Petroceltic sells 18.4% stake in Algerian licence

IRISH exploration company, Petroceltic has sold an 18.4% stake in its leading asset in Algeria to Europe’s second largest utility company for a maximum consideration of $183 million (€123m).

Enel — Italy’s largest power company and Europe’s second largest utility — will pay an initial $36.75m for the share of Petroceltic’s Isarene licence in Algeria, which is on course to generate commercial gas flows by 2015.

The Italians will also cover 49% of the cost of the current appraisal programme at the site, where gross costs are capped at $145m; and up to a maximum of $75m, dependent on the recoverable reserves approved by the Algerian authorities in the final discovery report, expected to be submitted early next year.

The Dublin-headquartered oil and gas exploration company’s share price surged by more than 12% yesterday (closing at 14c) on the back of news of the deal, which still has to be approved by the Algerian authorities and the country’s State-owned energy company, Sonatrach which owns a 25% stake in the asset.

Following the completion of the deal — which should take around four-to-six weeks — Petroceltic will control 56.6% of the asset, with Sonatrach maintaining its 25% share and Enelowning 18.4%.

Petroceltic chief executive, Brian O’Cathain said the deal marked “a strong endorsement” of the quality of the Isarene asset “and an important financial support to our ongoing appraisal campaign and future development planning”.

The entire Isarene field — classed as being the tenth biggest oil and gas find when discovered two years ago — covers an area larger than Greater Dublin and is estimated to be around twice the size of the Kinsale Gas Field off the south coast of Ireland.

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