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Market: AIM
Sector: Energy
EPIC: PET
Latest Price: 8.63p  (0,00%)
52-week High: 30.25p
52-week Low: 5.63p
Market Cap: 6.62M
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Petrel Resources
www.petrelresources.com
Petrel Resources is an Irish and London listed oil Exploration Company that listed on the Alternative Investment Market in August 2000. The focus of the Company's operations is in Iraq, where it has been seeking an agreement to develop three existing oil fields in Southern Iraq while applying for exploration acreage in the Western Desert.

Petrel have had a presence in Baghdad for years and have successfully built a strong Iraqi and international team and negotiated with the Iraqi Oil Ministry including the first and largest contract awarded since 2003. As part of the regional cooperation and the technical work that has been undertaken in the region, our staff has gained knowledge of the petroleum systems of the Arabian Peninsula and this has led to the pursuit of select opportunities in neighbouring countries.
Full Petrel Resources profile here
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Petrel Resources settles Iraq issues

26th Apr 2010, 8:45 am Petrel Resources settles Iraq issues

Petrel Resources (AIM: PET) has cleared the way for its expansion in Iraq, returning its attention to its primary field of expertise – oil exploration. Petrel today announced it has resolved all the outstanding issues in relation to the Subba and Luhais oilfield development, with a new deal struck between Petrel, Makham - its Iraqi partner - and the Iraqi Ministry of Oil.

After twenty months in hiatus, the Subba and Luhais oilfield development in Southern Iraq is set to re-start shortly. And through the new deal Petrel will receive a total cash payment of US$7m and, crucially, it will retain a 10% profit-share from the two oilfields whilst having no further liability or exposure to the project.

Investors on London AIM market have embraced the news as shares surged over 40% in early trading, reaching 40p per share.

The company has already received the first cash payment of US$2m, and the remaining US$5m is expected through scheduled payments, in two tranches over 12 months.

“Petrel now passes primary responsibility for the final phases of work to our Iraqi partners.  We have effectively swapped Petrel's 50% holding for a 10% profit interest.  This removes all uncertainty from the contract”, Petrel MD David Horgan commented.

“Petrel is an oil explorer, not a services contractor, so we are pleased to be able to refocus on growing our exploration interests in Iraq, which in our opinion remains the world's best oil province."

In a note to investors, London-based stockbroker Astaire Securities noted that Petrel will be relieved to have reached a settlement and the US$7m cash payments leaves the balance sheet in much better shape, as the company shifts its focus on winning E&P contracts in Iraq.

Horgan highlighted that this successful resolution, against a challenging background, reflects the goodwill and determination of both the authorities and its Iraqi partners, to overcome all obstacles in realising Iraq's great potential.

Going forward, the Petrel/Makman joint venture will now complete the oilfield development, with Makman assuming primary responsibility for the final phases of the work, including bulks procurement and implementation. With no further liability for the Subba and Luhais fields, Petrel will now turn its attention to exploring the oil-rich region.

Petrel was initially established in the nineteen-eighties and it has long been a fixture of the AIM market after it joined the LSE’s junior market from the old OFEX market in 2000.

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