RAM Energy Resources, Inc. (RAM)has skyrocketed the past few days, and the big news here is that Floyd Wilson will become CEO of RAM Energy Resources. Keep in mind that Wilson was chairman and CEO of Petrohawk (HK) before that company was sold to BHP Billiton (BHP). Wilson is also investing big in RAM Energy Resources, and the deal includes $275 million of common stock, $275 million of convertible notes, and $110 million of warrants. Here’s what RAM Energy Resources founder, Larry Lee, hassaidabout the change in direction:
This investment will provide the company with the capital necessary to expand operations into new and emerging resource plays, as well as accelerate development of our Mississippian oil concession in Osage County, Oklahoma. It will also allow for the continued development of our major oil fields in Oklahoma and Texas.
Interestingly, RAM Energy Resources went up so much after this announcement that the firm Rodman & Renshaw decided to downgrade the stock to Market Perform. Outside of the recent transaction, cash flows for RAM have been mixed: $90,000 flowed out during 2010, but $10,000 flowed in during the first 9 months of 2011. That can be explained by RAM’s increased willingness to take on debt.