The $180m asset sale has been described by management as being “a major commercial milestone” for the Dublin-based company.
Yesterday’s announcement basically copper-fastened the deal previously announced last October, under which Algerian State oil company, Sonatrach — previously a junior partner in the field — agreed to purchase an additional 18.4% from Petroceltic, to boost its overall shareholding to just under 43.4%.
The Irish company had, at one stage, controlled 56.6% of the Ain Tsila asset — seen as being one of the biggest gas finds in the world — but in 2012 sold an initial 18.4% stake to Italian energy giant, Enel. This secondary farm-out — which has been planned by management for some time — reduces Petroceltic’s share of the field to 38.25%.
The Algerian firm will pay the $180m in installments — roughly by way of an initial $20m payment, a further $140m covering of Petroceltic’s development costs and contingent payments of a combined $20m based on certain project-related milestones being reached.
However, given that the deal is back-dated, to some degree, the initial payment is likely to be in the region of $35m.