SEA.L Regulatory News (SEA)

30 Jun 2005 08:15

Ramco Energy PLC30 June 2005 30th June 2005 Ramco Energy plc ("Ramco or the Company") Final audited results for the year ended 31 December 2004 Ramco, the Aberdeen based oil and gas exploration and production company, announces its final results for the year ended 31 December 2004. • Turnover of £36.9 million (2003 - £20.8 million)• Group operating profit of £598,000 (2003 - loss £105 million)• Cash balances in place of £3.3 million as at 31 December 2004 - further • £1 million raised post balance sheet• Oil services results exceeded expectations• Extended bank waiver agreements now in place• Ernst and Young appointed to assist in sale of 86.5% of Seven Heads gas field • Extension awarded to four Irish licensing options• Focus on exploration prospects in Ireland, Montenegro and Bulgaria• Process in place to be debt free by year end• Finalising 2006 drilling programme, through which Ramco is largely carried Steve Remp, Chairman of Ramco, commented: "After what has been a incredibly testing period in our history it is a credit to all those involved at Ramco that we are beginning to emerge re-juvenated and re-invigorated. We strongly believe that with the agreements we now have in place and the potential exploration programme for next year that the company is well placed to benefit from its new focus and strategy." ENQUIRIES: Ramco Energy - Aberdeen 01224 352 200Steve Remp, Executive Chairman Steven Bertram, Managing Director College Hill - London 020 7457 2020Nick Elwes Fleishman-Hillard Saunders - Dublin Michael Parker 00353 1 618 8450 Ramco Energy plc Final Results for the year ended 31 December 2004 Chairman's Statement Dear Shareholders, The past eighteen months have been an immensely difficult period in theCompany's history as a result of the huge challenges posed by the productionproblems in the Seven Heads gas field offshore Ireland - about which much has been written already. It doesn't really get much tougher than this and it is a tribute to our team that we have not only managed to survive, what to many companies would have been a terminal event, but have emerged with a turnaround plan in place based on an attractive portfolio of largely carried exploration interests, support from the Irish government, effective agreements entered into with the Company's lenders and £1 million of additional capital invested by existing shareholders. Financial ResultsGroup turnover for 2004 totalled £36.9 million, up from £20.8 million in 2003.This significant increase is attributable to gas sales from Seven Heads, which commenced in the last quarter of 2003. A group operating profit of £598,000 was recorded in 2004 compared to anoperating loss of £105 million in 2003. The 2003 results included exceptional items totalling £99 million, of which £93 million related to an impairment provision against the carrying value of our Seven Heads gas interest. An exceptional credit of £5.7 million has been recorded in 2004 reflecting theaccounting treatment of further depletion and impairment of Seven Heads borne by the non-recourse finance provider. Administrative expenses in 2004 fell to £1.4 million from £1.8 million in 2003,reflecting cost savings implemented following the problems at Seven Heads.Exchange losses also reduced to £103,000 from £686,000 in the previous year. Netinterest payable of £4.6 million was incurred compared with net interest incomeof £738,000 in 2003. The overall result, before tax, for the year is a loss of £3.3 million, a taxcharge of £91,000 takes the after tax loss up to £3.4 million, compared with£76.7 million in 2003 when we reflected the impairment provision against ourSeven Heads gas field. At 31 December 2004 Group cash balances were £3.3 million and since the year endwe have completed a placing of 3 million new shares at 34p raising £1 millionafter expenses. As previously announced we have recently reached extended waiveragreements with our Bankers and a major creditor. These agreements defer loanrepayments totalling £13.55 million to allow asset sales to be concluded, whichmay include some or all of the assets of the Oil Services division. Seven HeadsSince the start of October 2004, production from the Seven Heads gas field hasbeen profiled to allow greater volumes of gas to be produced and sold during thewinter months, when gas prices are generally at their peak. This profilingworked successfully over the winter and, as planned, production has now beenreduced to 4 mmscfd. Ernst and Young have recently been appointed to assist inthe sale of our 86.5% interest in this field. Exploration InterestsIreland:We continue to be enthusiastic about our exploration interests in Ireland whichinclude a Frontier Exploration Licence in the Donegal Basin, three Licensing Options where we are exploring for gas in the Celtic Sea, and our Seven