Rame investigates a sale along with other alternatives

[tracker]

6:55AM RAM Energy Resources announces review of strategic alternatives (RAME) 1.77 : Co announces that its Board of Directors has authorized management to investigate a broad range of strategic alternatives available to the co, including a sale, refinancing or recapitalization, all with a view to enhance shareholder value. RAME has engaged Jefferies & Company as its exclusive financial advisor to assist in this strategic review process.

[dan_s]

If you take a look at my Net Income and Cash Flow Forecast for Ram Energy (RAME) you will see that I calculate "Fair Value" at over $3/share. There is no telling how something like this will work out but it is a good sign that management believes the stock is grossly undervalued and that they are looking out for their shareholders. The daughters of one of the original founders now own a large chunk of the stock so they may be behind this move. Larry Lee, the other founder is the current CEO. I've met Larry and he seems to be a great guy. - Dan

TULSA, Okla. (AP) -- Ram Energy Resources said Tuesday that it is exploring the possible sale of the company along with other options.

The oil and natural gas company said other options include refinancing or recapitalization.

Any step is meant to boost the value of the company's shares, Ram said.

The company said it has hired Jefferies & Company as its adviser.

There has been no change to current business plans and Ram said it would continue with its drilling and development goals as outlined at the beginning of the year.

[europhia]

OOh, I'm excited to hear what happens here. I actually bought some Rame earlier this year!!

[dan_s]

I took a look at Ram's Balance Sheet this evening. It may be worth something north of $2.50/share but I wonder if they will get that. They do have a lot of debt that must be assumed. The good thing is that about 65% of their production is oil and ngls which are selling for a premium today.

$400 Million is my estimated PV10 value of their proven reserves
$100 Million for P2 + P3 + current assets
-307 Million in liabilities
$193 = net value
78 million shares
$2.47/per share value based on this crude estimate

If you take a look at my Net Income and Cash Flow forecast for Ram (under the Sweet 16 tab) you will see that my estimated "Fair Value" is $3.11 but that is Ram as a going concern.

All I'm saying here is that each member needs to decide how they want to play a special situation like this.

Dan

[setliff]

good points to consider, thx

jim