Any experts around on Ramco?

So, quick summary is:

1 The Seven heads gas field estimated reserves remains the same
2 They have sold a guaranteed supply of gas under a GSA
3 Gas extraction targets are about 3mmscf/d down on what they predicted (5% or so)
4 Shortfall is being met by importing gas from the UK which is currently cheaper than the agreed sell on price under the GSA
5 They will incur transportation costs of 4,700 per day transporting the mainland gas making up the current shortfall.
6 The GSA can be re-worked in Sept. 04 to align with lower extraction volume
7 There is legal action over something very different that involves Ramco.

The risks over the next 8 months then are:

1 UK gas prices rising above their GSA agreed price (they can hedge this so risk is limited. Currently it is cheaper to buy UK gas so they can probably cover most of the hedging costs)
2 If the gas extraction rate falls further (this is the most serious risk and the one to focus on)
3 Transportation costs spiral if point 2 means extra gas from UK to make up the increased shortfall (it's incremental costs and plenty of capacity by sound of things)
4 They spend lots of cash trying to get to the root of the problem and never do
5 They spend lots of cash trying to solve the problem and never do
6 They end up sinking another bore and opening up a 6th sub-sea well which costs a lot of cash
7 That a 6th weel fails to deliver the shortfall

Legal action will not resolve itself in that timeframe so impact is considered negligible at this stage.

Doomsday stuff out the way they may actually solve their production problem which would be very interesting for the share price.

According to share mag the Seven Heads gas field is worth 3 quid a share. If the gas extraction volume remains relatively stable between now and September then it would seem that investors who bought in at the 3-4 quid mark have been punished. If gas extraction deteriorates significantly (let's say it becomes 25% shortfall of the GSA) then the price has a lot further to drop and it would be bail out time.

On balance, it seems an attractive share to have in a recovery portfolio but be prepared for the downside.

Ramco up 14% today

Happy to watch your prediction has come to fruition. Lets all hope for good news in May when price might recover. Good call HTW