Heads Oil Licensing Option. We believe there is substantial potential within these properties where the geology is fundamentally different from the Seven Heads gasfield. Ireland remains an outstanding market for both oil and gas with a stable and supportive government and an attractive fiscal regime. I believe that there is significant value to be gained from our continued participation in Irish exploration where we retain a strong, strategic position. An independent evaluation of our Donegal and Celtic Sea exploration propertieshas been completed by Scott Pickford. Their work confirms Ramco's estimates thatthe two largest structures on the Donegal block contain unrisked gas initiallyin place (GIIP) of 1,535 bcf and 791 bcf respectively. Scott Pickford's workalso confirms Ramco's unrisked GIIP estimate totalling 471 bcf for the CelticSea Licensing Options. Ramco's net interest in these unrisked GIIP estimatestotals 837 bcf. Ireland - Donegal BasinWe have worked over the last year to progress our Donegal acreage and thisculminated in the award in January 2005 of a Frontier Exploration Licence,covering an area of 101,000 acres. Within the first two years of the FrontierLicence, an exploration well will be drilled to test the Triassic SherwoodSandstone reservoir in the large Inishbeg Prospect, which lies in water depth ofaround 320ft. Ramco has entered into a farm-out agreement and will be carriedthrough the costs of the first well retaining a 19.25% interest. The SherwoodSandstone is the productive reservoir in the Corrib Gas Field, which lies ontrend to the southwest, and is currently under development. There are alsoadditional follow-on opportunities on the acreage, which will be addressed ifthere are encouraging results from the Inishbeg well. Ireland - Celtic SeaWork has continued throughout the year on our Midleton, Rosscarbery and EastKinsale Licensing Options and is now in the final stages. The recently grantedextensions to these Licensing Options allow us until the end of the year to decide which of the prospects merits drilling. Ireland - Seven Heads OilGeological and reservoir engineering studies are nearing completion on the oilaccumulations lying between 4,500ft and 7,500ft beneath the Seven Heads gas field. Ramco's share of costs has been carried by Island Oil and Gas plc, who also have the option to carry Ramco through the drilling of an appraisal well toearn a 44.4% interest, leaving Ramco with 29.6%. BulgariaTogether with our partner and operator, Anschutz, we announced in January thatwe had farmed-out our A-Lovech licence to Chimimport JSC of Bulgaria. The A-Lovech block lies approximately 80 km to the north east of Sofia and covers 3,558 sq km. Chimimport will earn a 45% interest in the acreage by completing 570 sq km of 3D seismic. The seismic acquisition programme is aimed at multiple geological targets and will commence later this year. Once the seismic is completed the interests in the acreage will be Chimimport 45%, Anschutz 44% and Ramco 11%. Following completion of a number of geophysical and geological studies over the past few years, the licence area continues to increase in attractiveness, with both oil and gas prospects. The proximity of this block to major gas pipeline infrastructure is significant since it would facilitate the rapid development of any gas discovery into a network linking several East European countries. Assuming positive results from the new 3D seismic, it is likely that the partnership will drill during 2006. MontenegroIn a recent restructuring agreement with Hellenic Petroleum SA (Hellenic) ofGreece, Ramco agreed to exchange its interests in Montenegro for an option torejoin the acreage after the first exploration well is completed. Following thedrilling of an exploration well on the acreage Ramco will have 120 days to electto rejoin the acreage for an interest of up to 15% in all of the blocks. Ramco'spast costs in Montenegro will be taken into consideration in the calculation ofthe exercise price for the interest in the event that we elect to exercise theoption. Oil ServicesResults from the Oil Services division exceeded our expectations for the year asa result of improved performance from our pipe coating joint venture, a fullyear's trading at our pipe-cleaning unit in Japan and increased activity within our Norwegian operations. Our Badentoy operations, covering both logistics and tubular cleaning andcoating, performed satisfactorily and marginally exceeded expectations. Sincethe year end this location has benefited from a three year extension to acleaning and logistics contract with BP. Both our Norwegian plants in Stavanger and Floro performed well during 2004 withrevenues and contributions at these locations ahead of expectations for theyear. Work at both locations is secured under contract with key customers untillate 2005 and