Petroceltic cuts production targets

Irish oil and gas explorer Petroceltic International has marginally reduced its full- year production targets, due to a slowdown in production at its Egyptian assets.

The Dublin-headquartered company — whose operational footprint stretches across northern Africa, the Middle-East and south-west Europe — said in its interim results statement yesterday that the recent civil unrest in Egypt has actually only had a limited impact on its activities there.

The slightly below expectations production levels from Egypt during the first half of the year — 97 million standard cubic feet of gas per day (mmscfd) and 2,825 barrels of oil equivalent per day (boepd) — were more to do with a “short operational interruption” at the South Batra gas plant and a “comprehensive well integrity review programme”, which required two wells to be shut, pending routine remedial work.

Egypt contributes roughly 60% of the firm’s annual revenues. The company’s management said, yesterday, that production levels from Egypt are still in accordance with expectations and that the company is committed to long-term investment in the country; although it will continue to monitor the situation there closely.

Overall, Petroceltic is now forecasting total production — for 2013 — in the order of 24,500-25,500 boepd. In an operational update, published at the start of the year, the company had guided slightly higher at between 25,000 and 27,000 boepd.

Production in the first half amounted to 24,500 boepd and is currently hitting 26,000 boepd.

Yesterday’s results — the first set of first-half financial figures since the 2012 merger with Scottish firm, Melrose Resources — show a near 55% year-on-year increase in Petroceltic’s pre-tax losses to just over $5m (€3.8m); while revenue shot up from $291,000 to nearly $104m. Overall losses for the period went from $3.2m to $16.1m, but cash generated from operations amounted to $55m.

Last week, Petroceltic announced it had started a multi-well drilling programme in Romania and the Kurdistan region of Iraq — something which chief executive, Brian O’Cathain has described as “an exciting time for the business” and the dawn of a period of “potentially transformational exploration activity”.

“The first half of 2013 has been a period of solid operational delivery and significant financial and corporate progress,” he said.

“In particular, the successful conclusion of our refinancing and negotiation of a second farm-out for the Ain Tsila asset, in Algeria, clearly demonstrates the strength of the group’s funding position and the quality of our asset base,” Mr O’Cathain added.

Petroceltic is expected to announce full details of its further farm-out at its Algerian operations in the coming weeks.

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