Petroceltic falls 4% after well plugged

Shares in Irish exploration firm Petroceltic International fell nearly 4% yesterday on the back of the company abandoning an exploration well in one of the territories into which it expanded last year.

The Dublin-based firm — traditionally focused on northern Africa and the Mediterranean — significantly upped its geographical presence last year, with its takeover of Scottish explorer Melrose Resources taking it into the Black Sea and extending its presence to other parts of northern Africa and Middle East.

Petroceltic last month reported an operating profit of $4m, an 18% cutting of pre-tax losses, and strong revenue growth for 2012, all on the back of the Melrose deal, and said the coming year and a half would see it embark on an ambitious exploration programme, covering a minimum of nine wells across most of its geographical base, including two high impact wells in the Kurdistan region of Iraq.

However, Petroceltic yesterday said initial results from the Kamchia-1 exploration well in the Black Sea, in the Galata exploration concession, showed the well did not contain commercial gas volumes. Despite being drilled to a depth of 2,887ft, 56ft of carbonate sands with sub-commercial gas saturations were encountered. The well has been plugged and abandoned, with Petroceltic saying it will analyse well data before deciding whether to enter into the final two-year extension of the Galata exploration licence.

Chief executive Brian O’Cathain said the rig used at Kamchia-1 will now move to complete a development well on the Kaliakra gas discovery, also in Bulgaria.

“It will then drill the company’s first exploration wells offshore Romania this summer to test two high potential, proven exploration plays in Est Cobalcescu and Muridava,” said Mr O’Cathain.

Petroceltic’s share price was down by 3.7%, at 8c, yesterday, but analyst reaction was not bad. Davy Stockbrokers said the result proved that exploration is “an uncertain activity”, but that the value implications to the stock should be limited.

On Thursday, another Irish explorer, Tullow Oil, announced the abandonment of a well in Norway.

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