early 2006. Our Japanese facility, which had been shut down for much of 2002 and 2003,enjoyed a full year's operations in 2004 as a result of strong demand for thetype of pipe produced at the mill in Japan where our plant is based. Our pipe coating joint venture in Hartlepool had a successful year and completedcoating contracts for pipelines in West Africa, the Caribbean and the MiddleEast, together with projects in the UK for Shell, BP and Venture Petroleum.During the latter part of 2004 the joint venture upgraded its Hartlepoolstockyards and completed the transfer of Transco's strategic and surplus pipestocks to this new storage facility. In future our joint venture will managethis inventory along with new material receipts and the issue of pipe stock toproject locations. This inventory management concept is similar to the type of contractsuccessfully undertaken for North Sea customers by our Tubular ServicesDivision. We expect to see a continued and steady improvement in tubular activity levelsover the coming year where our long term contract and call-off arrangements witha wide range of customers will serve to support our Badentoy plant and logisticsoperations. On the pipeline side of the business, we started 2005 with a strong order bookwith work on projects for both the UK and overseas. In addition we will benefitfrom a full year's turnover from the logistics operations which now supportTransco pipe projects. LitigationThe appeal and related proceedings arising from the judgement awarded to AngloDutch in the Texas State Court continue. The 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. Proceedings wereraised by Anglo Dutch in the Court of Session, Edinburgh, with a view to enforcing the Texas judgement in Scotland, but further procedure has been suspended, pending the review by the Texas Court of Appeals of an order fixing the amount of a bond which, if lodged by Ramco in Houston, would suspend any enforcement. OutlookIt's extremely encouraging for us now to have in sight a solution to theproblems created by Seven Heads. Our strategy, through the process agreed withour Bankers is to seek buyers for our interest in the Seven Heads gas field andsome of our other assets. The objective is to be debt free by the end of 2005,and participating in a drilling program in 2006 through which Ramco is largelycarried, greatly reducing financial commitments. The team is re-energised and Iwish to thank them for their "true grit" during the past year. It is a privilegefor me to be leading that group forward. Ramco Energy plc Final Results Consolidated Profit and Loss Account Audited For the year ended 31 December 2004 2004 2003 Note £'000 £'000----------------------------------------------------------------------------Turnover - Group and share of joint venture and associates 40,574 23,873Less share of joint venture and associates (3,641) (3,041)----------------------------------------------------------------------------Group turnover 1 36,933 20,832----------------------------------------------------------------------------Cost of sales before exceptional items (40,525) (24,249)Exceptional items 2 5,714 (99,174)----------------------------------------------------------------------------Cost of sales after exceptional items (34,811)(123,423)----------------------------------------------------------------------------Gross profit/(loss) 2,122 (102,591)Administrative expenses (1,421) (1,778)Loss on exchange (103) (686)----------------------------------------------------------------------------Group operating profit/(loss) 598 (105,055)Investment income - 3Share of operating profit in joint venture and associates 681 219----------------------------------------------------------------------------Profit/(loss) before interest and taxation 1,279 (104,833)Net interest (payable)/receivable (4,565) 738----------------------------------------------------------------------------Loss on ordinary activities before taxation 1 (3,286)(104,095)Tax (charge) / credit on loss on ordinary activities 3 (91) 27,404----------------------------------------------------------------------------Retained loss for the financial year 8 (3,377) (76,691)----------------------------------------------------------------------------Loss per ordinary share - basic and fully dilutedOn loss for the financial year 4 (11.2)p (278.2)p---------------------------------------------------------------------------- The results relate to continuing operations. There is no material difference between the loss on ordinary activities beforetaxation and the retained loss for the year stated above, and their historicalcost equivalents. Consolidated Statement of Total Recognised Gains and Losses For the year ended 31 December 2004 2004 2003 £'000 £'000-----------------------------------------------------------------------------Loss for the financial