The Seven Heads Oil Licensing Option covers part blocks 48/22, 48/23, 48/24, 48/27, 48/28, 48/29 & 48/30, the same area as the Seven Heads Gas Lease, but relates to oil discoveries in deeper Lower Cretaceous reservoirs, below the gas field.
Oil was initially discovered on these blocks by Esso in 1974 and tested 40 degree API oil at a rate of 1,527 barrels of oil per day (bopd). A subsequent appraisal well, drilled by Marathon in 1990 tested 45 degree API oil at 1,619 bopd.
Under the terms of the farm out option IAL will act as technical manager and will fund ROG's share of the current work program earning the option to farm in to the acreage. To exercise the option IAL must fund 100% of ROG's share of drilling an appraisal well to test the oil accumulation. On completion of the well IAL will have the right to acquire a 44.4% interest in the acreage, leaving ROG with an interest of 29.6%.
The current interests in Licensing Option 03/5 are: Ramco Oil & Gas Limited (Operator) 74%, Lundin Ireland Ltd 25% and Sunningdale Oils (Ireland) Limited 1%.
Ramco Energy plc has a 2.96% shareholding in IAL.
Seven Heads Gas Field Update
The ongoing technical review of the Seven Heads gas field is progressing and we anticipate making a detailed update statement to the Stock Exchange during the course of next week. This update will quantify what will be a substantial impairment provision against the carrying value of our investment in the Seven Heads gas field. The Company now expects to announce its preliminary results for 2003, which will reflect that impairment provision, during the early part of June.
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