Petroceltic suffers losses of €13.8m

The drilling of unsuccessful wells in Egypt, Bulgaria and Romania resulted in Irish oil exploration company Petroceltic reporting a $19m (€13.8m) loss for last year.

Following the company’s interim report, Petroceltic announced it was placing $100m of shares with institutional investors to help fund further exploration and development in Algeria, Kurdistan and Egypt.

The placing is made up of 37.9m shares at a price of 157p per share. Petroceltic gained a new shareholder, Dovenby, owned by Malaysian oil and gas specialist Dato’ Ahmad Fuad, which will take up half of the new shares issued.

Chief executive of Petroceltic, Brian O’Cathain, said that Dovenby’s experience in oil development would be a welcome addition.

“We are delighted to welcome Dovenby as a new shareholder in Petroceltic. With the extensive experience of Dato’ Fuad and his colleagues in international oil field development and their track record of successful investments in the oil and gas sector, we believe their investment is a further endorsement of Petroceltic’s strategy and growth plans,” he said.

In its preliminary results Petroceltic had reported revenues of $197m for the year to the end of December, which it said supported a capital programme of €161m across six countries.

The chairman noted in his shareholder address that political unrest and terrorist activity in a number of these countries, including Algeria, Egypt and Kurdistan, had led to uncertainty.

Petroceltic chairman, Robert Adair, said these were the dangers that went with working in emerging markets.

“These matters are a timely reminder of some of the potential risks of operating in emerging markets,” he said, adding “they had limited impact on our operations”.

Davy analyst, Job Langbroek, said that although the issuing of new shares would push the price of the stock down in the near term, a strong pipeline of development will keep investors on board.