year (3,377) (76,691)Unrealised translation differences on foreign currency net investments 16 (35)------------------------------------------------------------------------------Total recognised losses relating to the year (3,361) (76,726)------------------------------------------------------------------------------ Balance Sheets Audited As at 31 December 2004 Group Company 2004 2003 2004 2003 Note £'000 £'000 £'000 £'000--------------------------------------------------------------------------------Fixed assetsIntangible assets 5 5,906 4,536 - - Other tangible fixed assets 6 16,706 72,782 1,654 1,820Investments ----------------------------------- Share of joint venture's gross assets 2,575 2,266 - - Share of joint venture's gross liabilities (1,503) (1,164) - - ----------------------------------- Share of joint venture's net assets 1,072 1,102 - - In subsidiaries - - 3,000 3,000 In associated undertakings 80 26 - - Other fixed asset investments 2 102 2 102 -----------------------------------Total investments 1,154 1,230 3,002 3,102 -------------------------------------------------------------------------------- 23,766 78,548 4,656 4,922--------------------------------------------------------------------------------Current AssetsStocks 2,331 2,265 - - Debtors: amounts falling due within one year 5,203 7,393 2,279 4,160Cash at bank and in hand 3,265 3,287 119 2,125-------------------------------------------------------------------------------- 10,799 12,945 2,398 6,285Creditors: amounts falling due within one year (24,808)(28,070) (760) (807)--------------------------------------------------------------------------------Net current (liabilities)/assets (14,009)(15,125) 1,638 5,478--------------------------------------------------------------------------------Total assets less current liabilities 9,757 63,423 6,294 10,400Creditors: amounts falling due aftermore than one year 7 - (50,055) - - Provisions for liabilities and charges (5,274) (5,466) (38) (38)--------------------------------------------------------------------------------Net assets 4,483 7,902 6,256 10,362--------------------------------------------------------------------------------Capital and reservesCalled up share capital 3,014 3,014 3,014 3,014Share premium account 68,576 68,576 68,576 68,576Revaluation reserve 752 810 - 41 Other reserves (21) (37) - - Profit and loss account 8 (67,838)(64,461)(65,334) (61,269)--------------------------------------------------------------------------------Equity shareholders' funds 9 4,483 7,902 6,256 10,362-------------------------------------------------------------------------------- Consolidated Cash Flow Statement Audited For the year ended 31 December 2004 2004 2003 Note £'000 £'000--------------------------------------------------------------------------------Net cash inflow from continuing operating activities 10(a) 6,728 4,177--------------------------------------------------------------------------------Returns on investments and servicing of financeInterest received 376 901Dividends received - 3 Interest paid (3,994) (615)--------------------------------------------------------------------------------Net cash (outflow)/inflow from returns on investments and servicing of finance (3,618) 289--------------------------------------------------------------------------------TaxationOverseas tax paid (170) (211)--------------------------------------------------------------------------------Taxation paid (170) (211)--------------------------------------------------------------------------------Capital expenditure and financial investmentPurchase of tangible fixed assets (86) (277)Sale of tangible fixed assets 54 18Oil & gas expenditure - intangible assets (1,370) (2,600)Oil & gas expenditure - development assets - (94,678)Oil & gas expenditure - producing assets (10,202) -Receipt of sale of investments 42 ---------------------------------------------------------------------------------Net cash outflow for capital expenditure and financial investment (11,562) (97,537)--------------------------------------------------------------------------------Cash outflow before management of liquid resources and financing (8,622) (93,282) Management of liquid resourcesNet transfer from term deposits - 14,184--------------------------------------------------------------------------------Net cash outflow before financing (8,622) (79,098)--------------------------------------------------------------------------------FinancingIssue of share capital - 12,560Increase in debt 8,600 60,000 --------------------------------------------------------------------------------Net cash inflow from financing 8,600 72,560-------------------------------------------------------------------------------- --------------------------------------------------------------------------------Decrease in cash 