RAM Energy Resources, Inc. has reached agreement with Halcon Resources, LLC, a newly-formed company led by Floyd C. Wilson, former Chairman and Chief Executive Officer of Petrohawk Energy Corporation, for a transformational capital investment in RAM. The investment is comprised of $275 million in new common stock, a $275 million five-year convertible note, and warrants for the purchase of an additional 110 million shares of common stock. A majority of RAM's current shareholders have agreed to approve the transactions contemplated by the agreement through action by written consent of stockholders. The transaction is expected to close in the first quarter of 2012.

Larry E. Lee, co-founder, Chairman and Chief Executive Officer of RAM commented, "We view this as a tremendous opportunity for RAM and its shareholders. Floyd Wilson has an outstanding track record of successfully growing small cap E&P companies, such as RAM, into value-rich large cap enterprises, as demonstrated by his recent sale of Petrohawk to BHP Billiton for $15 billion. 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. Floyd and his team will lead the company as it expands in size and scope following the closing of this transaction."

Mr. Wilson will become the Chairman and Chief Executive Officer of RAM immediately following the closing of the transaction, and the Company's name will change to Halcon Resources Corporation.

Floyd C. Wilson, Chief Executive Officer of Halcon Resources, LLC stated, "We believe RAM provides a solid platform that when combined with this capital investment will enable the Company to quickly add reserves and production by targeting and drilling in liquids rich gas condensate and crude oil prone resource plays in the United States. We intend to draw upon our extensive experience and lessons learned from our past endeavors in an effort to maximize shareholder value."

Upon closing of the transaction, RAM will issue 220 million shares of common stock to Halcon, representing approximately 74% of RAM's pro forma outstanding common stock. The $275 million convertible note will bear interest at 8% per annum and may be converted by the holder into shares of common stock at any time subsequent to two years from the closing date, subject to earlier conversion under certain circumstances. The conversion price will be $1.50 per share, subject to adjustment upon certain events. The warrants will be exercisable for five years from the closing date at an exercise price of $1.50 per share, subject to adjustment upon certain events.

The investor group partnering with Halcon is led by EnCap Investments, L.P. and includes Liberty Energy Holdings LLC and Mansefeldt Investment Corp. Mitchell Energy Advisors represented Halcon, and Jefferies & Company, Inc. acted as advisor for RAM in the transaction.

Tags: RAM Energy Resources