Business Irish

Tuesday 25 October 2016

Petroceltic set to receive two-week lifeline on debts

Published 07/02/2016 | 02:30

Brian O'Cathain, CEO of embattled Petroceltic Photo: Paul Sharp
Brian O'Cathain, CEO of embattled Petroceltic Photo: Paul Sharp

Stricken Irish oil and gas explorer Petroceltic is expected to announce tomorrow that it has received another waiver on bank repayments from lenders - this time for a fortnight.

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The company, led by Brian O'Cathain, is on the brink after breaching bank covenants and has put itself up for sale.

Extending the waiver will give the company more time to try and complete a deal that will enable it to pay off its lenders.

Petroceltic's largest shareholder, Worldview Capital Management, a trenchant critic of the oil and gas explorer's management in recent months, has said it is mulling an all-cash offer for the company.

In addition, T5 Oil & Gas, which was set up by a number of veterans of Tullow Oil, has been preparing a bid for Petroceltic's Egyptian production assets.

Petroceltic has said it is in talks to sell those assets and it has already sold interests in Egyptian exploration licences to a joint-venture partner.

The Irish oil and gas explorer announced that it was up for sale in an explosive announcement released to the market days before Christmas. Since then, it has had a waiver on bank repayments extended on multiple occasions.

"The company's lenders have also indicated their willingness to consider such further waivers as may be required to continue the strategic review process, based on circumstances applying at the time of any application and with specific reference to the progress of the various initiatives being undertaken pursuant to the strategic review," Petroceltic said in announcing a week's extension on Friday, January 29.

"Further announcements on the company's financial position, and the status of the strategic review, will be made as and when appropriate."

On Friday, Petroceltic's shares closed at 18.75p in London, down from almost £1.26 a year ago.

"Throughout 2015, the group has been pursuing a number of debt and portfolio management initiatives to secure additional financing, create liquidity and/or reduce financial commitments, with a variety of counterparties, including existing shareholders, licence partners and other parties," Petroceltic told the market before Christmas.

"The board continues to believe that the value of the group's producing and development interests is materially in excess of its current borrowings... 2015 has presented a period of exceptionally challenging market conditions, especially for smaller oil and gas companies such as Petroceltic," the company added.

Sunday Indo Business

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