Petroceltic raises €89.6m to fund international drilling programme

IRISH exploration company Petroceltic has conditionally raised $120.5 million (€89.6m) in fresh funding by way of a share placing, in order to fund its international drilling programme planned for the second half of this year.

Just shy of 635.3 million new ordinary shares are to be issued, with a mix of both new and existing institutional investors taking note. The capital injection – which had been flagged as a necessity, in the past few weeks, by a number of industry analysts – will allow Petroceltic fund its drilling activity in Italy and Algeria. Funding for its operations in Tunisia has largely been catered for, through farm-out agreements with local players.

The Dublin-headquartered oil and gas company’s chief executive Brian O’Cathain said that it was particularly pleasing that the placing was oversubscribed “despite the difficult market conditions”.

“This placing will fund the appraisal programme to optimise development plans for our major discoveries on the Isarene permit in Algeria. It also facilitates the drilling of a further well to determine the quality and extent of the oil discovery on the Elsa field in the Adriatic offshore Italy,” Mr O’Cathain added.

The placing is due to be signed off next month, it being reliant on shareholder approval at an extraordinary general meeting on April 21, to be held at Dublin’s Conrad Hotel.

Petroceltic is looking to drill six wells over the three countries in which it has a presence, commencing in the second half of this year. Two of these are likely to be in Tunisia.

The company will also, on the back of the financing move, repay a $7.5m option fee to Spanish energy group, Iberdrola which bought a near 23% stake in the Irish company, for €35m, in 2008 only to sell up last year in order to focus on the renewable energy sector.