett shale
acreage where we own interests in approximately 27,018 gross (6,594 net) acres (Developing Field); |
|
|
|
|
Appalachian Devonian ShaleCabell and Mason Counties, West Virginia. We own leasehold
interests in approximately 60,969 gross (49,756 net) acres (Developing Field); and |
|
|
|
|
North Texas Barnett ShaleBosque and Hamilton Counties, Texas. We own interests in
approximately 8,963 gross (7,187 net) acres in this emerging Tier 2 region of the North Texas
Barnett shale play (Developing Field). |
13
Net Production, Unit Prices and Costs
The following table presents certain information with respect to our oil and natural gas
production, and prices and costs attributable to all oil and natural gas properties owned by us,
for the three and six months ended June 30, 2009. Average realized prices reflect the actual
realized prices received by us, before and after giving effect to the results of our derivative
contract settlements. Our derivative activities are financial, and our production of oil, natural
gas liquids, or NGLs, and natural gas, and the average realized prices we receive from our
production, are not affected by our derivative arrangements.
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, 2009 |
|
|
June 30, 2009 |
|
Production volumes: |
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
290 |
|
|
|
580 |
|
NGLs (MBbls) |
|
|
96 |
|
|
|
199 |
|
Natural gas (MMcf) |
|
|
1,603 |
|
|
|
3,170 |
|
Total (Mboe) |
|
|
652 |
|
|
|
1,308 |
|
|
|
|
|
|
|
|
|
|
Average sale prices received: |
|
|
|
|
|
|
|
|
Oil (per Bbl) |
|
|
$55.98 |
|
|
|
$47.35 |
|
NGLs (per Bbl) |
|
|
$24.96 |
|
|
|
$20.74 |
|
Natural gas (per Mcf) |
|
|
$3.06 |
|
|
|
$3.46 |
|
Total per Boe |
|
|
$36.03 |
|
|
|
$32.54 |
|
|
|
|
|
|
|
|
|
|
Cash effect of derivative contracts: |
|
|
|
|
|
|
|
|
Oil (per Bbl) |
|
|
$6.19 |
|
|
|
$10.59 |
|
NGLs (per Bbl) |
|
|
$0.00 |
|
|
|
$0.00 |
|
Natural gas (per Mcf) |
|
|
$5.54 |
|
|
|
$3.91 |
|
Total per Boe |
|
|
$16.37 |
|
|
|
$14.18 |
|
|
|
|
|
|
|
|
|
|
Average prices computed after cash effect
of settlement of derivative contracts: |
|
|
|
|
|
|
|
|
Oil (per Bbl) |
|
|
$62.17 |
|
|
|
$57.94 |
|
NGLs (per Bbl) |
|
|
$24.96 |
|
|
|
$20.74 |
|
Natural gas (per Mcf) |
|
|
$8.60 |
|
|
|
$7.37 |
|
Total per Boe |
|
|
$52.40 |
|
|
|
$46.72 |
|
|
|
|
|
|
|
|
|
|
Cash expenses (per Boe): |
|
|
|
|
|
|
|
|
Oil and natural gas production taxes |
|
|
$1.42 |
|
|
|
$1.38 |
|
Oil and natural gas production expenses |
|
|
$13.99 |
|
|
|
$14.68 |
|
General and administrative |
|
|
$5.74 |
|
|
|
$6.19 |
|
Cash interest |
|
|
$5.12 |
|
|
|
$5.19 |
|
Cash taxes |
|
|
$0.19 |
|
|
|
$0.21 |
|
|
|
|
|
|
|
|
Total per Boe |
|
|
$26.46 |
|
|
|
$27.65 |
|
|
|
|
|
|
|
|
|
|
Cash flow per Boe |
|
|
$25.94 |
|
|
|
$19.07 |
|
|
|
|
|
|
|
|
|
|
14
Acquisition, Development and Exploration Capital Expenditures
The following table presents information regarding our net costs incurred in our acquisitions
of proved and unproved properties, and our development and exploration activities during the three
and six months ended June 30, 2009 (in thousands):
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
Six months ended |
|
|
|
June 30, 2009 |
|
June 30, 2009 |
|
|
|
|
|
|
|
|
|
Development and exploratory costs |
|
$ |
4,317 |
|
|
$ |
16,779 |
|
Proved property acquisition costs |
|
|
171 |
|
|
|
967 |
|
Unproved property acquisition costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total costs incurred |
|
$ |
4,488 |
|
|
$ |
17,746 |
|
|
|
|
|
|
During the quarter ended June 30, 2009, we participated in the drilling of six gross (six net)
development wells. All wells were completed and capable of commercial production. In addition, we
finalized the completion of two gross (two net) wells drilled in the previous period. Two gross
(0.2 net) wells drilled during the first quarter were waiting on completion at June 30, 2009.
Recompletion activities accounted for approximately $2.0 million of our development costs during
the quarter.
Results of Operations
Quarter Ended June 30, 2009 Compared to Quarter Ended June 30, 2008
Oil and natural gas sales decreased $34.1 million, or 59%, to $23.5 million for the three
months ended June 30, 2009 as compared to $57.6 million for the same period in 2008. This decrease
was driven by commodity price decreases, which decreased 60% for the three months ended June 30,
2009 as compared to the same period last year. Production volumes improved 1% as compared to the
same period last year. The increase is due to production volumes from wells drilled and recompleted
since the quarter ended June 30, 2008.
The following table summarizes our oil and natural gas production volumes, average sales
prices (without regard to derivative contract settlements) and period to period comparisons for the
periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mature |
|
|
Mature |
|
|
|
|
|
|
Developing Fields |
|
Oil Fields* |
|
Natural Gas Fields |
|
|
Three Months Ended June 30, 2009 |
|
South Texas |
|
|
Barnett Shale |
|
|
Appalachia |
|
|
Various |
|
Various |
|
Total |
|
|
|
|
|
|
|
|
|
Aggregate Net Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
14 |
|
|
|
2 |
|
|
|
1 |
|
|
|
242 |
|
|
|
31 |
|
|
|
290 |
|
NGLs (MBbls) |
|
|
28 |
|
|
|
27 |
|
|
|
|
|
|
|
22 |
|
|
|
19 |
|
|
|
96 |
|
Natural Gas (MMcf) |
|
|
502 |
|
|
|
171 |
|
|
|
22 |
|
|
|
277 |
|
|
|
631 |
|
|
|
1,603 |
|
|
|
|
|
|
|
|
|
|
|
|
|
MBoe |
|
|
125 |
|
|
|
57 |
|
|
|
4 |
|
|
|
310 |
|
|
|
156 |
|
|
|
652 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June
30, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Net Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
11 |
|
|
|
1 |
|
|
|
|
|
|
|
237 |
|
|
|
51 |
|
|
|
300 |
|
NGLs (MBbls) |
|
|
32 |
|
|
|
14 |
|
|
|
|
|
|
|
22 |
|
|
|
18 |
|
|
|
86 |
|
Natural Gas (MMcf) |
|
|
704 |
|
|
|
78 |
|
|
|
5 |
|
|
|
187 |
|
|
|
570 |
|
|
|
1,544 |
|
|
|
|
|
|
|
|
|
|
MBoe |
|
|
161 |
|
|
|
27 |
|
|
|
1 |
|
|
|
290 |
|
|
|
165 |
|
|
|
644 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in MBoe |
|
|
(36 |
) |
|
|
30 |
|
|
|
3 |
|
|
|
20 |
|
|
|
(9 |
) |
|
|
8 |
|
Percentage Change in MBoe |
|
|
-22.4 |
% |
|
|
111.1 |
% |
|
|
300.0 |
% |
|
|
6.9 |
% |
|
|
-5.5 |
% |
|
|
1.2 |
% |
* Includes Electra/Burkburnett, Allen/Fitts and Layton fields.
15
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
|
|
|
June 30, |
|
|
|
|
2009 |
|
2008 |
|
Decrease |
|
|
|
|
|
|
|
|
|
|
|
|
|
Average sale prices: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
|
$ |
55.98 |
|
|
$ |
123.15 |
|
|
|
-54.5 |
% |
NGL (per Bbl) |
|
$ |
24.96 |
|
|
|
$60.58 |
|
|
|
-58.8 |
% |
Natural gas (per Mcf) |
|
|
$3.06 |
|
|
|
$9.94 |
|
|
|
-69.2 |
% |
Per Boe |
|
$ |
36.03 |
|
|
|
$89.39 |
|
|
|
-59.7 |
% |
We were successful in increasing production levels by 1% although capital expenditures were
less than the same period last year. During the second quarter of 2009, we elected not to
aggressively drill for natural gas due to low commodity prices. The production growth from our
mature oil fields and Barnett Shale leasehold totaled 50 MBoe and offset the decline in production
volumes in our developing fields of South Texas and other mature natural gas fields. Production
from our natural gas fields reflected typical reserve depletion absent new drilling. All of the
six gross (six net) wells drilled during the second quarter were oil wells.
The average realized sales prices decreased substantially for the three months ended June 30,
2009 as compared to the same period in 2008. The average realized sales price for oil was $55.98
per barrel for the three months ended June 30, 2009, a decrease of 55%, compared to $123.15 per
barrel for the same period in 2008. The average realized sales price for NGLs was $24.96 for the
three months ended June 30, 2009, a decrease of 59%, compared to $60.58 per barrel for the same
period in 2008. The average realized sales price for natural gas was $3.06 per Mcf for the three
months ended June 30, 2009, a decrease of 69%, compared to $9.94 per Mcf for the same period in
2008.