10(b) (22) (6,538)-------------------------------------------------------------------------------- Notes to the Financial Statements Audited For the year ended 31 December 2004 1. Segmental Reporting Oil & Gas Oil Services Total 2004 2003 2004 2003 2004 2003 £'000 £'000 £'000 £'000 £'000 £'000-------------------------------------------------------------------------------- Turnover 27,867 9,812 12,707 14,061 40,574 23,873Less joint venture and associates - - (3,641) (3,041) (3,641) (3,041)--------------------------------------------------------------------------------Group turnover 27,867 9,812 9,066 11,020 36,933 20,832-------------------------------------------------------------------------------- Operating profit/(loss)--------------------------------------------------------------------------------Group 729 (103,899) 2,074 1,527 2,803 (102,372)Less Joint venture and associates - (30) (681) (189) (681) (219) -------------------------------------------------------Group gross profit/(loss) 729 (103,929) 1,393 1,338 2,122 (102,591)Joint venture and associates - 30 681 189 681 219 -------------------------------------------------------- 729 (103,899) 2,074 1,527 2,803 (102,372)Administrative expenses (995) (1,245) (426) (533) (1,421) (1,778)Investment income - 3 - - - 3 (Loss)/gain on exchange (53) (706) (50) 20 (103) (686) --------------------------------------------------------(Loss)/profit before interest and taxation (319)(105,847) 1,598 1,014 1,279 (104,833)Net interest (4,565) 738 --------------------Loss before taxation (3,286) (104,095)-------------------------------------------------------------------------------- 2. Exceptional Items 2004 2003 £'000 £'000--------------------------------------------------------------------------------Impairment provision - Seven Heads 47,698 92,969Impairment borne by finance provider (53,412) -Exploration write off - Poland - 5,646Legal provision (note 11) - 559--------------------------------------------------------------------------------At 31 December (5,714) 99,174 -------------------------------------------------------------------------------- In accordance with the SORP further impairment in the carrying value of Seven Heads is being borne by the non-recourse finance provider, resulting in a net credit of £5.7 million. 3. Taxation The tax credit for 2003 included a credit of £27.8 million reflecting a release of the provision for tax on the profit that arose on the disposal of the Group's interest in the ACG field in Azerbaijan in 2000. The credit comprises £25 million of current tax and £2.8 million of deferred tax. Due to the loss arisingfrom the impairment of the Group's interest in the Seven Heads gas field, the tax liability is no longer expected to be payable. 4. Loss Per Share Basic and fully diluted loss per share The calculation of loss per share is based on the loss for the financial year of£3.4 million (2003 - loss £76.7 million) and 30,144,713 (2003 - 27,570,483) ordinary shares, being the weighted average number of ordinary shares in issue during the year. As a loss was recorded in both 2003 and 2004 the exercise of share options wouldnot have been dilutive and accordingly in each year the basic and fully diluted loss are the same. 5. Intangible Fixed Assets 2004 2003Cost and net book value £'000 £'000--------------------------------------------------------------------------------At 1 January 4,536 2,895Additions 1,370 2,600Costs written off - (959)--------------------------------------------------------------------------------At 31 December 5,906 4,536-------------------------------------------------------------------------------- 6. Other Tangible Fixed Assets 2004 2003Cost and net book value £'000 £'000--------------------------------------------------------------------------------At 1 January 72,782 12,343Retranslation 3 (11)Additions 1,347 268Transfer from development assets - 150,008 Decommissioning asset - 4,540 Disposals (91) (17)Depreciation (9,637) (1,380)Impairment (47,698) (92,969)--------------------------------------------------------------------------------At 31 December 16,706 72,782-------------------------------------------------------------------------------- 7. Creditors: Amounts Falling Due After More Than One Year 2004 2003 £'000 £'000--------------------------------------------------------------------------------Bank Loans - Main & mezzanine 68,415 60,055 - Unpaid gas price hedge 2,343 - - Unpaid interest on loan 2,329 - -------------------------------------------------------------------------------- 73,087 60,055Less: Impairment borne by finance provider (53,412) - -------------------------------------------------------------------------------- 19,675 60,055Amounts falling due within one year (19,675) (10,000)-------------------------------------------------------------------------------- - 