The sale process for the gas field commenced in July 2005 and was co-ordinated by Ernst & Young as part of a waiver agreement with Ramco's lenders. Marathon was the successful bidder in a competitive tender process.
All of the proceeds of the sale, after costs, flow to Ramco's lenders and retire sums due to the lenders. The loans had been secured against the interest in the gas field as a part of the finance package entered into in April 2003, to help fund the development of the gas field.
In the six months to June 30, 2005 Ramco's interest in the gas field recorded a profit of £1.8m before an associated interest charge of £2.6m. As previously reported, the carrying value of the interest in the gas field had been reduced to nil following the recognition of an impairment provision.
Marathon will now serve as operator of the gas field. They also take over the decommissioning liability relating to the 86.5% interest in the field and all other remaining project related parent company guarantees.
Stephen Remp, Ramco's Executive Chairman said:
"The sale of our interest in the Seven Heads Gas Field represents a significant and positive step for Ramco. The transaction removes potential liabilities associated with the project and allows us to draw a line in the sand. Having reached a settlement with our lenders we can now focus on the next stage of the strategy, to create value from our exploration portfolio. We are largely carried through this year's work program which includes the drilling of an exploration well on the Donegal acreage, scheduled for summer this year. We are ready to begin moving forward again."
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