Acquisition

14 May 2008 07:30



Ramco Energy plc 

("Ramco" or the "Company")

ACQUISITION OF A PORTFOLIO OF NORTH SEA ROYALTY INTERESTS AND TECHNICAL CONSULTANCY AGREEMENT CONCLUDED

Ramco, the Aberdeen-based exploration company, is pleased to announce that it has acquired Eagle HC Limited ("Eagle") for an initial consideration of £1.25 million to be satisfied in Ramco shares. Eagle owns a portfolio of North Sea royalty interests that were accumulated by Exploration Geosciences Limited ("EGL").  Ramco has also appointed EGL as its technical consultants.

Highlights:

Eagle owns royalty interests across 9 North Sea licences on the UK continental shelf ("UKCS")

Eagle's royalty portfolio will provide Ramco with exposure to the North Sea whilst requiring no funding

EGL is a leading provider of innovative exploration proposals and acreage acquisition strategies

EGL will provide geological and geophysical support to Ramco's existing assets, the newly acquired royalty portfolio as well as identifying new areas for exploration activity outside of the North Sea

Mark Groves Gidney, Managing Director of EGL will join the Ramco Board as a Non-Executive Director

Consideration

The initial consideration for the acquisition of Eagle will be settled in two stages. Firstly, through the immediate issue of 943,396 new shares of 10p each in Ramco at yesterday's closing mid-market price of 26.5p per share which will satisfy £250,000 of the initial consideration, followed by a further issue of new Ramco shares satisfying the balance of the initial consideration (i.e. £1 million) at the average closing mid-market price for the nine business days following the announcement of Ramco's preliminary results for the year ended 31 December 2007. 

Further consideration of up to £1 million will become payable in the future if certain milestones are reached, £0.5 million becomes payable by Ramco upon the spudding of the next well on the royalty acreage and a further £0.5 million when cash flow from the royalty portfolio commences. All such contingent consideration can be settled at Ramco's option, either in cash or through the issue of new shares in Ramco at the average closing mid-market price for the 15 business days immediately prior to the issue of the shares.

Eagle

Eagle owns royalty interests in nine North Sea licences covering 14 blocks, the royalties are summarised in the appendix to this announcement. The portfolio includes a royalty over UKCS block 21/8 within which the 21/8-3 well was, in late 2007, announced as a discovery by Lundin, the operator of that licence. A further well is scheduled to be spudded on that acreage in the second quarter of this year, with the intention of proving commercial reserves. Also included in the portfolio is a royalty interest in UKCS block 15/18a, operated by Petro-Canada, where well 15/18a-12 encountered oil and gas in the Maria prospect earlier this year.

Technical Consultancy

The portfolio of royalties held by Eagle was assembled by the principal shareholders of Exploration Geosciences Limited ("EGL"). EGL, based in Kent, is an established and successful provider of innovative exploration proposals and acreage acquisition strategies throughout the world. Over the last few years EGL has been instrumental in helping formulate successful exploration/appraisal strategies in the UK, Libya and Canada. EGL has today been appointed by Ramco as its technical consultant under a two year consultancy contract.

EGL will provide geological and geophysical support to Ramco's existing assets and the newly acquired royalty portfolio and will help identify areas for new exploration activity outside the UK, focussing particularly on those areas with a low entry cost.

Non-Executive Director

New Shares

Application will be made for the 943,396 new Ramco shares issued as the first instalment of the initial consideration for the acquisition to be admitted to trading on the AIM Market and dealings are expected to commence on AIM on 20 May 2007. Following admission of such shares, the issued share capital of the Company will be 37,831,211 shares.

Steve Remp, Chairman of Ramco, said:

"I am delighted to have acquired an initial exposure to the North Sea in a manner that does not require future funding by the Company and to have someone with Mark's extensive technical experience joining the Ramco board. I am also pleased to have secured access to the experience and skill base of EGL and look forward to their support in helping Ramco accelerate its future exploration and appraisal plans." 

14 May 2008

Summary of Royalties

Licence	Operator	Blocks	Royalty
P 1089	Oilexco	14/28a & 14/29b	0.54%
P 1107	Lundin	21/8	0.54%
P 1109	Lundin	21/14 & 21/15b	0.54%
P 1125	Lundin	30/23a,30/27a, & 30/28	0.54%
P 1129	Lundin	41/5 & 41/10a	0.54%
P 1295	Oilexco	14/23b	0.54%
P 1301	Lundin	12/17b	1.33%
P 1397	Endeavour	12/23a	1.33%
P 233	Petro-Canada	15/18a	0.25% *

* 1% royalty granted by holders of a 25% interest in the licence.

ENQUIRIES:

Ramco Energy plc
Steven Bertram	Managing Director	01224 748480
John East & Partners Limited
David Worlidge		020 7628 2200
College Hill
Nick Elwes		020 7457 2020

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