Ramco Increases Stake in Seven Heads Field
Ramco Energy is increasing its interest in the Seven Heads Gas Field offshore Ireland. Ramco is exercising an option to increase its interest in the project through the conversion of a £3.3 million loan made to Island Petroleum Developments Limited (IPDL), one of its partners in the project. On completion, Ramco's interest in the Seven Heads Gas Lease Undertaking will increase from 49% to 56.5%. The terms of the conversion were agreed at the time the loan was first advanced in July 2001, prior to the drilling of the successful appraisal well 48/24-5A.
The recent appraisal well's location was 3.5km from the nearest of the earlier wells drilled on the structure and tested at 13.7 mmscf/d of gas. These results, together with subsequent detailed technical work have significantly enhanced the understanding of the distribution and continuity of the reservoir and have increased Ramco's confidence in the commerciality of the Seven Heads Gas Field. This in turn has led Ramco to exercise the option to increase its interest.
In addition to an increased interest in Seven Heads Gas, under the terms of the transaction, Ramco will also receive an additional 10% interest in the nearby Galley Head prospect and 150,000 shares in IPDL (approximately 2%). Additionally, Ramco will transfer to IPDL a 5% interest in the Seven Heads oil prospect, which lies beneath the gas reservoir and is the subject of a separate licence application with the Irish authorities. Ramco will retain a 44% stake in the oil prospect. The transaction is conditional upon the consent of the Seven Heads and Galley Head partners and the approval of the Petroleum Affairs Division of the Ministry of Marine and Natural Resources, Republic of Ireland.
Following completion of the transaction the interests in the Seven Heads Gas Lease Undertaking will be: Ramco (56.5%); Duke Energy Services Ireland Ltd (Duke) (26%); IPDL (12.5%); Sunningdale Oils (Ireland) Ltd (Sunningdale) (1%) and Northern Exploration Ltd (Northern) (4%). In the Galley Head area: Ramco (70%); IPDL (22%); Sunningdale (1.6%) and Northern (6.4%), and in the Seven Heads Oil application Ramco (44%); Duke (26%); IPDL (25%); Sunningdale (1%) and Northern (4%).