A potential buyer has approached Ramco, the troubled Scottish explorer with a number of offshore Irish interests.

Following an increase in its share price yesterday, Ramco released a statement saying that it had received an approach that "may or may not" lead to an offer for the company.

"These discussions are progressing but there is no certainty that a formal offer will result," it said. "Shareholders are recommended to take no action at this stage."

A spokesman last night said that Ramco was not in a position to comment any further. There was no indication of the potential bidder's identity.

During trading on London's Alternative Investment Market (AIM) yesterday, the shares surged 48 per cent to 58p, before slipping back to close at 56.5p.

Ramco has been seeking a lifeline since early last year when it emerged that production from the Seven Heads field it operates off the south coast had fallen more than five million cubic feet a day below the 60 million cubic feet a day it was then obliged to supply under its contracts. It had to make up the shortfall by buying gas on the open market.

Seven Heads is Ramco's largest interest. After production began to fall below expectations last year, it carried out a geological review. This discovered structural difficulties in the well that can only be remedied by further drilling. In October, it adjusted its supply contract to match the amount it can deliver and expects to produce two billion cubic feet this year.

Last week it announced that it had farmed out its interest in an oil exploration prospect in Monte Negro in the Balkans to Greek operator Hellenic. Ramco has the option of retaking a share after Hellenic finishes its first drilling programme. If it does not opt back in, Hellenic will compensate it for the costs it incurred there.

It has also farmed out part of its interest in a number of exploration blocks in Bulgaria.

Last month, Ramco announced that it was joining forces with a number of other operators, including Island Petroleum and Petroceltic, on an exploration venture off the Donegal coast.