RAM Energy
Resources, Inc.
July 2006
Who is RAM Energy Resources?
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RAM has been actively engaged in exploration and production
activities since 1987, as a private company.
RAM merged with Tremisis, a publicly held “Specified Purpose
Acquisition” corporation as a means of becoming a public entity.
- Merger effective May 8, 2006
- RAM contributed oil and gas assets and liabilities, Tremisis
contributed an existing publicly held entity
- Merger provides increased access to capital markets to
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support growth
RAM is listed on Nasdaq, traded under symbol RAME
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Investment Highlights
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Excellent fundamentals of Oil & Gas Industry
Experienced management team with successful track record
Balanced growth strategy
High quality, diversified portfolio of long-lived producing assets
Large inventory of PUD drilling locations and recompletion
projects
Growth potential in unconventional resource plays
Attractive valuation
3
Proven Reserves and
Production Growth
Reserves
Production
Four Year CAGR: 25%
Four Year CAGR: 84%
8.4
2002
18.8
Thousands of BOE
Millions of BOE
19.1
8.1
2003
2004
(1)
2005
(2)
1,405
671
495
2002
(1) Results are affected by acquisitions and dispositions during each of the periods.
(2) As of December 31, 2005
2003
511
2004
(1)
2005
(1)(2)
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Drilling/Recompletion Projects
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Six year inventory of development drilling and recompletions
Potential multi-year inventory of Barnett Shale locations
Proved Reserves
PUD Locations
Recompletions
Total Proved
Barnett Shale Locations
Total Projects
As of December 31, 2005
Projects
Future
Capital
230
184
($ millions)
$38.9
5.9
414
44.8
124
55.8
538
$100.6
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Drilling Success Rate
2005
Wells
Total Wells (1)
Drilled 1987-2005
Producers
Dry Holes
Drilling or Completing
At Year-End
66
0
428
36
1
1
Total
67
465
Success Ratio
(1) Gross wells drilled
(2) Excluding wells in progress
(2)
100%
92%
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Areas of Operations
Tulsa Office
Houston-District Office
Electra-Field Office
I
II
A
B
IV
Resource Areas
A
Barnett Shale –
Fort Worth Basin
B
Barnett & Woodford Shale Reeves County, TX
III
Principal Fields
I
Electra/Burkburnett
II Boonsville
III Egan
IV Vinegarone
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2006 Non-Acquisition Capital
Budget $24.3 million
Exploitation
Exploration
17.7
$ Millions
11.9
6.6
1.6
2005
(1)
2006
(1) Non-acquisition capital expenditures in 2005 totaled $15.0 MM, composed of $13.5 MM for exploitation and exploration
activities, and $1.5 MM for facilities and equipment.
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Electra/Burkburnett Area, Wichita and
Wilbarger Counties,Texas
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Net monthly production of over
58,375 BOE from 504 producers
20 Wells drilled in 1Q06, 14 of
which completed as producers,
remaining 5 completing
200 identified PUD drilling
locations
100% WI ownership & operational
control
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Gas plant and gathering
system
Proved reserves of 9,802
MBOE
PV-10% = $182.9 million(1)
(1) At year-end 2005
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Boonsville Area, Jack and Wise Counties, Texas
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Net monthly production of
over 14,670 BOE from 114
producers
22 identified drilling
locations and numerous
low-cost workovers
Operating control of 114
producing wells
Producing wells hold
Barnett Shale rights
25 miles of gas gathering
system
Proved reserves of 3,011
MBOE
PV-10% = $43.4 million(1)
(1) At year-end 2005
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Egan Field, Acadia Parish, Louisiana
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Net monthly production of
over 7,050 BOE from 10
producers
Multizone recompletion
potential in 10 existing
wellbores
Operating and ownership
control of field
Proved reserves of 1,652
MBOE
PV-10% = $38.7 million(1)
(1) At year-end 2005
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Vinegarone Field, Val Verde County, Texas
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Net monthly production of over
4,385 BOE from 7 non-operated
producers
7 identified infill wells to be
drilled; operator to spud first of 3
wells in 3Q06
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Long-lived natural gas field
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Proved reserves of 1,111 MBOE
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PV-10% = $21.5 million(1)
(1) At year-end 2005
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Principal Fields Account for Over 80% of
Total Proved Reserves
Property:
Proved Reserves
PV-10%
(millions of BOE)
($ millions)
Electra/Burkburnett
9.8
$182.9
Boonsville
3.0
43.4
Egan
1.6
38.7
Vinegarone
1.1
21.5
Total
15.5
$286.5
Percent of total proved
reserves
83%
83%
As of December 31, 2005
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Unconventional Resource Areas
• Barnett Shale - Fort Worth Basin, Jack and Wise
Counties, Texas
• Barnett and Woodford Shale - Exploration Project,
Reeves County, Texas
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Barnett Shale - Jack and
Wise Counties, Texas
Jack Co.
