SHARES in Ramco Energy surged 18-per cent after the beleaguered oil and gas firm added to its Irish interests a frontier exploration licence on which other firms would pick up the bills for the first well.
Investors appeared pleased that Ramco had agreed a lowcost way of potentially reducing the company's reliance on the troubled Seven Heads gas project offshore Ireland.
Aberdeen-based Ramco was left fighting for survival after output from Seven Heads plunged, leaving the company with massive debts it had taken on to fund that development.
As a result, news that the company and its partners had been granted a licence to explore a block offshore northwest Ireland, on which technical evaluation had identified a number of "drillable targets", was well received.
Bruce Evers, analyst at Investec, said it was unclear whether the area was prospective, but as two other firms have farmed into the acreage, in exchange for paying for one exploration well, the downside risks to Ramco appear to be minimal.
In the event of a big discovery on the licence, in which Ramco has 19-per cent, Steve Bertram, finance director, was confident Ramco would be able to raise equity funding to cover its share of development costs. He said Ramco had nothing to add to an update last month, when it said a review of the potential reserves at Seven Heads had produced an "extremely disappointing" result.
However, talks were continuing with third parties that might be prepared to fund the work needed to see if additional reserves could be produced.
Steve Remp, Ramco's executive chairman who recently returned to full-time work after undergoing "fully curative surgery" to remove a tumour, was not available for comment.
Shares closed up 5.5p at 35.5p.
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