Ramco Energy Sells 2.0825% Stake in Azeri Chirag Gunashli (ACG) Field to Amerada Hess for $150 Million

Ramco Energy, a UK-based oil and gas company, has reached an agreement with Amerada Hess Corporation for the sale of its 2.0825% carried interest in the Azeri Chirag Gunashli (ACG) field, offshore Azerbaijan. The deal involves a total cash payment of $150 million, payable in four tranches over three years, with interest. As part of the agreement, Ramco and Amerada Hess will also form a strategic alliance, giving Amerada Hess the first opportunity to partner Ramco in its oil and gas projects.

This transaction marks a significant milestone for Ramco Energy, as it has always stated its intention to monetize its assets at the right time. The sale of the ACG stake will enhance the company's balance sheet and position it for future growth. The cash proceeds from the sale will be used to advance the development of other projects within Ramco's portfolio and to identify new opportunities.

Key Takeaways:

• Ramco Energy will receive $150 million in cash, payable in four tranches over three years, with interest, in exchange for its 2.0825% stake in the ACG field.
• Amerada Hess will acquire the stake and form a strategic alliance with Ramco, giving it the first opportunity to partner Ramco in its oil and gas projects.
• The deal will enhance Ramco's balance sheet and strengthen its financial position, allowing the company to pursue new opportunities and retain larger percentages in its projects.
• The cash consideration will be used to advance the development of other projects within Ramco's portfolio and to identify new opportunities.
• The effective date for the transfer of the economic interest in the Production Sharing Agreement (PSA) is September 30, 1999.
• Ramco's strategy is to identify exploration and production projects in which the company can partner major industry players, and the deal will give the company the opportunity to retain larger percentages in its projects.

Statistics:

• $150 million: The total cash consideration paid by Amerada Hess to Ramco Energy.
• 2.0825%: The percentage of stake in the ACG field being sold by Ramco Energy to Amerada Hess.
• $55 million: The first tranche of $55 million to be paid on completion.
• $45 million: The second tranche of $45 million to be paid on or before the first anniversary of completion.
• $45 million: The third tranche of $45 million to be paid on or before the second anniversary of completion.
• $5 million: The final tranche of $5 million to be paid in the event that the ACG Steering Committee approves expansion of the field's development programme.
• LIBOR + 0.3%: The interest rate payable on the second and third tranches every six months.

Sources:

• PRNewswire, July 17
• Ramco Energy plc, "Ramco Energy Sells Stake in Azeri Chirag Gunashli (ACG) Field to Amerada Hess Corporation for $150 Million"
• Ramco Energy plc, Press Release, July 17