Wise Co.
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EOG Resources
Ashe #1 well
Chief Oil & Gas
5 Operated wells
*Per Pickering Energy Partners, Inc. October 2005 titled “The
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Own WI ranging from 23-36% in the
27,700 gross acres lying within a 43
square mile area
124 locations identified for
horizontal drilling on HBP leasehold
Ashe #1 well, operated by EOG
recently completed with initial daily
production of 1.9 mmcfe
Expect another well to spud in late
2Q bringing to 9 the number of wells
in which RAM has an interest
Drilling increased year-end 2005 PV10 value to $10.5 MM vs. $1.5 MM
year-end 2004
Current proved reserves exclude
any Barnett Shale probable reserves
Over 80% of the acreage lies in
“core” area*
Barnett Shale, Visitors Guide to the Hottest Gas Play in the
US”
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Barnett and Woodford Shale
Reeves County, Texas
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J. Cleo Thompson
1 well drilled
Alpine Area
3 wells drilled
Exploration play - 11,000 net
(70,000 gross) acres
Estimated thickness of the Barnett
is between 400’-700’ and the
Woodford varies from 200’-400’
Capital risk minimized through
third-party drilling commitments
to earn farmout agreements
Keys to success are horizontal
drilling and fracture stimulation
Four wells drilled under farmout
agreements:
3-D seismic shot over 10 square
mile area
Participating interests range from
6.25-18.75%
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Reserve Value at Year-End 2005
Future
Net
Revenues
Reserves
(1)
PV-10%
(millions BOE)
($ millions) (2)
($ millions) (3) (4)
13.2
$454
$245
Undeveloped
5.6
209
100
Total Proved
18.8
$663
$345
Developed
(1) Reserves as of December 31, 2005
(2) Future net revenues of reserves, before income tax
(3) Assumed prices for oil, gas and NGLs follow SEC prescribed methodology;
Oil = $58.63/Bbl, Gas = $9.14/Mcf and NGL = $35.89/Bbl
(4) Future net revenues of reserves discounted at 10 percent, before income tax
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Proved Reserves at Year-End 2005
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Total proved reserves: 18.8 MMBOE
70% of total reserves are proved developed
Balanced hydrocarbon mix of 60% oil, 40% gas
30%
40%
60%
70%
Developed
Oil
PUD
Natural Gas & NGL’s
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Summary Financial and Operating Data
3 Year
(2)
(1)
1Q2006
CAGR
2003
2004
2005
671
511
1,405
41%
318
Revenue
(millions)
$20.1
$18.0
$66.2
85%
$16.8
EBITDAX
(millions)
$9.1
$5.1
$33.7
59%
$9.9
Production
(MBOE)
(1) CAGR is compound annual growth rate for the three year period ended 12/31/05
(2) In late 2005, the vesting of an outstanding back-in interest in favor of a non-operating
partner occurred, effectively reducing 1Q06 production by 22,100 BOE
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Financial Flexibility
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March 31, 2006
Long-term Debt
($ millions)
11.5% Sr. Note
(1)
Sr. Secured Credit Facility
Installment Loan
Total
Cash & Equivalents
Net Debt
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$28.3
83.2
0.6