Realized and Unrealized Gain (Loss) from Derivatives. For the quarter ended June 30, 2009, our
loss from derivatives was $13.1 million, compared to a loss of $41.0 million for the quarter ended
June 30, 2008. Our gains and losses during these periods were the net result of recording actual
contract settlements, the premiums for our derivative contracts, and unrealized losses attributable
to mark-to-market values of our derivative contracts at the end of the periods. Contributing to the
increase in realized gains in the 2009 period was the sale of natural gas contracts during the
second quarter of 2009.
|
|
|
|
|
|
|
|
|
|
|
Three months ended June 30, |
|
|
|
2009 |
|
2008 |
|
|
|
(in thousands) |
|
Contract settlements and premium costs: |
|
|
|
|
|
|
|
|
Oil |
|
$ |
1,795 |
|
|
$ |
(5,825 |
) |
Natural gas |
|
|
8,876 |
|
|
|
(1,393 |
) |
|
|
|
|
|
Realized gains (losses) |
|
|
10,671 |
|
|
|
(7,218 |
) |
Mark-to-market losses: |
|
|
|
|
|
|
|
|
Oil |
|
|
(14,114 |
) |
|
|
(28,264 |
) |
Natural gas |
|
|
(9,681 |
) |
|
|
(5,544 |
) |
|
|
|
|
|
Unrealized losses |
|
|
(23,795 |
) |
|
|
(33,808 |
) |
|
|
|
|
|
Realized and unrealized gains (losses) |
|
$ |
(13,124 |
) |
|
$ |
(41,026 |
) |
|
|
|
|
|
Oil and Natural Gas Production Taxes. Our oil and natural gas production taxes were $0.9
million for the quarter ended June 30, 2009, compared to $3.3 million for the comparable quarter of
the previous year. Production taxes vary by state. Most are based on realized prices at the
wellhead, while Louisiana production taxes are based on volumes for natural gas and values for oil.
As revenues or volumes from oil and natural gas sales increase or decrease, production taxes on
these sales also increase or decrease directly. The decrease was due to a significant reduction in
oil and natural gas revenues for the quarter ended June 30, 2009 compared to the same period during
2008. Additionally, retroactive severance tax refunds were granted during the second quarter of
2009. As a percentage of oil and natural gas sales, our oil and natural gas production taxes
decreased to 3.9% for the quarter ended June 30, 2009, as compared to 5.8% for the quarter ended
June 30, 2008.
Oil and Natural Gas Production Expense. Our oil and natural gas production expense was $9.1
million for the quarter ended June 30, 2009, a decrease of $0.4 million, or 4%, from the $9.5
million for the quarter ended June 30, 2008. The decrease was due primarily to decreased utilities
and well service costs, which were partially offset by workover costs of a non-recurring nature.
For the quarter ended June 30, 2009, our oil and natural gas production expense was $13.99 per Boe
compared to $14.69 per Boe for the quarter ended June 30, 2008, a decrease of 5%. As a percentage
of oil and natural gas sales, oil and natural gas production expense was 39% for the quarter ended
June 30, 2009, as compared to 16% for the quarter ended June 30, 2008. This increase results from a
significant drop in average sales prices per Boe, from $89.39 in 2008 to $36.03 in 2009, a 60%
decrease.
Amortization and Depreciation Expense. Our amortization and depreciation expense decreased
$3.6 million, or 32%,
16
for the quarter ended June 30, 2009, compared to the quarter ended June 30,
2008. On an equivalent basis, our amortization of the full-cost pool of $7.3 million was $11.21 per
Boe for the quarter ended June 30, 2009, a decrease per Boe of 34% compared to $11.0 million, or
$17.02 per Boe for the quarter ended June 30, 2008. This rate decrease per Boe resulted from lower
capitalized costs subsequent to the asset impairment writedowns in the fourth quarter of 2008
and the first quarter of 2009. The rate decrease was partially offset by a rate increase resulting
from a decrease in our net quantities of proved reserves of oil and natural gas.
Accretion Expense. SFAS No. 143, Accounting for Asset Retirement Obligations, includes, among
other things, the reporting of the fair value of asset retirement obligations. Accretion expense
is a function of changes in fair value from period-to-period. We recorded $0.5 million for the
quarter ended June 30, 2009, unchanged from the quarter ended June 30, 2008.
Share-Based Compensation. From time to time, our Board of Directors grants restricted stock
awards under our 2006 Long-Term Incentive Plan. Each of these grants vests in equal increments over
the vesting period provided for the particular award. All currently unvested awards provide for
vesting periods of from one to five years. The share-based compensation expense attributable to
these grants is calculated using the closing price per share on each of the grant dates and will be
recognized over their respective vesting periods. For the quarter ended June 30, 2009, we
recognized a total of $0.6 million share-based compensation expense, compared to $0.9 million from
the quarter ended June 30, 2008. This decrease is primarily a result of the accelerated vesting of
restricted stock grants to John Cox, our Senior Vice President, who passed away in March 2008.
General and Administrative Expense. For the quarter ended June 30, 2009, our general and
administrative expense was $3.7 million, compared to $5.5 million for the quarter ended June 30,
2008, a decrease of $1.8 million, or 32%. The decrease results from lower employee related costs,
primarily due to a reduction of estimated bonuses, as well as lower professional fees in the 2009
period.
Interest Expense. We recorded interest expense of $3.6 million for the quarter ended June 30,
2009 as compared to $6.2 million for the second quarter of the previous year. The decrease in
interest expense was due to lower debt balances and lower effective interest rates. Our debt was
lower in the 2009 period because in the second quarter of 2008, we used $86.6 million in realized
net proceeds from the exercise of 17,617,331 warrants in May 2008 to pay down our term loan
facility, and $9.4 million in cash to pay down our revolver. Our blended interest rate was 5.7% in
the second quarter of 2009 compared to 11.3% in the 2008 period. As a result of this paydown and
declining interest rates, our interest expense decreased by $2.6 million in the second quarter of
2009 compared to the second quarter of 2008.
Income Taxes. For the three months ended June 30, 2009, we recorded an income tax benefit of
$3.9 million, on a pre-tax loss of $15.7 million. For the quarter ended June 30, 2008, we recorded
an income tax benefit of $14.8 million, on a pre-tax loss of $20.7 million, including a $7.0
million benefit by reversing an uncertain tax position and related accrued interest. The effective
tax rate for the three months ended June 30, 2009 was 25% compared to an effective tax rate of 38%,
excluding the reversal of the uncertain tax position, for the three months ended June 30, 2008.
Six Months Ended June 30, 2009 Compared to the Six Months Ended June 30, 2008
Oil and natural gas sales decreased $58.5 million, or 58% to $42.6 million for the six months
ended June 30, 2009 as compared to $101.1 million for the same period in 2008. This decrease was
driven by commodity price decreases, which decreased 60% for the six months ended June 30, 2009 as
compared to the same period last year. Production volumes increased 4% for the six months ended
June 30, 2009 as compared to the same period last year. Contributing to this production increase
was a 116% increase in Barnett Shale production and a 6% increase in production from our mature oil
fields. Offsetting our oil and natural gas sales were derivative losses of $6.3 million for the six
months ended June 30, 2009.
17
The following table summarizes our oil and natural gas production volumes, average sales
prices (without regard to derivative contract settlements) and period to period comparisons,
including the effect on our oil and natural gas sales, for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mature |
|
|
Mature |
|
|
|
|
|
|
Developing Fields |
|
Oil Fields* |
|
Natural Gas Fields |
|
|
Six Months Ended June 30, 2009 |
|
South Texas |
|
|
Barnett Shale |
|
|
Appalachia |
|
|
Various |
|
Various |
|
Total |
|
|
|
|
|
|
|
|
|
Aggregate Net Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
33 |
|
|
|
4 |
|
|
|
1 |
|
|
|
493 |
|
|
|
49 |
|
|
|
580 |
|
NGLs (MBbls) |
|
|
56 |
|
|
|
62 |
|
|
|
- |
|
|
|
42 |
|
|
|
39 |
|
|
|
199 |
|
Natural Gas (MMcf) |
|
|
1,022 |
|
|
|
409 |
|
|
|
45 |
|
|
|
395 |
|
|
|
1,299 |
|
|
|
3,170 |
|
|
|
|
|
|
|
|
|
|
MBoe |
|
|
260 |
|
|
|
134 |
|
|
|
8 |
|
|
|
601 |
|
|
|
305 |
|
|
|
1,308 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June
30, 2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Aggregate Net Production |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil (MBbls) |
|
|
21 |
|
|
|
2 |
|
|
|
- |
|
|
|
470 |
|
|
|
105 |
|
|
|
598 |
|
NGLs (MBbls) |
|
|
52 |
|
|
|
31 |
|
|
|
- |
|
|
|
40 |
|
|
|
37 |
|
|
|
160 |
|
Natural Gas (MMcf) |
|
|
1,308 |
|
|
|
177 |
|
|
|
10 |
|
|
|
353 |
|
|
|
1,138 |
|
|
|
2,986 |
|
|
|
|
|
|
|
|
|
|
MBoe |
|
|
292 |
|
|
|
62 |
|
|
|
2 |
|
|
|
569 |
|
|
|
331 |
|
|
|
1,256 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in MBoe |
|
|
(32 |
) |
|
|
72 |
|
|
|
6 |
|
|
|
32 |
|
|
|
(26 |
) |
|
|
52 |
|
Percentage Change in MBoe |
|
|
-11.0 |
% |
|
|
116.1 |
% |
|
|
300.0 |
% |
|
|
5.6 |
% |
|
|
-7.9 |
% |
|
|
4.1 |
% |
|
|
|
*
Includes Electra/Burkburnett, Allen/Fitts and Layton fields. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended |
|
|
|
|
June 30, |
|
|
|
|
2009 |
|
2008 |
|
Decrease |
Average sale prices: |
|
|
|
|
|
|
|
|
|
|
|
|
Oil (per Bbl) |
|
$ |
47.35 |
|
|
$ |
109.72 |
|
|
|
-56.8 |
% |
NGLs (per Bbl) |
|
$ |
20.74 |
|
|
|
$57.66 |
|
|
|
-64.0 |
% |
Natural gas (per Mcf) |
|
|
$3.46 |
|
|
|
$8.78 |
|
|
|
-60.6 |
% |
Per Boe |
|
$ |
32.54 |
|
|
|
$80.50 |
|
|
|
-59.6 |
% |
Production levels increased 4% for the six months ended June 30, 2009 as compared to the same
period last year. Drilling activity in our mature oil fields and on our Barnett Shale leasehold
increased the equivalent production volumes by 104 MBoe. These volumes offset the 32 MBoe
reduction in produced volumes in our developing fields of South Texas and loss of 26 Mboe in our
mature natural gas fields. Production volumes in our natural gas fields reflected typical reserve
depletion absent significant new drilling.