50,055-------------------------------------------------------------------------------- 8. Profit and Loss account 2004 2003 £'000 £'000--------------------------------------------------------------------------------At 1 January (64,461) 12,230Loss for the year (3,377) (76,691)--------------------------------------------------------------------------------At 31 December (67,838) (64,461)-------------------------------------------------------------------------------- 9. Movement in Shareholders' Funds 2004 2003 £'000 £'000--------------------------------------------------------------------------------Loss for the financial year (3,377) (76,691)Other recognised gains and losses relating to the year 16 (35)Issue of ordinary share capital - 12,560Movement in revaluation (41) 41 Amortisation of deferred gain on asset sold to joint venture (17) (18)--------------------------------------------------------------------------------Net change in shareholders' funds (3,419) (64,143)Shareholders' funds at 1 January 7,902 72,045--------------------------------------------------------------------------------Shareholders' funds at 31 December 4,483 7,902-------------------------------------------------------------------------------- 10. Notes to Consolidated Cash Flow Statement(a) Reconciliation of operating profit/(loss) to net cash flow from continuingoperating activities 2004 2003 £'000 £'000--------------------------------------------------------------------------------Operating profit/(loss) 598 (105,055)Amounts written off in respect of intangible oil and gas assets - 959Amortisation of goodwill 30 30Depreciation on tangible fixed assets 9,637 1,380Loss on sale of tangible fixed assets 37 - Amortisation of deferred gain on asset sold to joint venture (18) (18)Increase in stocks (66) (1,823)Decrease in debtors 2,448 20,357Decrease in creditors (2,446) (5,251)Increase in other provisions 100 547Impairment provision 47,698 92,969Unpaid gas price hedges added to loan 2,343 - Impairment borne by finance provider (53,412) - Provision against investments - 34Exchange difference on retranslation (221) 48--------------------------------------------------------------------------------Net cash inflow from continuing operating activities 6,728 4,177-------------------------------------------------------------------------------- (b) Reconciliation of net cash flow to movements in net (debt)/funds 2004 2003 £'000 £'000-------------------------------------------------------------------------------- Decrease in cash in the year (22) (6,538)Cash inflow from increase in debt (8,600) (60,000)Revaluation of bank loan - exchange difference 240 (55)Impairment borne by finance provider 53,412 - Unpaid gas price hedges and interest on loan (4,672) - Cash inflow from decrease in liquid resources - (14,184)--------------------------------------------------------------------------------Change in net funds / (debt) resulting from cash flows 40,358 (80,777)-------------------------------------------------------------------------------- Net (debt)/funds at start of the yearCash at bank and in hand 3,287 9,825Short term deposits - 14,184Debt due within one year (10,000) - Debt due after one year (50,055) - -------------------------------------------------------------------------------- (56,768) 24,009--------------------------------------------------------------------------------Net debt at end of the year (16,410) (56,768)--------------------------------------------------------------------------------Represented by:Cash at bank and in hand 3,265 3,287Debt due within one year (19,675) (10,000)Debt due after one year - (50,055)-------------------------------------------------------------------------------- (16,410) (56,768)-------------------------------------------------------------------------------- Liquid resources represent short term deposits not qualifying as cash 11. Litigation 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 defendants in a case alleging breach of contract arising from confidentiality and non-circumvention obligations. These obligations had been undertaken while Ramco was considering investment in an oilfield development project in Kazakhstan which Ramco subsequently decided not to pursue. The principal elements of the judgement issued by the trial judge on 1 April 2004 were an award against Ramco for past and future damages of $6.4 million plus interest and legal fees of $9.8 million. The award of legal fees was made jointly and severally against Ramco and its co-defendant Halliburton. The plaintiff subsequently agreed settlement terms with Halliburton which has been dismissed from the case. The appeal and related proceedings arising from the judgement awarded to Anglo Dutch in the Texas State Court continue. The appeal and the plaintiff's 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. Proceedings raised by Anglo Dutch in