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SEVEN HEADS PROBLEMS BEHIND EXPLORER'S ASSET SELLOFF
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IAN FORSYTH

09:00 - 21 December 2005
Ramco Energy encountered financial problems last year after the Seven Heads gas field offshore Ireland hit production problems.

The company revealed at the end of March 2004, that gas production from the location had fallen to fewer than 7,000 barrels of oil equivalent a day.

An operation to remove water from the field's wells had only led to a temporary improvement in wellhead pressures and production rates.

This summer, Ramco Energy's executive chairman Steve Remp paid tribute to his staff after 18 months of turmoil.

He said that the company had pulled through, thanks to teamwork and staff dedication.

Mr Remp's comments came as the firm published annual results which showed pre-tax losses of £3.3million on turnover that was up £16.1million at £36.9million in the year to December 31, 2004.

The losses were a significant improvement on the previous year when Ramco Energy plunged into the red to the tune of £104million.

It was the problems at Seven Heads which led to yesterday's sale of Ramco Oil Services.

Ramco Energy said the disposal meant it could repay the entire £12million loan it had secured against this business as a part of the finance package for the development of the troubled gas field.

The company's 85.6% interest in the field is also in the process of being sold.

Steven Bertram, managing director of Ramco Energy, said yesterday there was a preferred bidder, however, he did not disclose its identity or what the sale price could be.

He hoped this disposal could be wrapped up early next year, with the money raised going to clearing Ramco's Seven Heads debts.

Mr Bertram added that, following the sale of the gasfield stake, Ramco Energy would be focused on exploration.

A 3D seismic survey has begun in Bulgaria, while an exploration well off Ireland is targeted for the middle of next year.

Ramco Energy still has an interest in Montenegro, while the company will retain other acreage in the Seven Heads area.

Mr Bertram said the company's workforce would be reduced to about 15 following the sale of Ramco Oil Services, adding: "We are going to try and build the company up again."

Ramco Energy shares closed unchanged last night at 32p.