The average realized sales prices decreased substantially for the six months ended June 30,
2009 as compared to the same period in 2008. The average realized sales price for oil was $47.35
per barrel for the six months ended June 30, 2009, a decrease of 57%, compared to $109.72 per
barrel for the same period in 2008. The average realized sales price for NGLs was $20.74 for the
six months ended June 30, 2009, a decrease of 64%, compared to $57.66 per barrel for the same
period in 2008. The average realized sales price for natural gas was $3.46 per Mcf for the six
months ended June 30, 2009, a decrease of 61%, compared to $8.78 per Mcf for the same period in
2008.
18
Realized and Unrealized Gain (Loss) from Derivatives. For the six months ended June 30, 2009,
our loss from derivatives was $6.3 million compared to a loss of $48.6 million for the six months
ended June 30, 2008. Our gains and losses during these periods were the net result of recording
actual contract settlements, the premiums for our derivative contracts, and unrealized losses
attributable to mark-to-market values of our derivative contracts at the end of the periods.
Contributing to the increase in realized gains for the six months ended June 30, 2009 was the sale
of natural gas contracts during the second quarter of 2009.
|
|
|
|
|
|
|
|
|
|
|
Six months ended June 30, |
|
|
|
2009 |
|
|
2008 |
|
|
|
(in thousands) |
|
Contract settlements and premium costs: |
|
|
|
|
|
|
|
|
Oil |
|
$ |
6,140 |
|
|
$ |
(8,143 |
) |
Natural gas |
|
|
12,409 |
|
|
|
(1,393 |
) |
|
|
|
|
|
Realized gains (losses) |
|
|
18,549 |
|
|
|
(9,536 |
) |
Mark-to-market losses: |
|
|
|
|
|
|
|
|
Oil |
|
|
(19,211 |
) |
|
|
(32,716 |
) |
Natural gas |
|
|
(5,591 |
) |
|
|
(6,351 |
) |
|
|
|
|
|
Unrealized losses |
|
|
(24,802 |
) |
|
|
(39,067 |
) |
|
|
|
|
|
Realized and unrealized gains (losses) |
|
$ |
(6,253 |
) |
|
$ |
(48,603 |
) |
|
|
|
|
|
Oil and Natural Gas Production Taxes. Our oil and natural gas production taxes were $1.8
million for the six months ended June 30, 2009, compared to $5.8 million for the comparable six
months of the previous year. Production taxes vary by state. Most are based on realized prices at
the wellhead, while Louisiana production tax is based on volumes for natural gas and value for oil.
As revenues or volumes from oil and natural gas sales increase or decrease, production taxes on
these sales also increase or decrease directly. The decrease was due to a significant decrease in
oil and natural gas revenues and retroactive severance tax refunds granted during the six months
ended June 30, 2009. As a percentage of oil and natural gas sales, oil and natural gas production
taxes were 4.2% for the six months ended June 30, 2009, compared to 5.7% for the six months ended
June 30, 2008.
Oil and Natural Gas Production Expense. Our oil and natural gas production expense was $19.2
million for the six months ended June 30, 2009, an increase of $0.4 million, or 2.3%, from the
$18.8 million for the six months ended June 30, 2008. For the six months ended June 30, 2009, our
oil and natural gas production expense was $14.68 per Boe compared to $14.96 per Boe for the six
months ended June 30, 2008, a decrease of 2%. As a percentage of oil and natural gas sales, oil
and natural gas production expense was 45% for the six months ended June 30, 2009, as compared to
19% for the six months ended June 30, 2008. This increase results from a significant drop in
average sales prices per Boe, from $80.50 in 2008 to $32.54 in 2009, a 60% decrease.
Amortization and Depreciation Expense. Our amortization and depreciation expense decreased
$5.3 million, or 24%, for the six months ended June 30, 2009, compared to the six months ended June
30, 2008. The decrease was a result of a lower depletion rate per Boe, partially offset by an
increase in production. On an equivalent basis, our amortization of the full-cost pool of $16.0
million was $12.24 per Boe for the six months ended June 30, 2009, a decrease per Boe of 28%
compared to $21.3 million, or $16.98 per Boe for the six months ended June 30, 2008. This rate
decrease per Boe resulted from lower capitalized costs subsequent to the asset impairment
writedowns in the fourth quarter of 2008 and the first quarter of 2009. The rate decrease was
partially offset by a rate increase resulting from a decrease in our net quantities of proved
reserves of oil and natural gas.
Accretion Expense. SFAS No. 143, Accounting for Asset Retirement Obligations, includes, among
other things, the reporting of the fair value of asset retirement obligations. Accretion expense
is a function of changes in fair value from period-to-period. We recorded $0.9 million for the six
months ended June 30, 2009, compared to $1.1 million for the first six months in 2008.
Impairment Charge. We incurred a $58.9 million impairment of the carrying value of our oil
and gas properties during the first six months of 2009. The impairment of our oil and gas
properties was solely due to a reduction in the tax effected estimated present value of future net
revenues, caused by the dramatic decline in commodity prices, from our proved oil and gas reserves
between December 31, 2008 and March 31, 2009. We incurred no impairment in the second quarter of
2009.
Share-Based Compensation. From time to time, our Board of Directors grants restricted stock
awards under our 2006 Long-Term Incentive Plan. Each of these grants vests in equal increments over
the vesting period provided for the particular award. All currently unvested awards provide for
vesting periods of from one to five years. The share-based compensation on these grants was
calculated using the closing price per share on each of the grant dates and the total share-based
compensation on
19
all these grants will be recognized over their respective vesting periods. For the
six months ended June 30, 2009, we recognized a
total of $1.1 million share-based compensation compared to $1.5 million for the six months
ended June 30, 2008. This decrease is a result of the accelerated vesting of restricted stock
grants to John Cox, our Senior Vice President, who passed away in March 2008.
General and Administrative Expense. For the six months ended June 30, 2009, our general and
administrative expense was $8.1 million, compared to $11.1 million for the six months ended June
30, 2008, a decrease of $3.0 million, or 27%. The decrease results from lower employee related
costs, primarily due to a reduction of estimated bonuses, as well as lower professional fees in the
2009 period.
Other Expense. For the six months ended June 30, 2009, other expense was $0.5 million
compared to $0.4 million for the six months ended June 30, 2008. We recorded a charge to other
expense of $0.4 million for expense related to settlement of litigation. In September 2008, we
entered into an agreement pursuant to which we agreed to pay $16.0 million in settlement of a
pending class action lawsuit. We placed that amount in escrow in October 2008 in anticipation of a
final court approved settlement in the second quarter of 2009. In conjunction with our May 8, 2006
acquisition of RAM Energy, the former stockholders of RAM Energy deposited in escrow 3,200,000
shares of their common stock to secure their potential indemnity obligations to us, including any
loss we might sustain in this litigation or through an agreed settlement. At December 31, 2008, we
recorded a contingent liability of $16.0 million for the settlement and a receivable of $2.8
million representing the market value of the escrow shares based on the closing price of $0.88 per
share on December 31, 2008. On March 5, 2009, the court approved the settlement and on April 6,
2009, the settlement became final. The $0.4 million charge to other expense in the first quarter
of 2009 represents the adjustment to fair market value of the escrowed shares on the final
settlement date of $0.74 per share.
Interest Expense. We recorded interest expense of $7.2 million for the six months ended June
30, 2009, compared to $14.4 million incurred for the first six months of the previous year. The
decrease in interest expense was due to lower debt balances and lower effective interest rates.
Our debt was lower in the 2009 period because in the second quarter of 2008, we used $86.6 million
in realized net proceeds from the exercise of 17,617,331 warrants in May 2008 to pay down the term
facility, and $9.4 million in cash to pay down the revolver. Our blended interest rate was 5.7% in
the second quarter of 2009 compared to 11.3% in the 2008 period. As a result of this paydown and
declining interest rates, our interest expense decreased by $7.2 million for the six months ended
June 30, 2009 compared to the same period in 2008.
Income Taxes. For the six months ended June 30, 2009, we recorded an income tax benefit of
$27.9 million, on a pre-tax loss of $77.8 million. For the six months ended June 30, 2008, our
income tax benefit was $15.4 million, on a pre-tax loss of $21.8 million, including a $7.0 million
benefit by reversing an uncertain tax position and related accrued interest. Excluding the first
quarter 2009 ceiling test impairment of $58.9 million and the related tax benefit of $21.4 million,
the effective tax rate was 35% for the first six months of 2009. Excluding the reversal of the
uncertain tax position, the effective tax rate was 39% for the first six months of 2008.