the Court of Session, Edinburgh, with a view to enforcing the Texas judgement in Scotland, have been suspended pending the review by the Texas Court of Appeals of an order fixing the amount of a bond which, if lodged by Ramco in Houston, would suspend any enforcement. However, before that process was suspended the plaintiff served arrestments in Scotland, freezing approximately $200,000 of cash. Because of the uncertainty surrounding the range of possible outcomes, the Directors consider it is not possible to make a reliable estimate of the likely outcome of the appeal process beyond providing an estimate of the legal costs ofpursuing the appeals, and accordingly a provision of $1 million (£559,000) was made in 2003. £217,000 was utilised during 2004 leaving a remaining provision of£342,000. 12. Contingent Liabilities a) Ramco Energy plc granted a parent company guarantee in respect of its wholly owned subsidiary Medusa Oil and Gas Limited (Medusa) to Jugopetrol A.D. Kotor (JPK) on 11 February, 2003. The guarantee covers the obligations of Medusa arising from an agreement with JPK to carry out a specified work programme in connection with their interests in Montenegro. In February 2005 Ramco and Hellenic, JPK's parent company, restructured their relationship in Montenegro. One outcome of this restructuring is that, once approved by the Montenegro government, this guarantee will be released. b) Ramco Energy plc, on behalf of the Seven Heads co-venturers, has entered intoan agreement with Bord Gais Eireann ("BGE") to underwrite a proportion of the costs incurred by BGE in relation to the upgrade and refurbishment of the Midleton gas compressor station. The maximum liability under this agreement is €6 million but is reduced annually each October according to the amount of tariff revenue received by BGE from shippers of Seven Heads gas. Ramco have assessed their worst case liability at €5.0 million. The net present value of this liability is €2.8 million. In light of the expectation that the Seven Headsgas field will continue to produce gas for several more years no provision is currently considered necessary. 13. Post Balance Sheet Events a) In January 2005 Ramco Bulgaria Limited (RBL) agreed a farm out over its interest in the A-Lovech acreage onshore Bulgaria. Chimimport JSC, a Bulgarian company with a subsidiary specialising in seismic acquisition will earn 9% of RBL's interest in the acreage by completing a 570 sq km 3D Seismic survey, leaving RBL with an 11% interest. b) In January 2005 Ramco Donegal Limited ("RDL"), along with partners, was granted a Frontier Exploration Licence over 101,000 acres around 70km from the north west coast of Ireland. Subsequently, Island Oil and Gas plc and Petroceltic International plc agreed to farm in to the exploration licence by carrying dry hole and testing costs of an exploration well for RDL. Farm in agreements have been signed, and a Joint Operating Agreement is currently being drafted. c) In February 2005 Medusa (Montenegro) Limited and Medusa Oil & Gas Limited reached an agreement with Hellenic Petroleum SA ("Hellenic") to restructure their exploration interests in Montenegro. Through these subsidiaries Ramco helda 40% interest in three blocks in the Adriatic Sea and had undertaken certain obligations to fund an exploration well and other technical work. In the event that this drilling commitment was not concluded by 15 February 2005 Ramco would have been liable to pay a $3.0 million penalty to its partner Jugopetrol A.D. Kotor. Under the terms of the restructuring agreement Ramco have agreed to exchange their interests in all three blocks in return for Hellenic to undertakeRamco's obligations in relation to the blocks. Following the drilling of an exploration well on the acreage, Ramco will have 120 days to elect to rejoin theacreage with an interest of up to 15% in all of the blocks. Ramco's past costs in Montenegro will be taken into consideration in the calculation of the exercise price for the interest in the event that Ramco elect to exercise the back in option. Formal Government ratification of the deal with Hellenic has notyet been received. d) In June 2005 the Company completed the placing of 3,000,000 new ordinary shares of 10p each at an issue price of 34p per share. The placing raised £1 million net of expenses. 14. Comparative information The comparative financial information is based on statutory accounts for the year ended 31 December 2003. Those accounts, upon which the auditors have issuedan unqualified opinion, have been delivered to the Registrar of Companies. 15. Annual Report and Financial Statements The Annual Report and Financial Statements will be mailed to shareholders and isavailable from the company's website, www.ramco-plc.com This information is provided by RNS The company news service from the London Stock Exchange