Ramco's Seven Heads gas field is significantly more compartmentalised than it had assumed, a comprehensive technical review has discovered.

The review was undertaken after gas flows at the Celtic Sea operation fell dramatically below expectations, forcing the company to purchase gas on the open market to fulfil contractual obligations.

The problems emerged just over a month after Ramco began production from the field off Kinsale in December 2003, sending the company's shares into freefall.

The review says the original interpretation that the Seven Heads field was "a single gas accumulation in a structure completely filled to the 'spill point'" has not proved to be the case.

Instead, the compartmentalised structure of the field means that each well is draining a "significantly smaller reservoir area than originally anticipated".

Ramco now estimates that around 19 billion cubic feet of gas are recoverable from existing wells in addition to the nine billion cubic feet produced to date.

Drilling additional wells could raise the recoverable reserves to around 83 billion cubic feet. "Whilst extremely disappointing, these figures are within the range of downside possibilities identified in the original Plan of Development," the company said in a statement yesterday.

The company said the review also indicated that substantial additional gas reserves could be present elsewhere in the field. However, it would require further investigation.

The company said that the results of the technical review had been assessed by the Government's Petroleum Affairs Division and by Ramco's bankers.

Ramco said the technical review confirmed that its decision to write off its interest in the field in last year's accounts - at a cost of £93 million (€132.7 million) - was "appropriate".