Liquidity and Capital Resources
As of June 30, 2009, we had cash and cash equivalents of $2.2 million, and $32.8 million was
available under our revolving credit facility. At that date, we had $255.7 million of indebtedness
outstanding, including $255.4 million under our credit facility and $0.3 million in other
indebtedness. In addition, we had $0.2 million utilized by outstanding letters of credit. As of
June 30, 2009, we had an accumulated deficit of $217.0 million and a working capital deficit of
$2.5 million.
Credit Facility. In November 2007, in conjunction with the Ascent acquisition, we entered into
a $500.0 million credit facility with Guggenheim Corporate Funding, LLC, for itself and on behalf
of other institutional lenders. The facility, which replaced our previous $300.0 million facility,
includes a $250.0 million revolving credit facility, a $200.0 million term loan facility, and an
additional $50.0 million available under the term loan as requested by us and approved by the
lenders. The entire amount of the $200.0 million term loan was advanced at closing. The borrowing
base under the revolving credit facility at the closing was $175.0 million, a portion of which was
advanced at the closing of the Ascent acquisition. Borrowings under the facility were used to
refinance RAM Energys existing indebtedness, fund the cash requirements in connection with the
closing of the Ascent acquisition, and for working capital and other general corporate purposes.
Funds advanced under the revolving credit facility may be paid down and re-borrowed during the
four-year term of the revolver, and initially bore interest at LIBOR plus a margin ranging from
1.25% to 2.0% based on a percentage of usage. At June 30, 2009, the balance outstanding under our
revolving credit facility was $142.0 million. The term loan portion of our credit facility
provides for payments of interest only during its five-year term, with the initial interest rate
being LIBOR plus 7.5%. The $175.0 million borrowing base under our revolving credit facility was
reaffirmed in April 2009.
Advances under our credit facility are secured by liens on substantially all of our properties
and assets. The credit facility contains representations, warranties and covenants customary in
transactions of this nature, including financial covenants
20
relating to current ratio, minimum
interest coverage ratio, maximum leverage ratio and a required ratio of asset value to total
indebtedness.
On June 26, 2009, we renegotiated certain terms of our credit facility to provide us greater
flexibility in complying with certain of the financial covenants under the loan agreement. In
exchange for the added flexibility afforded by these changes to the credit facility, we agreed to
increase the base cash interest rate on both the revolving credit facility and the term loan credit
facility by 1% per annum, establish a LIBOR floor of 1.5% and pay an additional 2.75% per annum of
non-cash, payment-in-kind, or PIK, interest on the term portion of the facility. Accrued PIK
interest will be added to the principal balance of the term loan on a monthly basis and paid at
maturity.
In May of 2008, we used $86.6 million in realized net proceeds from the exercise of 17,617,331
warrants to pay down the term facility to the existing level of $113.4 million. As a result of
this paydown and declining interest rates, our interest expense decreased by $2.6 million in the
second quarter of 2009 compared to the second quarter of 2008.
Notwithstanding the recent amendments to our loan agreement, our ability to comply with the
financial covenants in our credit facility may be affected by events beyond our control and, as a
result, in future periods we may be unable to meet these ratios and financial condition tests.
These financial ratio restrictions and financial condition tests could limit our ability to obtain
future financings, make needed capital expenditures, withstand a future downturn in our business or
the economy in general or otherwise conduct necessary corporate activities. A breach of any of
these covenants or our inability to comply with the required financial ratios or financial
condition tests could result in a default under our credit facility. A default, if not cured or
waived, could result in acceleration of all indebtedness outstanding under our credit facility. The
accelerated debt would become immediately due and payable. If that should occur, we may be unable
to pay all such debt or to borrow sufficient funds to refinance it. Even if new financing were then
available, it may not be on terms that are acceptable to us. At June 30, 2009, we were in
compliance with all of the financial covenants under our credit facility; however, a continuing
decline in oil and natural gas prices, or a prolonged period of lower oil and natural gas prices at
current levels, could eventually result in our failing to meet certain of the financial covenants
under our credit facility.
We are required to maintain commodity hedges with respect to not less than 50%, but not more
than 85%, of our projected monthly production volumes on a rolling 30-month basis, until the
leverage ratio is less than or equal to 2.0 to 1.0. At June 30, 2009, our commodity hedging
represented approximately 55% of our projected production volumes through December 31, 2011.
Senior Notes. In February 1998, RAM Energy completed the sale of $115.0 million of 11.5%
Senior Notes due 2008 in a public offering of which $28.4 million remained outstanding at December
31, 2007. These notes were retired at maturity on February 15, 2008 using proceeds from our
revolving credit facility.
Cash Flow From Operating Activities. Our cash flow from operating activities is comprised of
three main items: net loss, adjustments to reconcile net loss to cash provided before changes in
operating assets and liabilities, and changes in operating assets and liabilities. For the six
months ended June 30, 2009, our net loss was $49.9 million, as compared with a net loss of $6.4
million for the six months ended June 30, 2008. Adjustments before changes in operating assets and
liabilities (primarily non-cash items such as amortization and depreciation, asset impairment
charge, unrealized losses on derivatives, and deferred income taxes) were $76.3 million for the six
months ended June 30, 2009 compared to $48.9 million for the first six months of 2008, an increase
of $27.4 million. Asset impairment charge, offset by deferred income taxes and unrealized losses on
derivatives, caused most of this increase. Changes in operating assets and liabilities for the
six months ended June 30, 2009 utilized $9.5 million of cash, compared with utilizing $0.9 million
for the six months ended June 30, 2008. For the six months ended June 30, 2009, in total, net cash
provided by operating activities was $16.9 million compared to $41.6 million of net cash provided
by operating activities for the first six months of the previous year.
Cash Flow From Investing Activities. For the six months ended June 30, 2009, net cash used in
our investing activities was $17.5 million, consisting of $18.1 million in payments for oil and gas
properties and other equipment offset by $0.6 million in proceeds from sales of property and
equipment. For the six months ended June 30, 2008, net cash used in our investing activities was
$37.3 million.
Cash Flow From Financing Activities. For the six months ended June 30, 2009, net cash
provided in our financing activities was $2.6 million, compared to net cash provided of $5.8
million for the six months ended June 30, 2008. During the first six months of 2009, we received
proceeds of $18.0 million from borrowings on long-term debt, which was offset by $13.1 million to
reduce our long term debt, and $2.3 million in payments for deferred loan costs. During the six
months of 2008, we used $135.0 million to reduce our long term debt. Other cash provided during
the six months of 2008 included $54.2 million in additional long-term debt borrowings and $86.6
million in the exercise of outstanding warrants.
21
Capital Commitments
During the six months ended June 30, 2009, we had capital expenditures of $17.7 million
relating to our oil and gas operations, of which $16.7 million was allocated to development and
exploratory costs, and $1.0 million was for acquisition costs.
We initially established a non-acquisition capital expenditures budget for 2009 of from
$40.0-$45.0 million; however, due to the approximately 40% decline in natural gas market prices
since year end 2008 and the persistence of lower prices into the third quarter of 2009, we have
revised to $30.0-$35.0 million our 2009 non-acquisition capital expenditures budget as follows:
|
|
|
geological, geophysical and seismic costs ($4.0 million); |
|
|
|
|
developmental drilling and recompletions ($24.0-$29.0 million); and |
|
|
|
|
exploratory drilling, including leasehold acquisitions ($2.0 million). |
In our revised 2009 non-acquisition capital budget, we have allocated $6.0-$8.0 million for
drilling on our South Texas properties, $1.0-$2.0 million for our North Texas Barnett Shale,
$5.0-$7.0 million for continued development of our Electra/Burkburnett area, $10.0 million for
recompletion and production enhancement operations primarily in our Louisiana mature gas fields,
and $2.0 million to our Pontotoc properties in Oklahoma.
The amount and timing of our capital expenditures for calendar year 2009 may vary depending on
a number of factors, including prevailing market prices for oil and natural gas, the favorable or
unfavorable results of operations actually conducted, projects proposed by third party operators on
jointly owned acreage, development by third party operators on adjoining properties, rig and
service company availability, and other influences that we cannot predict.
Although we cannot provide any assurance, assuming successful implementation of our strategy,
including the future development of our proved reserves and realization of our cash flows as
anticipated, we believe that cash flows from operations will be sufficient to satisfy our budgeted
non-acquisition capital expenditures, working capital and debt service obligations for 2009. The
actual amount and timing of our future capital requirements may differ materially from our
estimates as a result of, among other things, changes in product pricing and regulatory,
technological and competitive developments. Sources of additional financing available to us may
include commercial bank borrowings, vendor financing and the sale of equity or debt securities. We
cannot provide any assurance that any such financing will be available on acceptable terms or at
all.
The credit markets are undergoing significant volatility. Many financial institutions have
liquidity concerns, prompting government intervention to mitigate pressure on the credit markets.
Our exposure to the current credit market crisis includes our revolving credit facility,
counterparty risks related to our trade credit and risks related to our cash investments.
Our revolving credit facility matures in November 2011. Our term loan facility matures in
November 2012. Should current credit market volatility be prolonged for several years, future
extensions of our credit facility may contain terms that are less favorable than those of our
current credit facility.
Current market conditions also elevate the concern over our cash deposits, which total
approximately $2.2 million, and counterparty risks related to our trade credit. Our cash accounts
and deposits with any financial institution that exceed the amount insured by the Federal Deposit
Insurance Corporation are at risk in the event one of these financial institutions fail. We sell
our crude oil, natural gas and NGLs to a variety of purchasers. Some of these parties are not as
creditworthy as we are and may experience liquidity problems. Non-performance by a trade creditor
could result in losses.
