Shares in Ramco fell another 21 per cent yesterday after the company disclosed worsening production problems at its Seven Heads gas field. The shares hit a new low of 86p (€1.30) after the company said that well head pressure continued to decline at its Irish Sea field.
Shares in the London quoted oil company collapsed to 109p from more than 400p in early February when details of the problems first surfaced. The shares had staged a modest recovery to around 120p before collapsing yesterday. The firm believes the problem relates to water build-up in the wells. The firm plans to remove the water through a process known as a "blow down" which will require shutting down the wells for five days.
The manoeuvre "will at least temporarily increase production rates and may be repeated periodically to clear water from the well bores until a permanent solution can be assessed", Ramco said.
The Aberdeen-based company began production only in December and has several Irish contracts. It is now forced to buy gas on the market to meet the contract to supply Innogy, the German-owned gas company that operates in the deregulated part of the Irish market.
Although it does not expect to incur a trading loss on buying the gas on the UK market, it will have to pay up to £3.7 million (€5.57 million) to transport it to the Republic. Ramco - which lost £1.4 million in the first six months of the year - is expected to report full-year figures this month.
