Petroceltic Secure US$103 million Contract

PUBLISHED: 20 Dec 2011 @ 03:47 | Comments (0) |

Algeria’s Council of Ministers has approved the sale of an 18.375% interest in the Isarene PSC to Enel Trade SpA (Enel). The deal is set to mean a US$103million contract for oil and gas exploration and production company Petroceltic International (LSE:PCI).

Deal Details

• Agreed to pay up to US$ 36.75 million to Petroceltic, which equates to 24.5% of all back costs incurred from signing of the PSC in 2005 until the end of the exploration period in April 2010;

• Committed to fund 49% of the cost of the first six appraisal wells in an enlarged Isarene appraisal campaign and of a contingent additional well, of which costs are capped, in aggregate, at US$ 145 million; and

• Agreed to pay Petroceltic a contingent cash consideration, up to a maximum of US $75 million, such amount determined by a number of factors based the results of the appraisal programme, such as the overall level of reserves and the production profile.

Upon completion, Petroceltic will operate the permit with a 56.625 % interest, Sonatrach will maintain a 25% interest, and Enel will hold an 18.375% interest.

Speaking at the deal’s announcement, Petroceltic International’s Chief Executive Brian O’Cathian said that it will provide “a firm foundation for the ongoing growth and diversification of our business.”

New Non-Executive Director

The deal follows news last week that the firm has appointed Hugh McCutcheon as a non-executive director. Formerly head of corporate finance at stockbrokers Davy, Mr Hutchinson had responsibility for IPOs, fund raisings, debt raisings as well as mergers and acquisitions.

At Petroceltic International, Mr Hutchinson is set to have responsibilities including deal-making and corporate governance.

References
↑  Petroceltic set for US$103 mln payday as ENEL farm-out is ratified in Algeria
↑  Algeria – Ratification of Enel Farmout Transaction
↑  Petroceltic International hires Hugh McCutcheon as non-exec director

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