22
ITEM 3 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Exposure to market risk is managed and monitored by our senior management. Senior management
approves the overall investment strategy that we employ and has responsibility to ensure that the
investment positions are consistent with that strategy and the level of risk acceptable to us. The
carrying amounts reported in our consolidated balance sheets for cash and cash equivalents, trade
receivables and payables, installment notes and variable rate long-term debt approximate their fair
values.
Interest Rate Sensitivity
We are exposed to changes in interest rates. Changes in interest rates affect the interest
earned on our cash and cash equivalents and the interest rate paid on our borrowings. We have not
used interest rate derivative instruments to manage our exposure to interest rate changes.
Our long-term debt, as of June 30, 2009, is denominated in U.S. dollars. Our debt has been
issued at variable rates, and as such, our interest expense could be impacted by interest rate
shifts; however, under the recent amendment to our credit facility, which included a LIBOR floor
rate of 1.5% per annum, unless LIBOR rates exceed 1.5% per annum, an increase in LIBOR rates will
not affect the rate or amount of interest payable under the facility. If LIBOR rates increase to
greater than 1.5% per annum, then the impact of a 100-basis point increase in LIBOR interest rates
above such floor rate would result in an increase in interest expense of $2.6 million annually.
Absent an increase in LIBOR rates to a rate in excess of 1.5% per annum, a decrease in LIBOR rates
would not result in a decrease in our interest expense.
Commodity Price Risk
Our revenue, profitability and future growth depend substantially on prevailing prices for oil
and natural gas. Prices also affect the amount of cash flow available for capital expenditures and
our ability to borrow and raise additional capital. Lower prices may also reduce the amount of oil
and natural gas that we can economically produce. We currently sell most of our oil and natural gas
production under market price contracts.
During the quarter ended June 30, 2009, Shell Energy North America-US accounted for $26.4
million, or approximately 62% and Devon Energy Production Company accounted for $2.9 million, or
approximately 7% of our revenue from the sales of oil and natural gas.
To reduce exposure to fluctuations in oil and natural gas prices, to achieve more predictable
cash flow, and as required by our lenders, we periodically utilize various derivative strategies to
manage the price received for a portion of our future oil and natural gas production. We have not
established derivatives in excess of our expected production.
Our open derivative positions at June 30, 2009, consisting of put/call collars and put
options, also called bare floors as they provide a floor price without a corresponding ceiling,
are shown in the following table:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Crude Oil (Bbls) |
|
|
Natural Gas (Mmbtu) |
|
|
|
Floors |
|
|
Ceilings |
|
|
Floors |
|
|
Ceilings |
|
|
|
Per Day |
|
|
Price |
|
|
Per Day |
|
|
Price |
|
|
Per Day |
|
|
Price |
|
|
Per Day |
|
|
Price |
|
Collars |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
|
1,334 |
|
|
|
$60.00 |
|
|
|
1,334 |
|
|
|
$79.59 |
|
|
|
10,995 |
|
|
|
$4.55 |
|
|
|
10,995 |
|
|
|
$10.12 |
|
2010 |
|
|
1,503 |
|
|
|
$53.74 |
|
|
|
1,503 |
|
|
|
$80.57 |
|
|
|
5,288 |
|
|
|
$5.00 |
|
|
|
5,288 |
|
|
|
$9.23 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Bare Floors |
|
|
|
|
|
Bare Floors |
|
|
|
|
Year |
|
Per Day |
|
|
Price |
|
|
|
|
|
|
|
|
Per Day |
|
|
Price |
|
|
|
|
|
|
|
2009 |
|
|
1,666 |
|
|
|
$69.00 |
|
|
|
|
|
|
|
|
|
|
|
0 |
|
|
|
$0.00 |
|
|
|
|
|
|
|
|
|
2010 |
|
|
1,121 |
|
|
|
$64.84 |
|
|
|
|
|
|
|
|
|
|
|
4,616 |
|
|
|
$4.36 |
|
|
|
|
|
|
|
|
|
Both crude oil and natural gas floors and ceilings for 2009 cover July through December. Crude
oil bare floors for 2009 cover July through December. Crude oil floors and ceilings for 2010 cover
January through December, and crude oil bare floors for 2010 cover January through March and July
through December. Natural gas floors and ceilings for 2010 cover January through June and November
and December, and natural gas bare floors for 2010 cover April through October.
23
ITEM 4 CONTROLS AND PROCEDURES
Under the supervision and with the participation of our management, including our principal
executive officer and principal financial officer, we evaluated the design and operation of our
disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities
Exchange Act of 1934, or the Exchange Act) as of June 30, 2009. On the basis of this review, our
management, including our principal executive officer and principal financial officer, concluded
that our disclosure controls and procedures are designed, and are effective, to give reasonable
assurance that the information required to be disclosed by us in reports that we file under the
Exchange Act is recorded, processed, summarized and reported within the time periods specified in
the rules and forms of the SEC and to ensure that information required to be disclosed in the
reports filed or submitted under the Exchange Act is accumulated and communicated to our
management, including our principal executive officer and principal financial officer, in a manner
that allows timely decisions regarding required disclosure.
We did not effect any change in our internal controls over financial reporting during the
quarter ended June 30, 2009 that has materially affected, or is reasonably likely to materially
affect, our internal control over financial reporting.
Forward-Looking Statements
The description of our plans and expectations set forth herein, including expected capital
expenditures and acquisitions, are forward-looking statements made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995. These plans and expectations
involve a number of risks and uncertainties. Important factors that could cause actual capital
expenditures, acquisition activity or our performance to differ materially from the plans and
expectations include, without limitation, our ability to satisfy the financial covenants of our
outstanding debt instruments and to raise additional capital; our ability to manage our business
successfully and to compete effectively in our business against competitors with greater financial,
marketing and other resources; and adverse regulatory changes. Readers are cautioned not to place
undue reliance on these forward-looking statements, which speak only as of the date hereof. We
undertake no obligation to update or revise these forward-looking statements to reflect events or
circumstances after the date hereof including, without limitation, changes in our business strategy
or expected capital expenditures, or to reflect the occurrence of unanticipated events.
24
PART II OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
Reference is made to Part I, Item 3, Legal Proceedings, in our annual report on Form 10-K
for the year ended December 31, 2008, for a discussion of pending legal proceedings to which we are
a party.
In the litigation matter described in our Form 10-K styled Sacket v. Great Plains Pipeline
Company, et al., on September 18, 2008, our subsidiary RAM Energy, together with the other
defendants in the lawsuit, entered into a settlement agreement with the plaintiff, individually and
as representative of the putative class, pursuant to which the defendants agreed to pay an
aggregate $25.0 million in settlement of the lawsuit. RAM Energy and its subsidiaries agreed to
pay $16.0 million of the settlement amount, with the unrelated third party defendants paying the
remaining $9.0 million. On March 5, 2009, the Court entered an order approving the settlement and
the related plan of allocation and distribution of the settlement fund. The judgment became final
on April 6, 2009 and the settlement was completed.
In conjunction with our May 8, 2006 acquisition of RAM Energy, the former stockholders of RAM
Energy deposited in escrow 3,200,000 shares of our common stock to secure their potential indemnity
obligations to us, including any loss we might sustain in the pending litigation. Pursuant to the
terms of the escrow agreement, at such time as the settlement became final, the former stockholders
of RAM Energy had the option of substituting cash for all or a portion of their escrowed shares,
based on the average closing price of our common stock for the ten trading days ending on the last
trading day prior to the date our indemnity claim against the escrow was paid (defined as Fair
Market Value), in which event the escrowed shares for which cash is substituted would be delivered
to the stockholders and the cash paid to us out of escrow. On April 7, 2009, we made a claim
against the escrow for all of the escrowed shares. Also on April 7, 2009, the former stockholders
of RAM Energy notified the escrow agent that they would substitute cash, at a Fair Market Value of
$0.74 per share, for a total of 316,190 shares of their shares of our common stock held in escrow.
On April 8, 2009, the escrow agent initiated the transfer to us, in satisfaction of the
indemnification obligation of the former RAM stockholders, of a total of 2,883,810 shares of our
common stock and $0.2 million in cash, less the fees and expenses of the escrow agent. The shares of
common stock we received are held as treasury shares.
During 2008, we recorded a contingent liability of $16.0 million for our share of the
settlement amount and a receivable of $2.8 million in other current assets representing the value
of the escrowed shares based on the closing price of $0.88 per share on December 31, 2008. We also
recorded a charge to other expense of $13.2 million for the difference between the settlement
liability and the value of the escrowed shares. During the first quarter of 2009, we recorded a
charge to other expense of $0.4 million and adjusted the receivable from $2.8 million to $2.4
million to adjust the Fair Market Value of the escrowed shares to reflect the final settlement due
of $0.74 per share.
In the litigation matter described in our Form 10-K styled Rathborne Land Company, et al.,
v. Ascent Energy Inc., et al.,
on June 1, 2009, the trial court entered judgment against two of our subsidiaries (former Ascent
entities) in the amount of $4.6 million and shortly thereafter we filed an appeal with the United
States Court of Appeals for the Fifth Circuit. We also filed a motion to stay the judgment pending
final disposition on appeal and to permit the posting of a cash bond as security for the stay,
which motion was granted by the court.
