Takeover talk sees Ramco surge

SHARES in Ramco Energy surged nearly 50% yesterday after the troubled operator of the Seven Heads offshore gas field near Kinsale announced a potential takeover approach.

Ramco, whose shares are traded on the London Stock Exchange’s Alternative Investment Market, added 18½p to 56½p on news that the company was in talks with an unidentified buyer.

“These discussions are progressing but there is no certainty a formal offer will result,” a statement said.

The statement added more details would be available “in due course” but shareholders should “take no action at this stage”.

The news came a month after Ramco’s share price began to recover on the back of a rebound in the fortunes of the Seven Heads field. The share collapsed from a high of nearly £4.00 to just 20p in a few months, after positive signs from the field gave way to complex problems that meant gas would not flow at the rate originally envisaged.

The field was once expected to produce up to 15% of Ireland’s demand for gas, and create 300 jobs.

The venture’s viability came under threat as a result of the news, because Ramco was forced to buy gas in the market to honour its contracts. But this cost the company far more than it had planned.

The share price recovery began after an expert report found the company would have to drill additional holes to retrieve the level of gas it needed. Ramco said it would begin tapping new wells in May.

Yesterday’s jump will help cut the losses of shareholders who bought into Ramco near its peak. An investor who ploughed £10,000 (€14,500) into Ramco last year would have seen the value of the investment fall to a low of just £500. The same investment would now be worth £1,000.

Ramco also has interests in Poland, Bulgaria and Montenegro.