112.1
1.1
$111.0
New $300 million Sr. Secured Credit Facility with initial
borrowing limit of $140 million provides expanded financial
flexibility for growth
(1) Due 2008
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Attractive Valuation vs. Peers
TEV/Reserves ($/BOE)
TEV/PV-10 (2)
Reserve Life Index (in Years)
% Proved Developed
Net Asset Value per Share
Price/NAV
(3)
RAM
Peers
$16.80
.9x
13.4
70.0
$23.8
5 1.2x
13.7
55.0
(1)
$7.02
0.88x
(1) Peers include ABP, BEXP, CRZO, CRK, CWEI, EPEX, GDP, PLLL
(2) PV-10 is based on YE 2005 proved reserves and prices as reported by RAM and Peers
(3) NAV is based on PV-10% of proved reserves and pricing at December 31, 2005 and does
not include RAM’s unproved reserves or oil and gas gathering and processing assets;
also does not include exercise of outstanding warrants
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Investment Highlights
•
•
•
•
•
•
•
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Excellent fundamentals of Oil & Gas Industry
Experienced management team with successful track record
Balanced growth strategy
High quality, diversified portfolio of long-lived producing assets
Large inventory of PUD drilling locations and recompletion
projects
Growth potential in unconventional resource plays
Increased access to capital markets
Attractive valuation
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Disclosure Statement
This document contains forward-looking statements within the meaning of Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of
1934, as amended. All statements, other than statements of historical fact, including, without
limitation, statements that address estimates of RAM’s proved reserves of oil, gas and
natural gas liquids, future production, prices, realizations and costs, exploration activities,
capital spending, borrowing availability, financial position, business strategy, plans and
RAM’s management’s objectives and its future operations, and industry conditions, are
forward-looking statements. Although RAM believes that the expectations reflected in such
forward-looking statements are reasonable, RAM can give no assurance that such
expectations will prove to be correct. Important factors that could cause actual results to
differ materially from RAM’s expectations (“Cautionary Statements”) include, without
limitation, the actual quantities of RAM’s oil and natural gas reserves, future production
levels, future prices and demand for oil and natural gas, the results of RAM’s future
exploration and development activities, future operating, development costs and future
acquisitions, the effect of existing and future laws and governmental regulations (including
those pertaining to the environment), the continued availability of capital and financing, and
the political and economic climate of the United States as well as risk factors listed from time
to time in our reports and documents filed with the SEC. All subsequent written and oral
forward-looking statements attributable to RAM, or persons acting on RAM’s behalf, are
expressly qualified in their entirety by the Cautionary Statements.
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RAM Energy
Resources, Inc.