In conjunction with our November 29, 2007 acquisition of Ascent, the former stockholders and
note holders of Ascent deposited $20.0 million in escrow to secure their obligation to indemnify us
with respect to certain liabilities and obligations of Ascent, including any loss, cost, liability
or expense we might incur in connection with this and other pending litigation, subject to a
sharing arrangement. After giving effect to such sharing arrangement with respect to previously
settled litigation, we and the former Ascent owners will share equally the first $1.8 million of
any losses attributable to this lawsuit and the former Ascent owners, out of the escrow, will bear
the remaining portion of any loss so incurred, up to the remaining balance in the escrow fund. On
June 18, 2009, we arranged for the posting of a cash security bond with the registry of the trial
court in the amount of $5.5 million, being 120% of the amount of the judgment, as required by court
rule. By agreement with the representative of the former Ascent stockholders and note holders, we
posted the sum of $0.9 million toward the security deposit and the remaining sum of $4.6 million
was posted out of the escrow fund. All remaining funds in the escrow account, less the sum of
approximately $0.2 million (which was retained in the escrow account to cover additional and incidental
fees and expenses related to this litigation), were distributed to the Ascent stockholders and note
holders per the terms of the escrow agreement. During the fourth quarter of 2008, we recorded a
contingent liability of $0.9 million related to this litigation.
25
ITEM 1A RISK FACTORS
Previously reported. Reference is made to Part I, Item 1A, Risk Factors, in our annual
report on Form 10-K for the year ended December 31, 2008, for a discussion of the risk factors
which are the known, material risks that could affect our business and our results of operations.
ITEM 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Our 2009 Annual Meeting of Stockholders was held May 5, 2009. At the meeting, the following
items were submitted to a vote of the stockholders:
|
(a) |
|
Election of Director. Mr. Gerald R. Marshall was reelected to serve as a director
on our board of directors until the 2012 annual meeting of our stockholders. Mr.
Marshall received 65,619,660 votes, or 99.7% of all votes cast by the holders of our
common stock present in person or by proxy. Larry E. Lee, Sean P. Lane and John M.
Reardon continue to serve as directors on our board of directors. |
|
|
(b) |
|
Ratification of Appointment of Independent Auditors. The ratification of the
appointment of UHY LLP as our independent auditors for 2009 received 65,532,345 votes,
or 99.6% of all votes cast by the holders of our common stock present in person or by
proxy. |
ITEM 5 OTHER INFORMATION
None.
26
ITEM
6 EXHIBITS
|
|
|
|
|
Exhibit |
|
Description |
|
Method of Filing |
3.1
|
|
Amended and Restated Certificate of Incorporation of the Registrant.
|
|
(1) [3.1] |
|
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of the Registrant.
|
|
(13) [3.2] |
|
|
|
|
|
4.1
|
|
Specimen Unit Certificate.
|
|
(1) [4.1] |
|
|
|
|
|
4.2
|
|
Specimen Common Stock Certificate.
|
|
(1) [4.2] |
|
|
|
|
|
4.3
|
|
Amended Specimen Warrant Certificate.
|
|
(12) [4.3] |
|
|
|
|
|
4.4
|
|
Amended Form of Unit Purchase Option granted to EarlyBirdCapital, Inc.
|
|
(2) [4.4] |
|
|
|
|
|
4.5
|
|
Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
|
|
(12) [4.5] |
|
|
|
|
|
4.6
|
|
Indenture dated as of February 24, 1998 among RAM Energy, Inc., the Subsidiary Guarantors named therein, and United States Trust Company of New
York, Trustee.
|
|
(7) [4.1] |
|
|
|
|
|
4.6.1
|
|
Supplemental Indenture dated February 24, 1998 among RAM Energy, Inc., the Subsidiary Guarantors named therein, and United States Trust Company of
New York, Trustee.
|
|
(8) [4.6.1] |
|
|
|
|
|
4.6.2
|
|
Second Supplemental Indenture dated as of November 22, 2002 among RAM Energy, Inc., the Subsidiary Guarantors and The Bank of New York, Successor
to United States Trust Company of New York, as trustee.
|
|
(8) [4.6.2] |
|
|
|
|
|
4.6.3
|
|
Third Supplemental Indenture dated as of April 29, 2004 among RAM Energy, Inc., the Subsidiary Guarantors and The Bank of New York, Successor to
United States Trust Company of New York, as trustee.
|
|
(8) [4.6.3] |
|
|
|
|
|
4.6.4
|
|
Fourth Supplemental Indenture dated as of December 17, 2004 among RAM Energy, Inc., The Bank of New York, Successor to United States Trust Company
of New York, as trustee, RWG Energy, Inc., WG Operating, Inc., WG Royalty Company, Wise County Construction Company, LLC, and WG Pipeline LLC, as
Additional Subsidiary Guarantors.
|
|
(8) [4.6.4] |
|
|
|
|
|
10.1
|
|
Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer & Trust Company and the Initial Stockholders.
|
|
(2) [10.6] |
|
|
|
|
|
10.2
|
|
Form of Registration Rights Agreement among the Registrant and the Initial Stockholders.
|
|
(2) [10.9] |
|
|
|
|
|
10.2.1
|
|
Amendment to Registration Rights Agreement among this Registrant and the Founders dated May 8, 2006.
|
|
(1) [10.9.1] |
|
|
|
|
|
10.3
|
|
Agreement and Plan of Merger dated October 20, 2005 among Registrant, RAM Acquisition, Inc., RAM Energy, Inc. and the Stockholders of RAM Energy,
Inc.
|
|
(3) [10.11] |
|
|
|
|
|
10.3.1
|
|
Amendment No. 1, dated November 11, 2005, to Agreement and Plan of Merger dated October 20, 2005 among the Registrant, RAM Acquisition, Inc., RAM
Energy, Inc. and the Stockholders of RAM Energy, Inc.
|
|
(4) [10.11] |
|
|
|
|
|
10.3.2
|
|
Amendment No. 2, dated February 15, 2006, to Agreement and Plan of Merger dated October 20, 2005 among the Registrant, RAM Acquisition, Inc., RAM
Energy, Inc. and the Stockholders of RAM Energy, Inc.
|
|
(6) [10.11] |
|
|
|
|
|
10.4
|
|
Voting Agreement dated October 20, 2005 among the Registrant, the stockholders of RAM Energy, Inc. and certain security holders of the Registrant.
|
|
(3) [10.2] |
|
|
|
|
|
10.4.1
|
|
Second Amended and Restated Voting Agreement included as Annex D of the Registrants Definitive Proxy Statement (No. 000-50682), dated April 10,
2006 and incorporated by reference herein.
|
|
(5) [Annex D] |
|
|
|
|
|
10.5
|
|
Lock-Up Agreement dated October 20, 2005 executed by the stockholders of RAM Energy, Inc.
|
|
(3) [10.4] |
|
|
|
|
|
10.6
|
|
Employment Agreement between Registrant and Larry E. Lee dated May 8, 2006.*
|
|
(1) [10.15] |
|
|
|
|
|
10.6.1
|
|
First Amendment to Employment Agreement between Registrant and Larry E. Lee dated
October 18, 2006. *
|
|
(9) [10.1] |
|
|
|
|
|
10.6.2
|
|
Second Amendment to Employment Agreement of Larry E. Lee dated February 25, 2008.*
|
|
(17) [10.6.2] |
27
|
|
|
|
|
|
|
|
|
|
10.6.3
|
|
Third Amendment to Employment Agreement of Larry E. Lee, dated December 30, 2008.*
|
|
(20) [10.6.3] |
|
|
|
|
|
10.6.4
|
|
Fourth Amendment to Employment Agreement of Larry E. Lee dated March 24, 2009.*
|
|
(21) [10.6.4] |
|
|
|
|
|
10.7
|
|
Escrow Agreement by and among the Registrant, Larry E. Lee and Continental Stock Transfer
& Trust Company dated May 8, 2006.
|
|
(1) [10.16] |
|
|
|
|
|
10.8
|
|
Registration Rights Agreement among Registrant and the investors signatory thereto dated
May 8, 2006.*
|
|
(1) [10.17] |
|
|
|
|
|
10.9
|
|
Form of Registration Rights Agreement among the Registrant and the Investors party thereto.
|
|
(3) [10.17] |
|
|
|
|
|
10.10
|
|
Agreement between RAM and Shell Trading-US dated February 1, 2006.
|
|
(1) [10.22] |
|
|
|
|
|
10.11
|
|
Agreement between RAM and Targa dated January 30, 1998.
|
|
(1) [10.23] |
|
|
|
|
|
10.11.1
|
|
Amendment to Agreement between RAM Energy and Targa dated effective as of April
1, 2006, filed as an exhibit to Registrants Form 8-K dated June 5, 2006 and
incorporated by reference herein.
|
|
(10) [10.23.1] |
|
|
|
|
|
10.12
|
|
Long-Term Incentive Plan of the Registrant. Included as Annex C of the
Registrants Definitive Proxy Statement (No. 000-50682), dated April 12, 2006 and
incorporated by reference herein.*
|
|
(5) [Annex C] |
|
|
|
|
|
10.12.1
|
|
First Amendment to RAM Energy Resources, Inc. 2006 Long-Term Incentive Plan
effective May 8, 2008.*
|
|
(18) [Exhibit A] |
|
|
|
|
|
10.13
|
|
Third Amended and Restated Loan Agreement dated as of April 3, 2006, between RAM
Energy, Inc., the lenders described therein, Guggenheim Corporate Funding, LLC as the
Arranger and Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation
Agent, and WESTLB AG, New York Branch, as the Syndication Agent.
|
|
(11) [10.14] |
|
|
|
|
|
10.13.1
|
|
First Amendment to Third Amended and Restated Loan Agreement between RAM Energy,
Inc., the lenders described therein, Guggenheim Corporate Funding, LLC, as the
Arranger and Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation
Agent, and WEST LB AG, New York Branch, as the Syndication Agent, dated as of August
8, 2007.
