PRESS RELEASE
3 MARCH 2004
RAMCO SEVEN HEADS UPDATE
Ramco Energy plc, the Aberdeen based exploration and production company and Operator of the Seven Heads gas field in the Celtic Sea, announces an update for the field. Since our last announcement on February 6th, wellhead pressures have declined further; the average daily production rate from the field over the past 25 days of uninterrupted production was 44.4 mmscf/d, with production on March 1st at 40.4 mmscf/d.
The technical team reviewing the Seven Heads reservoir has not completed its work, but believes it is likely that water that has condensed from the gas and a small amount of formation water are building up in one or more of the well bores, thereby masking reservoir pressures and aggravating the decline in production.
In consultation with our partners and Marathon, we are developing plans to embark on a diagnostic "blow-down" programme which will involve all five of the Seven Heads wells being shut in. A temporary connection to the compressors on Marathon's Kinsale "A" platform will then be used to reduce the pressure in the pipeline connecting Seven Heads to the platform. Once this has been done the Seven Heads wells will be re-opened. This should result in a surge of production that will quickly remove any water that has built up in the well bores. The blow-down programme is currently scheduled to commence later this week and should take around five days to complete.
The data obtained during this process should allow an improved measurement of reservoir pressures, and will be invaluable in helping to determine the future deliverability and recoverable reserves of the field. It is anticipated that this process 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.
Longer term plans will be based on the data gained from the blow-down process and on final technical assessments. We are also investigating a permanent arrangement to access one of the three compressors already in place on the Kinsale platform which could be adapted to facilitate Seven Heads gas flows.
Ramco's Gas Sales Agreement volumes apply until the end of September 2004; thereafter Ramco can adjust nominations for the next gas year to better match the field's expected performance. Since the last announcement, Ramco has put additional back up transportation arrangements in place for the period ending September 30th 2004, which cover gross field production rates down to 35 mmscf/d. The total cost to Ramco for all of the back-up transportation arrangements now in place is £3.7 million.
A further announcement will follow the completion of the blow-down and assessment of the results.
The Seven Heads partners are Ramco (Operator) 86.5%, Island Petroleum Developments Limited 12.5% and Sunningdale Oils (Ireland) Limited 1.0%.
ENQUIRIES:
Ramco Energy - Aberdeen
Stephen Remp, Executive Chairman Tel: 01224 352200
Steven Bertram, Group Financial Director Tel: 01224 352 200
College Hill - London
James Henderson Tel: 0207 457 2020
Fleishman - Hilllard Saunders - Dublin
Michael Parker Tel: 00353 1 618 8450
Ramco Energy plc
62 Queen's Road
Aberdeen
AB15 4YE
United Kingdom
Tel: +44 1224 352 200
Fax: +44 1224 352 211