Independent energy company RAM Energy Resources Inc. (Nasdaq: RAME) today announced its improvements to certain financial benchmarks and liquidity at the end of the third quarter, as well as its expectations for the fourth quarter. The company said it successfully met its goals for the quarter and is maintaining a solid financial position.
For the nine-month period ended September 30, 2008, RAM’s non-acquisition expenditures were funded internally. As of September 30, long-term debt was approximately $246 million, while cash and cash equivalents were estimated at $7 million, up slightly from $237 million posted in June 2008.
At the end of the third quarter, RAM borrowed $246 million under its borrowing base of $288 million. This leaves approximately $42 million of immediately available funds under the existing credit facility, which is composed of a $113 million term loan maturing in 4.2 years, as well as a revolving credit agreement of $175 million, with current borrowings outstanding at $133 million, which matures in 3.2 years.
“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,” Larry Lee, chairman and CEO stated in the press release.
Current economic conditions are leading many businesses to take proactive and preventative measures, and the company anticipates the strength of its balance sheet will give cushion it through “flexibility and stability during the current financial market uncertainties.”
RAM’s non-acquisition capital budget for 2008, announced in December 2007, was at $80 million. Through the nine months, RAM spent approximately $62 million on basic operations such as exploration, exploitation and development activities; another $10 million was spent on acquisitions of production, reserves and pipeline assets.
In the press release, the company declared generated proceeds of approximately $1 million. Based on industry outlooks and pricing, RAM expects to fund its upcoming estimated fourth quarter non-acquisition capital budget of approximately $18 million through internally generated cash flow, excluding anticipated proceeds from divestitures.
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