|
|
(14) [10.13.1] |
|
|
|
|
|
10.14
|
|
Deferred Bonus Compensation Plan of RAM Energy, Inc. dated as of April 21, 2004.*
|
|
(12) [10.14] |
|
|
|
|
|
10.15
|
|
Purchase and Sale Agreement dated May 10, 2007 between Layton Enterprises, Inc.
and the Registrant (exhibits and schedules intentionally omitted).
|
|
(14) [10.15] |
|
|
|
|
|
10.16
|
|
Agreement and Plan of Merger dated October 16, 2007 among RAM Energy Resources
Corporation, Ascent Energy Inc. and Ascent Acquisition Corp.
|
|
(15) [2.1] |
|
|
|
|
|
10.17
|
|
Loan Agreement dated November 29, 2007, by and between RAM Energy Resources, Inc.,
as Borrower, and Guggenheim Corporate Funding, LLC, as the Arranger and Administrative
Agent, Wells Fargo Foothill, Inc., as the Documentation Agent and WestLB AG, New York
Branch and CIT Capital USA Inc., as the Co-Syndication Agents, and the financial
institutions named therein as the Lenders.
|
|
(16) [10.1] |
|
|
|
|
|
10.17.1
|
|
First Amendment to Loan Agreement dated November 29, 2007, by and between RAM Energy
Resources, Inc., as Borrower, and Guggenheim Corporate Funding, LLC, as the Arranger
and Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation Agent and
WestLB AG, New York Branch and CIT Capital USA Inc., as the Co-Syndication Agents, and
the financial institutions named therein as the Lenders.
|
|
(22) [10.17.1] |
|
|
|
|
|
10.17.2
|
|
Second Amendment to Loan Agreement dated November 29, 2007, by and between RAM Energy
Resources, Inc., as Borrower, and Guggenheim Corporate Funding, LLC, as the Arranger
and Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation Agent and
WestLB AG, New York Branch and CIT Capital USA Inc., as the Co-Syndication Agents, and
the financial institutions named therein as the Lenders.
|
|
(23) [10.17.2] |
|
|
|
|
|
10.18
|
|
Description of Compensation Arrangement with G. Les Austin.*
|
|
(19) [10.18] |
|
|
|
|
|
10.18.1
|
|
First Amendment to Employment Agreement of G. Les Austin, dated December 30, 2008.*
|
|
(20) [10.18.1] |
|
|
|
|
|
10.19
|
|
Change in Control Separation Benefit Plan of RAM Energy Resources, Inc. and
Participating Subsidiaries.*
|
|
(22) [10.19] |
|
|
|
|
|
31.1
|
|
Rule 13(A) 14(A) Certification of our Principal Executive Officer.
|
|
** |
|
|
|
|
|
31.2
|
|
Rule 13(A) 14(A) Certification of our Principal Financial Officer.
|
|
** |
28
|
|
|
|
|
|
|
|
|
|
32.1
|
|
Section 1350 Certification of our Principal Executive Officer.
|
|
** |
|
|
|
|
|
32.2
|
|
Section 1350 Certification of our Principal Financial Officer.
|
|
** |
|
|
|
* |
|
Management contract or compensatory plan or arrangement. |
|
** |
|
Filed herewith. |
|
(1) |
|
Filed as an exhibit to the Registrants Current Report on Form
8-K filed on May 12, 2006, as the exhibit number indicated in
brackets and incorporated by reference herein. |
|
(2) |
|
Filed as an exhibit to the Registrants Registration Statement on
Form S-1 (SEC File No. 333-113583) as the exhibit number
indicated in brackets and incorporated by reference herein. |
|
(3) |
|
Filed as an exhibit to the Registrants Current Report on Form
8-K filed on October 26, 2005, as the exhibit number indicated in
brackets and incorporated by reference herein. |
|
(4) |
|
Filed as an exhibit to the Registrants Current Report on Form
8-K filed on November 14, 2005, as the exhibit number indicated
in brackets and incorporated by reference herein. |
|
(5) |
|
Included as an annex to the Registrants Definitive Proxy
Statement (No. 000-50682), dated April 12, 2006, as the annex
letter indicated in brackets and incorporated by reference
herein. |
|
(6) |
|
Filed as an exhibit to the Registrants Current Report on Form
8-K filed on February 21, 2006, as the exhibit number indicated
in brackets and incorporated by reference herein. |
|
(7) |
|
Filed as an exhibit to the Registration Statement on Form S-1
(SEC File No. 333-42641) of RAM Energy, Inc., as the exhibit
number indicated in brackets and incorporated by reference
herein. |
|
(8) |
|
Filed as an exhibit to the Registrants Quarterly Report on Form
10-Q filed on August 14, 2006, as the exhibit number indicated in
brackets and incorporated by reference herein. |
|
(9) |
|
Filed as an exhibit to the Registrants Current Report on Form
8-K on October 20, 2006, as the exhibit number indicated in
brackets and incorporated by reference herein. |
|
(10) |
|
Filed as an exhibit to the Registrants Current Report on Form
8-K on June 5, 2006, as the exhibit number indicated in brackets
and incorporated by reference herein. |
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(11) |
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Filed as an exhibit to Registrants amended Quarterly Report on
Form 10-Q/A filed on December 20, 2006, as the exhibit number
indicated in brackets and incorporated by reference herein. |
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(12) |
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Filed as an exhibit to the Registrants Registration Statement
on Form S-1 (SEC File No. 333-138922) as the exhibit number
indicated in brackets and incorporated by reference herein. |
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(13) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K filed on February 2, 2007, as the exhibit number indicated
in brackets and incorporated by reference herein. |
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(14) |
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Filed as an exhibit to the Registrants Quarterly Report on Form
10-Q filed on August 10, 2007, as the exhibit number indicated
in brackets and incorporated by reference herein. |
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(15) |
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Filed as an exhibit to Registrants Form 8-K dated October 18,
2007 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(16) |
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Filed as an exhibit to Registrants Form 8-K dated November 29,
2007 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(17) |
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Filed as an exhibit to Registrants Form 8-K dated February 26,
2008 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(18) |
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Filed as an exhibit to Registrants Definitive Proxy Statement
(No. 000-50682) dated April 14, 2008, as the exhibit number
indicated in the brackets and incorporated herein by reference. |
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(19) |
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Filed as an exhibit to the Registrants Quarterly Report on Form
10-Q filed on May 9, 2008, as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(20) |
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Filed as an exhibit to Registrants Form 8-K filed January 5,
2009 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(21) |
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Filed as an exhibit to Registrants Form 8-K filed March 25,
2009 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(22) |
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Filed as an exhibit to Registrants Annual Report on Form 10-K
filed on March 12, 2009 as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(23) |
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Filed as an exhibit to Registrants Form 8-K filed July 2, 2009
as the exhibit number indicated in brackets and incorporated by
reference herein. |
29
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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RAM ENERGY RESOURCES, INC. |
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August 6, 2009
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By: /s/ Larry E. Lee |
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Name: Larry E. Lee |
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Title: Chairman, President and Chief Executive Officer |
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August 6, 2009
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By: /s/ G. Les Austin |
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Name: G. Les Austin |
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Title: Senior Vice President and Chief Financial Officer |
30
INDEX TO EXHIBITS
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Exhibit |
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Description |
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Method of Filing |
3.1
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Amended and Restated Certificate of Incorporation of the Registrant.
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(1) [3.1] |
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3.2
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Amended and Restated Bylaws of the Registrant.
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(13) [3.2] |
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4.1
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Specimen Unit Certificate.
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(1) [4.1] |
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4.2
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Specimen Common Stock Certificate.
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(1) [4.2] |
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4.3
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Amended Specimen Warrant Certificate.
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(12) [4.3] |
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4.4
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Amended Form of Unit Purchase Option granted to EarlyBirdCapital, Inc.
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(2) [4.4] |
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4.5
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Form of Warrant Agreement between Continental Stock Transfer & Trust Company and the Registrant.
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(12) [4.5] |
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4.6
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Indenture dated as of February 24, 1998 among RAM Energy, Inc., the Subsidiary Guarantors named
therein, and United States Trust Company of New York, Trustee.
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(7) [4.1] |
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4.6.1
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Supplemental Indenture dated February 24, 1998 among RAM Energy, Inc., the Subsidiary
Guarantors named therein, and United States Trust Company of New York, Trustee.
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(8) [4.6.1] |
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4.6.2
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Second Supplemental Indenture dated as of November 22, 2002 among RAM Energy, Inc., the
Subsidiary Guarantors and The Bank of New York, Successor to United States Trust Company of New
York, as trustee.
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(8) [4.6.2] |
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4.6.3
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Third Supplemental Indenture dated as of April 29, 2004 among RAM Energy, Inc., the
Subsidiary Guarantors and The Bank of New York, Successor to United States Trust Company of
New York, as trustee.
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(8) [4.6.3] |
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4.6.4
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Fourth Supplemental Indenture dated as of December 17, 2004 among RAM Energy, Inc., The
Bank of New York, Successor to United States Trust Company of New York, as trustee, RWG
Energy, Inc., WG Operating, Inc., WG Royalty Company, Wise County Construction Company, LLC,
and WG Pipeline LLC, as Additional Subsidiary Guarantors.
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(8) [4.6.4] |
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10.1
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Form of Stock Escrow Agreement between the Registrant, Continental Stock Transfer &
Trust Company and the Initial Stockholders.
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(2) [10.6] |
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10.2
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Form of Registration Rights Agreement among the Registrant and the Initial Stockholders.
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(2) [10.9] |
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10.2.1
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Amendment to Registration Rights Agreement among this Registrant and the Founders dated
May 8, 2006.
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(1) [10.9.1] |
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10.3
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Agreement and Plan of Merger dated October 20, 2005 among Registrant, RAM Acquisition,
Inc., RAM Energy, Inc. and the Stockholders of RAM Energy, Inc.
