Ramco Energy Establishes Oil & Gas Production in the Czech Republic

Ramco Energy, the independent Aberdeen, UK energy company focused on the Caspian region and central and eastern Europe, has confirmed that it has commenced production from the Krumvir-2 well in the Karlin License Area in the Czech Republic. Ramco drilled Krumvir-2 in late 1997 and has now put the well on long-term production test at restricted rates of 2.0 million cf/d gas and 150 b/d oil (approximately 500 boe/d) representing first production cash flow to Ramco. A further well in the Krumvir area is expected to be drilled later this year.

The Karlin Block is a joint venture between Medusa Oil & Gas (48%), a subsidiary of Ramco, and Moravske Naftove Doly (MND) (52%), the now privatized former state oil and gas company. Gas production from the Krumvir-2 well is being tied into the local pipeline grid, where it is being sold at approximately $2.30 per mcf. The oil is transported to MND's local facilities at Luzice where it is combined with MND's other production and sold under long-term contract to OMV of Austria, at a price close to Brent. Total operating and transport costs are $1.60 boe/d for the well.

Krumvir-2 is located within the Karlin licenses, approximately 30 km to the southeast of Brno, and 100 km northeast of Vienna. The Karlin licenses, which contain the Krumvir-2 discovery, have been the subject of a major geological study during the past year.

Steve Remp, Chairman and Chief Executive of Ramco, said, "The production from Krumvir-2 represents early cash flow to Ramco from its eastern European activities. Whilst initial production is modest, the low costs and existing local infrastructure and markets make this a significant step forward for Ramco."