APPENDIX
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Production Volumes and
Expenses
Quarter Ended
March 31,
2005
2006
Increase
(Decrease)
(in thousands, except per unit amounts)
Production volumes:
Oil and condensate (MBbls)
Natural gas liquids (MBbls)
Natural gas (MMcf)
Total (Mboe)
Expenses (per Boe):
Oil and natural gas production taxes
Oil and natural gas production expenses
Amortization of full-cost pool
General and administrative
206
49
584
352
$2.17
$10.51
$8.21
$5.85
187
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600
318
$2.55
$13.54
$9.50
$6.16
-9.10%
-36.40%
2.80%
-9.60%
17.50%
28.80%
15.70%
5.30%
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Average Realized Prices
Before/After Hedging
Quarter Ended
March 31,
2005
2006
Increase
(Decrease)
(in thousands, except per unit amounts)
Average realized prices (before effects
of hedging):
Oil and condensate (per Bbl)
Natural gas liquids (per Bbl)
Natural gas (per Mcf)
Total per boe
$48.42
$31.12
$5.72
$42.13
$61.05
$39.02
$6.97
$52.85
26.10%
25.40%
21.70%
25.40%
Effect of settlement of hedging contracts:
Oil and condensate (per Bbl)
Natural gas liquids (per Bbl)
Natural gas (per Mcf)
$(2.73)
$ $0.13
$(5.07)
$ $(0.68)
85.70%
0.00%
-623.1%
Average realized prices (after effects of
hedging):
Oil and condensate (per Bbl)
Natural gas liquids (per Bbl)
Natural gas (per Mcf)
$45.69
$31.12
$5.85
$55.98
$39.02
$6.29
22.50%
25.40%
7.50%
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Hedging Positions
Crude Oil (Bbls)
Year
2006
2007
2008
Floors
per day
Price
1,500
$45.44
1,500
$52.67
800
$51.68
Bare Floors
2006
250
2006
2007
Ceilings
per day
Price
1,500
$66.73
1,500
$73.24
800
$86.72
Natural Gas (Mmbtu)
Floors
per day
Price
5,000
$6.29
4,247
$7.43
4,000
$7.16
Ceilings
per day
Price
5,000
$9.13
4,247
$11.62
4,000
$13.25
$40.00
Secondary Floors
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Secondary Floors
5,000
$9.50
4,000
$12.00
Natural gas Secondary floors for 2006 are for June thru October and 2007 are for April thru October, Natural gas floors/ceilings
and Oil floors/ceilings for 2008 are for January thru September.
As of March 31, 2006
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Non-GAAP
Financial Measure
Cash flow, a non-GAAP measure, represents cash provided by operating activities
before the impact of discontinued operations, changes in working capital items related
to operating activities, all exploration costs and further adjusted for unrealized gains or
losses on derivative transactions This non-GAAP measure is presented because
management believes it is a useful adjunct to cash provided by operating activities
under accounting principles generally accepted in the United States (GAAP). This nonGAAP cash flow measure is widely accepted as a financial indicator of an oil and gas
company’s ability to generate cash which is used to internally fund exploration and
development activities and to service debt. This non-GAAP measure is not a measure
of financial performance under GAAP and should not be considered as an alternative to
cash provided (used) by operating, investing, or financing activities as an indicator of
cash flows, or as a measure of liquidity.
EBITDAX is also presented below because of its wide acceptance by the investment
community as a financial indicator of a company’s ability to internally fund exploration
and development activities and to service or incur debt. Management also views the
non-GAAP measure of EBITDAX as a useful tool for comparison of the company’s
financial indicator with those of peer companies. EBITDAX should not be considered as
an alternative to net income or cash provided by operating activities, as defined by
GAAP. The following table reconciles cash provided by operating activities to cash flow
and EBITDAX (in thousands):
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Cash Flow & EBITDAX
March 31,
2006
(in thousands)
Net income (before effects of hedging)
Amortization and depreciation Oil and natural gas properties and equipment
Amortization of deferred loan costs and Senior notes discounted
Other property and equipment
Accretion expense
Loss on sale of other property and equipment
Deferred income taxes (before effects of hedging)
$1,406
3,023
353
190
133
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1,190
Cash flow (A Non-GAAP Measure), adjusted for effects of hedging
$6,322
Interest Expense
$3,529
EBITDAX (Non-GAAP Measure)
$9,861
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Unconventional Resource Area Barnett Shale Fort Worth Basin, Texas
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Core
Tier 1
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Located in Largest Natural gas
basin in Texas
Commercial production on this
acreage confirmed by extensive
drilling
1.1 Bcfed from over 3,600 wells
Wells: 4,000’ - 11,000’;
$400 M - $2,600 M
Major activity focused on
Denton, Wise, Tarrant,
Johnson and Parker Counties
Gas production established in
Hood, Jack, Erath and Palo
Pinto counties
Tier 2
Map Source: Pickering Energy Partners
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