www.petroceltic.ie
Petroceltic is an upstream oil and gas exploration and production company with headquarters in Dublin, Ireland and with interests in Algeria, Kurdistan Region of Iraq, Italy and Ireland.
Petroceltic International completes ENEL farm-out in Algeria
Petroceltic International (LON:PCI) today announced the completion of the deal to farm-out 18.375 per cent of the Isarene license in Algeria to ENEL.
Isarene hosts the world class Ain Tsila gas field.
The deal was first struck in April last year. Petroceltic says it is now owed over US$100 million from the deal and payment is due in the next 30 days.
"We are delighted to announce the completion of the Enel farmout and formally welcome our new partner to the Isarene Licence,” said chief executive Brian O'Cathain.
“Since announcement of the deal in April 2011 we have forged a valuable and co-operative working relationship with Enel and Sonatrach, culminating in the completion of the highly successful appraisal campaign.
“We look forward to a long and successful relationship in this outstanding asset."
Under the terms of the deal, ENEL agreed to pay to US$36.75 million to Petroceltic. This gives the firm more than 24 per cent of all back costs incurred from 2005 until the end of the exploration period in April 2010.
Additionally ENEL had to commit to funding 49 per cent of the costs associated with the recently completed six well appraisal drilling programme. These costs are capped to a maximum of US$145 million.
Furthermore, there is a further potential payment which is contingent up the outcome of future appraisal as well as future reserve volumes and production volumes. This could be worth as much as US$75 million for the company.
The company now retains a 56.625 per cent interest in the licence while Algeria’s national oil company Sonatrach owns 25 per cent and ENEL owns 18.375 per cent.
Earlier this week broker Daniel Stewart came out with a bullish assessment of Petroceltic. It says the firm has a well diversified asset base that has ‘game changing’ potential.
The bullish view is reflected in the broker’s punchy price target, set at 13.7p, which implies nearly 70 per cent upside from the current price of 8.2p a share.