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(3) [10.11] |
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10.3.1
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Amendment No. 1, dated November 11, 2005, to Agreement and Plan of Merger dated October
20, 2005 among the Registrant, RAM Acquisition, Inc., RAM Energy, Inc. and the Stockholders
of RAM Energy, Inc.
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(4) [10.11] |
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10.3.2
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Amendment No. 2, dated February 15, 2006, to Agreement and Plan of Merger dated October
20, 2005 among the Registrant, RAM Acquisition, Inc., RAM Energy, Inc. and the Stockholders
of RAM Energy, Inc.
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(6) [10.11] |
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10.4
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Voting Agreement dated October 20, 2005 among the Registrant, the stockholders of RAM Energy, Inc. and certain security holders of the
Registrant.
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(3) [10.2] |
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10.4.1
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Second Amended and Restated Voting Agreement included as Annex D of the Registrants Definitive Proxy Statement (No. 000-50682), dated
April 10, 2006 and incorporated by reference herein.
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(5) [Annex D] |
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10.5
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Lock-Up Agreement dated October 20, 2005 executed by the stockholders of RAM Energy, Inc.
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(3) [10.4] |
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10.6
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Employment Agreement between Registrant and Larry E. Lee dated May 8, 2006.*
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(1) [10.15] |
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10.6.1
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First Amendment to Employment Agreement between Registrant and Larry E. Lee dated
October 18, 2006. *
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(9) [10.1] |
31
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10.6.2
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Second Amendment to Employment Agreement of Larry E. Lee dated February 25, 2008.*
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(17) [10.6.2] |
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10.6.3
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Third Amendment to Employment Agreement of Larry E. Lee, dated December 30, 2008.*
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(20) [10.6.3] |
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10.6.4
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Fourth Amendment to Employment Agreement of Larry E. Lee dated March 24, 2009.*
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(21) [10.6.4] |
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10.7
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Escrow Agreement by and among the Registrant, Larry E. Lee and Continental Stock
Transfer & Trust Company dated May 8, 2006.
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(1) [10.16] |
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10.8
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Registration Rights Agreement among Registrant and the investors signatory thereto dated
May 8, 2006.*
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(1) [10.17] |
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10.9
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Form of Registration Rights Agreement among the Registrant and the Investors party thereto.
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(3) [10.17] |
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10.10
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Agreement between RAM and Shell Trading-US dated February 1, 2006.
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(1) [10.22] |
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10.11
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Agreement between RAM and Targa dated January 30, 1998.
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(1) [10.23] |
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10.11.1
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Amendment to Agreement between RAM Energy and Targa dated effective as of April 1, 2006,
filed as an exhibit to Registrants Form 8-K dated June 5, 2006 and incorporated by reference
herein.
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(10) [10.23.1] |
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10.12
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Long-Term Incentive Plan of the Registrant. Included as Annex C of the Registrants
Definitive Proxy Statement (No. 000-50682), dated April 12, 2006 and incorporated by reference
herein.*
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(5) [Annex C] |
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10.12.1
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First Amendment to RAM Energy Resources, Inc. 2006 Long-Term Incentive Plan effective May
8, 2008.*
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(18) [Exhibit A] |
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10.13
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Third Amended and Restated Loan Agreement dated as of April 3, 2006, between RAM Energy,
Inc., the lenders described therein, Guggenheim Corporate Funding, LLC as the Arranger and
Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation Agent, and WESTLB AG,
New York Branch, as the Syndication Agent.
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(11) [10.14] |
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10.13.1
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First Amendment to Third Amended and Restated Loan Agreement between RAM Energy, Inc., the
lenders described therein, Guggenheim Corporate Funding, LLC, as the Arranger and
Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation Agent, and WEST LB AG,
New York Branch, as the Syndication Agent, dated as of August 8, 2007.
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(14) [10.13.1] |
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10.14
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Deferred Bonus Compensation Plan of RAM Energy, Inc. dated as of April 21, 2004.*
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(12) [10.14] |
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10.15
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Purchase and Sale Agreement dated May 10, 2007 between Layton Enterprises, Inc. and the
Registrant (exhibits and schedules intentionally omitted).
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(14) [10.15] |
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10.16
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Agreement and Plan of Merger dated October 16, 2007 among RAM Energy Resources
Corporation, Ascent Energy Inc. and Ascent Acquisition Corp.
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(15) [2.1] |
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10.17
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Loan Agreement dated November 29, 2007, by and between RAM Energy Resources, Inc.,
as Borrower, and Guggenheim Corporate Funding, LLC, as the Arranger and Administrative
Agent, Wells Fargo Foothill, Inc., as the Documentation Agent and WestLB AG, New York
Branch and CIT Capital USA Inc., as the Co-Syndication Agents, and the financial
institutions named therein as the Lenders.
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(16) [10.1] |
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10.17.1
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First Amendment to Loan Agreement dated November 29, 2007, by and between RAM Energy
Resources, Inc., as Borrower, and Guggenheim Corporate Funding, LLC, as the Arranger
and Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation Agent and
WestLB AG, New York Branch and CIT Capital USA Inc., as the Co-Syndication Agents, and
the financial institutions named therein as the Lenders.
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(22) [10.17.1] |
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10.17.2
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Second Amendment to Loan Agreement dated November 29, 2007, by and between RAM Energy
Resources, Inc., as Borrower, and Guggenheim Corporate Funding, LLC, as the Arranger
and Administrative Agent, Wells Fargo Foothill, Inc., as the Documentation Agent and
WestLB AG, New York Branch and CIT Capital USA Inc., as the Co-Syndication Agents, and
the financial institutions named therein as the Lenders.
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(23)[10.17.2] |
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10.18
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Description of Compensation Arrangement with G. Les Austin.*
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(19) [10.18] |
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10.18.1
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First Amendment to Employment Agreement of G. Les Austin, dated December 30, 2008.*
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(20) [10.18.1] |
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10.19
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Change in Control Separation Benefit Plan of RAM Energy Resources, Inc. and
Participating Subsidiaries.*
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(22) [10.19] |
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31.1
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Rule 13(A) 14(A) Certification of our Principal Executive Officer.
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** |
32
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31.2
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Rule 13(A) 14(A) Certification of our Principal Financial Officer.
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** |
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32.1
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Section 1350 Certification of our Principal Executive Officer.
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** |
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32.2
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Section 1350 Certification of our Principal Financial Officer.
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** |
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* |
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Management contract or compensatory plan or arrangement. |
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** |
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Filed herewith. |
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(1) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K filed on May 12, 2006, as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(2) |
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Filed as an exhibit to the Registrants Registration Statement on
Form S-1 (SEC File No. 333-113583) as the exhibit number
indicated in brackets and incorporated by reference herein. |
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(3) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K filed on October 26, 2005, as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(4) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K filed on November 14, 2005, as the exhibit number indicated
in brackets and incorporated by reference herein. |
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(5) |
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Included as an annex to the Registrants Definitive Proxy
Statement (No. 000-50682), dated April 12, 2006, as the annex
letter indicated in brackets and incorporated by reference
herein. |
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(6) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K filed on February 21, 2006, as the exhibit number indicated
in brackets and incorporated by reference herein. |
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(7) |
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Filed as an exhibit to the Registration Statement on Form S-1
(SEC File No. 333-42641) of RAM Energy, Inc., as the exhibit
number indicated in brackets and incorporated by reference
herein. |
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(8) |
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Filed as an exhibit to the Registrants Quarterly Report on Form
10-Q filed on August 14, 2006, as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(9) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K on October 20, 2006, as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(10) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K on June 5, 2006, as the exhibit number indicated in brackets
and incorporated by reference herein. |
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(11) |
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Filed as an exhibit to Registrants amended Quarterly Report on
Form 10-Q/A filed on December 20, 2006, as the exhibit number
indicated in brackets and incorporated by reference herein. |
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(12) |
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Filed as an exhibit to the Registrants Registration Statement
on Form S-1 (SEC File No. 333-138922) as the exhibit number
indicated in brackets and incorporated by reference herein. |
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(13) |
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Filed as an exhibit to the Registrants Current Report on Form
8-K filed on February 2, 2007, as the exhibit number indicated
in brackets and incorporated by reference herein. |
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(14) |
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Filed as an exhibit to the Registrants Quarterly Report on Form
10-Q filed on August 10, 2007, as the exhibit number indicated
in brackets and incorporated by reference herein. |
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(15) |
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Filed as an exhibit to Registrants Form 8-K dated October 18,
2007 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(16) |
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Filed as an exhibit to Registrants Form 8-K dated November 29,
2007 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(17) |
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Filed as an exhibit to Registrants Form 8-K dated February 26,
2008 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(18) |
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Filed as an exhibit to Registrants Definitive Proxy Statement
(No. 000-50682) dated April 14, 2008, as the exhibit number
indicated in the brackets and incorporated herein by reference. |
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(19) |
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Filed as an exhibit to the Registrants Quarterly Report on Form
10-Q filed on May 9, 2008, as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(20) |
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Filed as an exhibit to Registrants Form 8-K filed January 5,
2009 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(21) |
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Filed as an exhibit to Registrants Form 8-K filed March 25,
2009 as the exhibit number indicated in brackets and
incorporated by reference herein. |
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(22) |
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Filed as an exhibit to Registrants Annual Report on Form 10-K
filed on March 12, 2009 as the exhibit number indicated in
brackets and incorporated by reference herein. |
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(23) |
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Filed as an exhibit to Registrants Form 8-K filed July 2, 2009
as the exhibit number indicated in brackets and incorporated by
reference herein. |
33