Ramco Energy shares plummet

RAMCO ENERGY’S failure to solve gas production problems at its Seven Heads gas field off the Cork coast resulted in a 20%-plus loss in the value of its shares on the London Stock Exchange.

Since production problems arose in January, it has spent £3.7 million providing back-up gas supplies to its Irish customers.

The shares took a massive hit in late January when the Aberdeen-based exploration firm took the market by surprise and revealed it was having production problems at Seven Heads, adjacent to the Marathon-operated Kinsale field.

In January, Ramco fell from £3.72 to £1.645, a fall of 55.77% in one day. Yesterday, the shares opened at just £1.205, but fell 25.5p, 21.16% to just £0.95.

Ramco said yesterday that since their last announcement on February 6, well-head pressures have declined further; the average daily production rate from the field over the past 25 days of uninterrupted production was 44.4 mmscf/d, with production on March 1 at 40.4 mmscf/d.

The company said the technical team reviewing the Seven Heads’ reservoir has not completed its work.

“In consultation with our partners and Marathon, we are developing plans to embark on a diagnostic ‘blow-down’ programme which will involve all five of the Seven Heads wells being shut in. A temporary connection to the compressors on Marathon’s Kinsale A platform will then be used to reduce the pressure in the pipeline connecting Seven Heads to the platform.

“Once this has been done the Seven Heads wells will be reopened.”