The additional capital raised will strengthen the Group's balance sheet and provide it with an alternative to the mezzanine finance available for the Seven Heads project. In addition, the funds will be used to evaluate Ramco's Celtic Sea acreage offshore Ireland near its Seven Heads gas development, including two new Licensing Options recently granted to Ramco's wholly owned subsidiary Ramco Oil & Gas Limited.
The two new Licensing Options, 03/6 (Rosscarbery - Ramco 77%) and 03/5 (Seven Heads Oil - Ramco 74%) together with Midleton (Ramco 100%) awarded in April 2003, form part of Ramco's strategy of building on its position in the Celtic Sea. Rosscarbery includes the area previously called Galley Head as well as the acreage between the Galley Head area and the Seven Heads Gas Lease. Through the development of the Seven Heads gas field, Ramco (86.5%) has built a strong knowledge of the regional geology, which has enabled it to identify a number of satellite structures capable of adding to its proven and probable reserves base in the region. Ramco has proven and probable reserves of 337 bcf or 59 million barrels of oil equivalent in Seven Heads.
The additional capital raised today will provide Ramco with the ability to move quickly to evaluate these satellite opportunities, acquiring seismic and completing other technical work on its Celtic Sea acreage next year. The possibility of satellite developments was considered at an early stage of the Seven Heads development and the sub-sea infrastructure installed this year has been designed to accommodate such satellite developments.
Ramco expects to have the Seven Heads gas field on stream during the course of November and is expecting, after a short commissioning period, initial production rates from the field of 60 million standard cubic feet of gas per day. While this is in line with the original fast track schedule for the development of Seven Heads, it is slightly later than had been anticipated due to delays on the Topsides modifications to the Kinsale "A" platform.
Dr. Steve Boldy, Ramco's Vice President Ireland said, "The acquisition of new Licensing Options is central to our strategy of building a material business in the Celtic Sea. The Rosscarbery acreage, along with the Midleton area awarded earlier this year, provides us with an excellent inventory of opportunities to allow us to build on the subsurface understanding gained from the Seven Heads gas development. The shallow water depths, shallow reservoir targets and proximity to existing infrastructure allow low cost exploration and rapid progression from project sanction to production as we have seen with the Seven Heads gas development."
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