Ramco Energy PLC 28 April 2005 28 April 2005 Ramco Energy plc ("Ramco") (or "the Company") Further Information on Ramco's Current Position and Board Changes The Board of Ramco announced on 22 April 2005 that, following an approach to the Company, which it announced on 21 February 2005, discussions with a prospective offeror had terminated. The preparation of the annual report and financial statements for 2004 was delayed in anticipation of the announcement of a possible offer for the entire issued share capital of the Company. The Board considers it appropriate to issue this announcement in order to provide shareholders with updated information on the current state of affairs of the Company in advance of the preliminary results for 2004 which it expects to announce in June. Seven Heads As announced on 14 January 2005, production from the Seven Heads gas field is being profiled to allow greater volumes of gas to be produced and sold during the winter months, when gas prices are generally at their peak. This profiling worked successfully over the winter and, as planned, production has now been reduced to 4 mmscfd. Options for funding a further work programme on the field in order to access additional gas reserves and improve production rates continue to be investigated. The Board continues to be in discussion with its bankers in relation to its repayment obligations and covenants under the Seven Heads credit facilities, and the banks have issued short term waivers to allow these discussions to be concluded. Whilst the majority of the £68.6m project loans are non-recourse and secured only against our interest in the gas field, a £12 million tranche of the facilities is guaranteed by Ramco Oil Services Limited ("ROSL") and secured by a pledge of the share capital of that company. Meanwhile, ROSL and its subsidiaries continue to perform satisfactorily and trade profitably. In addition, a sum of £1,550,000 is currently due and payable by a Ramco subsidiary to Schlumberger Offshore Services Limited in relation to services provided on the Seven Heads gas field, with such payment obligation being guaranteed by Ramco Energy plc. Constructive discussions are continuing with Schlumberger regarding a deferral of such payment but there is currently no waiver in place. Irish Gas Exploration Interests At the end of January 2005, Ramco announced the award of a Frontier Exploration Licence (1/05) offshore Donegal, covering 408 sq km (101,000 acres). Ramco will be carried through the drilling and testing costs of an exploration well to test the large, four way dip closed Triassic Inishbeg prospect. Upon completion Ramco will retain a 19.25% interest in the licence which also contains a number of other prospective structures. As part of the recent discussions with the prospective offeror, Ramco appointed appropriately qualified independent consultants Scott Pickford to complete a valuation of its exploration interests in the Donegal Basin. This report confirms Ramco's estimates that the two largest structures contain unrisked gas initially in place (GIIP) of 1535 bcf and 791 bcf respectively. Ramco's 19.25% interest in these two structures totals 448 bcf GIIP. During 2003 additional prospective acreage in the Cretaceous Gas Fairway of the North Celtic Sea was added to the Ramco portfolio. Interests in three licensing options over Rosscarbery, Midleton and East Kinsale were obtained. Unlike Seven Heads where the Cretaceous Wealden (B Sand) is the reservoir, these blocks target the Greensand (A Sand), the main producing interval in the Kinsale Field and the sole producing reservoir in the Ballycotton Field. Good quality Greensand reservoirs have already been proven in wells drilled in the Rosscarbery (48/18-1) and Midleton (49/11-1, 49/11-2) blocks and are interpreted to extend from the Kinsale Field into the East Kinsale area. The overall strategic objective is to identify gas prospects that, if successful, could be produced through a tie-back into the Seven Heads or Kinsale infrastructure. The proximity of the existing infrastructure means that even a modest gas discovery in the area could be commercially produced. The licensing options over Rosscarbery and Midleton have expired but applications for extension have been filed and discussions are continuing with the Petroleum Affairs Division with a view to agreeing forward work programmes. Other Exploration Interests The Company also continues to hold substantially carried interests, in exploration acreage, onshore Bulgaria and in the Seven Heads oil potential which underlies the gas field and an option to re-join acreage offshore Montenegro if a successful well is drilled. US Litigation As previously announced, following a jury verdict in October 2003, the Texas State Court issued a final judgement against Ramco Energy plc, Ramco Oil Limited and certain other non-Ramco defendants in a case brought by Anglo-Dutch (Tenge) L.L.C. and Anglo-Dutch Petroleum International, Inc., alleging breach of contract arising from confidentiality and non-circumvention obligations. Ramco has been advised that it has strong substantive grounds for appeal. That appeal and the plaintiffs' cross-appeal, to the Fourteenth Texas Court of Appeals were heard in Houston on 26 April 2005 and the court's decision is awaited. This process may be followed by a further appeal by either party to the Texas Supreme Court. On 16 November 2004 the plaintiffs served on Ramco Energy plc and Ramco Oil Limited a summons in a separate action in the Court of Session, Edinburgh, with a view to enforcing their Texas judgement in Scotland. Ramco filed a motion in the Texas State Court seeking leave to tender a monetary bond the acceptance of which by the Texas court will suspend the enforceability of the judgement and consequently suspend the plaintiffs' right to pursue proceedings in Scotland. The next hearing relative to this motion is scheduled for 29 April 2005. Board Changes Following the ending of discussions with the prospective offeror Ramco's non-executive directors Peter Everett (aged 73), Sir Malcolm Rifkind (aged 58) and Vikram Lall (aged 58) have resigned from the board effective 28 April 2005. Ramco is pleased to announce the appointment to the board of Dennis Paterson as a non-executive director with effect from 28 April 2005. Dennis (aged 53) has 30 years experience in the oil and gas industry. He started his career as a geologist with Gulf Oil and since then his positions have included principal negotiator with British Gas PLC, Managing Director British Gas (Malaysia) Ltd, Country General Manager BG plc Indonesia and Executive Vice President Genting Oil & Gas Ltd. Currently, Dennis is an independent oil and gas consultant, educated at the University of British Columbia and Imperial College, London; he holds no shares in Ramco. An additional prospective non-executive director has been identified and it is hoped that his appointment to the board can be confirmed in the near future. Strategy In light of the Seven Heads position, and to maximise shareholder value, the Board has defined a new strategy for the company that aims to capitalise on the strong exploration portfolio that the company holds. In future Ramco seeks to add value as a non-operating participant in high potential exploration and appraisal prospects. The Board of Ramco have initiated discussions with a view to securing additional financing to help support the Group through the ongoing discussions with its bankers and Schlumberger and to enable the creation of value from its interests in its' exploration properties, but the Board cannot give any assurance that such financing will be secured. Chairman's Remarks Ramco's chairman Steve Remp comments: "Although the failure of the recent discussions with the prospective offeror was disappointing, I am encouraged by the independent review of our Donegal acreage and the recently completed farm outs over that acreage and our acreage in Bulgaria and Montenegro. Notwithstanding the problems we have encountered with Seven Heads we continue to be positive about an Irish gas strategy." "The non-executive directors who are leaving us now have been a huge source of support over many years in both good times and more recently the difficult times following the disappointment of the Seven Heads gas project. I would like to take this opportunity to thank Peter, Malcolm and Vikram for their hard work and valued advice." ENQUIRIES: Ramco Energy - Aberdeen Steve Remp Executive Chairman 01224 352 200 College Hill - London Nick Elwes 020 7457 2020 Fleishman-Hillard Saunders - Dublin Michael Parker 00353 1 618 8450 Notes: List of Directorships Currently Held and Other Directorships Held in the Previous 5 Years Dennis Paterson Current Directorships None Dennis Paterson Past Directorships Held Within Last 5 Years None. There are no other matters to be disclosed in relation to Schedule 2 paragraph f of the AIM Rules. This information is provided by RNS The company news service from the London Stock Exchange