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UPDATE: Petroceltic expands Egyptian exploration acreage

Last updated: 13:51 09 Nov 2012 GMT, First published: 14:51 09 Nov 2012 GMT

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Petroceltic (LON:PCI) has added another project to its recently enlarged portfolio.

It is participating in a joint venture which was awarded the 'El Qa'a Plain' (or Block 12) project through a licence bidding round in Egypt.

Over the first four years the partners must acquire at least 450 square kilometres of 3D seismic data and drill one exploration well.

"We are delighted to have been awarded the El Qa'a Plain Block and believe the combination of Petroceltic, Dana and Beach will bring an outstanding combination of technical and operational skills to the exploration of this underexplored region,” said chief executive Brian O'Cathain.

“We have already identified a number of structures which we believe to be potentially prospective for oil and these will be the focus of our work in the first phase of the licence."

The block spans 1,824 square kilometres in the south of the Sinai peninsula, to the east of the Gulf of Suez.

The award has still to be ratified, though this expected to take place in the New Year.

Petroceltic has a 37.5% stake in the new venture alongside Dana Petroleum - now owned by the Korean National Oil Company - which also has 37.5% and Beach Petroleum with 25%.

Job Langroek, analyst at Dublin based broker Davy, says today’s news demonstrates how the activity level can be expected to build following the Melrose merger.

“This news is an incremental positive,” Langbroek said in a note to clients

“The company is expanding its portfolio in Egypt where it already has a substantial production profile, estimated at 77% of its 28,000 b/d forecast for 2012 on a gross basis.”

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