Ramco Raises Funds Through Lansdowne Stake Sale

Ramco Energy plc has raised £2.61 million (before expenses) through the sale of a proportion of its shareholding in its AIM listed subsidiary, Lansdowne Oil & Gas plc ("Lansdowne").

The long-running Tenge lawsuit, which finally ended in Ramco's favor in April 2007, has drained the Ramco's cash reserves and with no prospect of any meaningful recovery of costs under the Texas legal system it was important to secure funding to allow Ramco to accelerate its recovery.

The Board have agreed the following package of arrangements with LC Capital Master Fund, Ltd ("LC"), a company incorporated in the Cayman Islands. LC currently holds a 4.86-percent interest in Ramco. The funding structure was selected in order to avoid significant dilution to existing Ramco shareholders.

LC has purchased from Ramco's wholly owned subsidiary, Ramco Hibernia Limited ("RHL"), 5,225,000 existing shares in Lansdowne at 50p per share. This sale realised £2.61 million in cash (before expenses) for Ramco and reduces RHL's holding in Lansdowne to 61.1 per cent. of the issued share capital. LC now holds 25.1 per cent. of Lansdowne's issued share capital.

RHL has also granted LC an option over its remaining 12,728,308 shares in Lansdowne. The option can be exercised in whole or part up to 26 June 2010 at an exercise price equivalent to the average of the closing price of a share in Lansdowne for the 20 days prior to the date of exercise ("the Option"). At any given time within the exercise period, LC cannot exercise the Option in part over less than 3,000,000 Lansdowne shares.

In normal circumstances, the granting of the Option would result in LC incurring an obligation under Rule 9 of the Takeover Code to make a general offer to the shareholders of Lansdowne. However, as Ramco will hold more than 50 percent. of the voting rights of Lansdowne, the Panel have granted LC a dispensation from the obligation to make a general offer at the time of grant of the Option. Furthermore, the Panel has agreed with LC that in the event that LC exercises the Option in whole or part and / or Ramco ceases to hold more than 50 percent of Lansdowne during the exercise period of the Option, LC will be required to make a general offer under Rule 9 of the Takeover Code at a price the higher of 55.5p (the current mid-market price) and the highest price paid for any Lansdowne shares acquired through the exercise of the Option.

LC has also been granted 5,000,000 warrants over new ordinary shares in the capital of Ramco, such warrants having an expiry date of 26 June 2012 and an exercise price of 14p per share. It is also proposed that a representative of LC will join the board of Lansdowne shortly.

The closing of these funding arrangements is a significant post balance sheet event to Ramco's 2006 accounts and Ramco now expect to announce its preliminary results for the year ended 31 December 2006 on 27 June 2007.