Petroceltic International

Petroceltic International plc
Public company
Traded as ISEQ: EG5A
Industry Energy
Founded 2003 (previously Ennex International)
Headquarters Dublin, Ireland
Key people
 Robert Adair
(Executive chairman)
Brian O'Cathain
(chief executive)
Tom Hickey
(CFO)
David Thomas
(COO)
Products Oil and Gas
Production output
 24,500 – 25,500 boepd[1]
Revenue US$59.4 million (2012)[2]Employees 550
Website www.petroceltic.com

Petroceltic International is an Irish oil and gas exploration and production company. Based in Dublin, it has operations in North Africa, the Mediterranean Basin and the Black Sea. It is listed on the Alternative Investment Market of the London Stock Exchange and on the Enterprise Securities Market of the Irish Stock Exchange. The company has an approximate market capitalisation of€307m.

Company Development

Petroceltic (formerly called Ennex International) became an oil and gas company in November 2003 when it changed its name to Petroceltic International plc.[3] In 2004, Petroceltic spudded its first well in Tunisia and in the same year acquired a licence called 'Isarene' in the Illizi basin of Algeria.[4] In 2006, the company started the first of its exploration wells in Algeria and over the next few years explored the Isarene field with 3D seismic and 13 wells which ultimately led to the discovery and appraisal of the Ain Tsila gas condensate field and the submission of the Field Development Plan. The Ain Tsila field is currently scheduled to produce first gas in late 2017 and partners in the field include Sonatrach (the Algerian state energy company) and Enel, the Italian utility.[5]

In 2011, Petroceltic, in partnership with Hess, signed two production sharing contracts (Dinarta and Shakrok) in the Kurdistan Region of Iraq.[6] In October 2012, Petroceltic merged with UK based Melrose Resources plc in a share for share deal worth $222m; this added production and cash flow generating fields in Egypt and Bulgaria to the portfolio and formed a full cycle oil and gas exploration and production company.[7] In December 2012 the Ain Tsila field was declared commercial and 304million barrels of oil equivalent ("boe") of proven and probable commercial reserves were recognised bringing total company commercial reserves to 378million boe.[8] In 2013, high impact exploration drilling commenced in Petroceltic's licences in Romania and the Kurdistan Region of Iraq.[9] The Company also maintains a modest royalty interest in the Kinsale gas field offshore Ireland.[10]

Petroceltic is headquartered in Dublin with offices in Edinburgh, London, Algiers, Cairo, Varna and Rome. The Company's shares are quoted on the AIM of the London stock exchange and the ESM of the Irish Stock exchange. The Company's largest shareholder is its chairman Robert Adair, who holds over 23% of its shares; the remainder are principally held by institutional shareholders, professional investors and pension funds. Revenue for the first half of 2013 was $103m.[1]

In March 2015, two non-executive directors at Petroceltic resigned after a failed attempt by Switzerland-based fund Worldview Capital to unseat CEO Brian O’Cathain.[11]

Operations

In line with its strategy, Petroceltic seeks to develop operations in the Mediterranean Basin, North Africa and the Black Sea. The company has built a strong operations team which covers this area and which provides exploration skills in geology, geophysics, petrophysics, reservoir engineering, petroleum engineering, well design, drilling operations and project management.

Algeria

The oil and gas sector is the backbone of the Algerian economy, accounting for 35 per cent of the gross domestic product, and two-thirds of total exports.[12] The gas resources of Algeria are world class, estimated at the end of 2012 at 4.5 trillion cubic meters of gas.[13] Algeria supplies approximately 10% of Europe's natural gas via existing pipelines to Italy and Spain and to LNG projects.

