Shares of RAM Energy Resources Inc. (RAME), an independent oil and natural gas company, rose 9.63% in the after hours trading session after the company announced improvements to certain financial benchmarks and liquidity at the end of the third quarter and the company's outlook for the fourth quarter.
The Tulsa, Oklahoma-based company stated that based on RAM's preliminary estimates of capital expenditures made during the third quarter 2008, a total of about $31 million was spent, composed of $22 million allocated to exploitation and development activities and about $9 million for acquisitions.
As of September 30, the company's long-term debt totaled about $246 million, while cash and cash equivalents on the balance sheet aggregated to an estimated $7 million, for a net debt position of about $239 million, largely unchanged from the net debt level of $237 million recorded at June 30, 2008.
RAM Energy noted that the current credit facility is composed of a term loan of $113 million, which matures in 4.2 years, and a revolving credit agreement of $175 million, with current borrowings outstanding of $133 million, which matures in 3.2 years.
The company further said it expects that the strength of its balance sheet as evidenced by its current liquidity and the existing term of credit agreements provides flexibility and stability during the current financial market uncertainties.
Based on RAM's assumed price outlook for oil, natural gas liquids and natural gas and its previously issued second half production guidance, which RAM recently confirmed, the company expects to be able to fund the majority if not all of its estimated fourth quarter non-acquisition capital budget of about $18 million through internally generated cash flow, excluding anticipated proceeds from divestitures.
Larry Lee, Chairman and CEO commented, "Our non-acquisition capital budget for the 2008 year was set with the anticipation that it would be funded largely, if not entirely, from internally generated cash flow and we have succeeded in executing our business plan while reducing our debt to total capital ratio thus maintaining a strong financial position."
RAM Energy closed Friday's trading session at $2.18. In the after hours session, the stock traded at $2.39, up 21 cents or 9.63%. For the past 52-weeks, the stock has been trading between $2.11 and $6.84.
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