Petroceltic was awarded the Isarene Production Sharing Contract ("PSC") in September 2004,[14] which came into force in April 2005. On completion of the work commitments under the PSC Petroceltic applied for and was granted a two-year appraisal extension to April 2012.[15] The field was declared as commercial in August 2012[8] and in December 2012 the Algerian authorities approved the development plan allowing the project to move into the 30-year development phase of the licence.[16] This allowed the Company to transfer the contingent resources previously held in respect of Ain Tsila to proved plus probable reserves totalling 304 MMboe on a working interest basis at year end.[17]

Petroceltic is the operator under the Isarene PSC and holds a participating interest of 56.625%. Enel holds a participating interest of 18.375%, following a farm out in 2011. Sonatrach holds a 25% interest, carried during the exploration and appraisal period of the Isarene PSC

Italy

Italy is the third largest producer of oil and the fifth largest of gas in Western Europe. Proven reserves in Italy to date exceed 622m barrels of crude oil and 8 TCF of gas.[18]

As a large net importer of hydrocarbons, there is a large market for domestically produced gas. Italy is also seen by many as being a likely hub for gas import into Europe. The development of a series of pipelines linking Italy to major gas producers such as Algeria, and Libya and the development of new LNG terminals will ensure that Italy can fulfill this role.

Petroceltic has had a strong presence in Italy since 2005. Petroceltic has since substantially increased their holdings in Italy both onshore in the proven Po Valley region and offshore in the Central Adriatic region. In the Po Valley they have interest in four permits; Carisio, Ronsecco, Case Sparse and Vercelli. Offshore in the Adriatic they have a further five permits, including the Elsa discovery. They now have an interest in 6 permits and 14 permit applications in this territory.

Kurdistan

In July 2011, Petroceltic, as a joint venture partner with Hess, entered into the highly prospective Dinarta and Shakrok PSCs with the Kurdistan Regional Government of Iraq (KRG). Between both blocks, there are a total of five previously undrilled surface anticlines, which provide Petroceltic with access to a world class multi-billion barrel prospective resource inventory. These undrilled structures are on trend with a number of recent major discoveries, including Shaikan, Atrush, Swara Tika and Bina Bawi. Drilling has commenced at Shakrok-1, the first high-impact exploration well to be drilled on the Shakrok block. Drilling is planned to start on the Dinarta block in Q4 2013.

Petroceltic Kurdistan Limited holds a 16% participating interest (20% paying interest) in both PSCs with Hess Middle East New Ventures Ltd. holding an operated 64% participating interest (80% paying interest) in the PSCs. The KRG has a 20% carried interest in each PSC

In August 2012 De Golyer and Mc Naughton estimated the total Shakrok prospect to have consolidated P50 resource potential of 650 million barrels of recoverable oil and a geological chance of success (Pg) of 24.5%. Drilling began on the first well at Shakrok in Kurdistan in August 2013. The well is expected to take approximately six months to complete.[9]

Egypt

Petroceltic's core area of operations in Egypt is in the onshore Nile Delta where it holds a 100% operated interest in 12 producing fields, 15 development leases and the South East El Mansoura exploration concession. These assets provide the Group with a solid and diversified production platform which generates significant cash flow. The Group was recently awarded a 37.5% non-operated interest in the El Qa'a Plain block in the southern part of the Sinai peninsula, and also two new blocks in the Nile Delta region (South Idku and North Thekah) in partnership with Edison International Spa.

In 2012, the Group's daily production averaged 21,865 boepd on a working interest basis, which is equivalent to 9,458 boepd on a net entitlement basis.

Bulgaria

Petroceltic holds a 100% operated interest in the Galata exploration block in shallow waters in the western Black Sea and has been awarded four production licences within this concession. Since production from the Galata field commenced in 2004 the Group has been pursuing an exploration strategy designed to leverage the Galata field development infrastructure by focusing on high value adjacent prospects. This strategy yielded three recent exploration successes, two of which (Kaliakra and Kavarna) were brought on stream via single well subsea tie-backs to the Galata platform in late 2010 with the third (Kavarna East).

The total production from these fields in 2012 was 14 Bcf at an average rate of 38 MMcfpd, representing approximately 17% of Bulgaria's overall gas requirements.[19]

Romania

Petroceltic holds 40% operated interests in two offshore exploration concessions awarded in the Romanian 10th Licensing Round and ratified in late 2011. The licences, EX-27 Muridava and EX-28 Est Cobalcescu, are located in shallow water in the western Black Sea and contain multiple exploration plays. The two licences have a combined area of approximately 2,000 square kilometres. Both blocks are historically under-explored, although the undeveloped Olimpiskiyi gas discovery lies within the Muridava licence. The licences have a three-year initial exploration term which commenced in October 2011 which may be followed by two optional extensions totalling up to seven years. The initial three-year minimum work programme for each block comprises seismic acquisition in year one, one well in year two and two wells in year three.[20]

In 2012, the Group acquired 2,000 square kilometres of 3D seismic covering both licences which fulfilled the first year work programme commitment. The data quality is excellent and the Group is nearing completion of the interpretation which is generating a significant prospect and lead inventory. The inventory includes both structural and stratigraphic traps at multiple target levels which are accessible by jack-up drilling over the majority of the licence areas due to the shallow water depth. In both blocks, features have been identified in the Miocene, Eocene and Cretaceous with combined unrisked P50 prospective resources in the range of 2 to 3 Tcfe and further higher risk potential exists in the deeper Jurassic and Triassic formations.[21]

Two high graded prospects, one in each licence, have been selected for drilling in 2013 and a further four exploration wells are planned for 2014.[9]

The first of these wells, the Cobalcescu South well is located approximately 170 km northeast of Constanta, in the southwest corner of Block EX-28 in a water depth of 90 metres. The well was spudded in late August and results are expected within two to three months.[9]

Greece

In July 2013, the company announced that a consortium comprising Petroceltic, Hellenic Petroleum S.A.(Operator) and Edison International SpA had been successful in bid for the Patraikos block, offshore western Greece. Each of the three companies in the joint venture will hold a one third working interest in the concession.[22]

The Patraikos block is located in the Gulf of Patra and covers an area of 1,892 square kilometres with water depths principally in the range of 100 to 300 metres. The concession is potentially oil prospective in the Jurassic, Cretaceous and Eocene formations with a working hydrocarbon system proven by the Katakolon oil discovery wells drilled in 1982 approximately 35 kilometres south of the block.[23]

References

  1. 1 2 ' Petroceltic 2013 Interim Results Statement'
  2. ↑ 'Petroceltic Annual Report 2012'
  3. ↑ 'Ennex Regulatory Announcement 24/4/2003- Ennex Proposes Name Change to Petroceltic International'
  4. ↑ 'Petroceltic Regulatory Announcement 29 July 2004 – PETROCELTIC WINS MAJOR GAS BLOCKS IN ALGERIA BID ROUND'
  5. ↑ 'Petroceltic Website, Operations – Algeria'
  6. ↑ 'Irish Examiner 26 July 2011 Petroceltic eyes up $72m Kurdish venture'
  7. ↑ Bloomberg 'Petroceltic to Buy Melrose Resources to Expand Oil Portfolio'
  8. 1 2 'Petroceltic Regulatory Announcement 9/8/2012 – Declaration of Commerciality for the Ain Tsila field'
  9. 1 2 3 4 'Petroceltic Regulatory Announcement 2/9/2013 – Kurdistan and Romania Drilling Campaigns Commence'
  10. ↑ b Petroceltic Annual Report 2012, Statement of Licences
  11. ↑ "Two Petroceltic directors resign after shareholder row". Petro Global News. Retrieved 3 March 2015.
  12. ↑ 'OPEC Algeria – Facts and Figures'
  13. ↑ 'BP Statistical Review of World Energy 2013'
  14. ↑ 'Petroceltic Regulatory Announcement 27 September 2004 – Petroceltic Signs Algeria Production Sharing Contract'
  15. ↑ 'Petroceltic Regulatory Announcement 6/4/2010 – Algerian PSC Extension'
  16. ↑ 'Petroceltic Regulatory Announcement 21 December 2012 – Final regulatory approval for Ain Tsila Gas-Condensate Field Development'
  17. ↑ 'Petroceltic Regulatory Announcement 21/12/12'
  18. ↑ 'Petroceltic Website, Operations – Italy'
  19. ↑ 'Petroceltic Website, Operations – Bulgaria'
  20. ↑ 'Offshore 3/5/2011- Melrose Confirms Romanian Licences'
  21. ↑ 'Petroceltic Website, Operations – Romania'
  22. ↑ RTE.IE 12/7/2013 – 'Petroceltic awarded new Greek licence'
  23. ↑ 'Petroceltic Regulatory Announcement 12/7/2013 – Award of New Greek Licences'
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