Petroceltic's 2014 production levels lower than expected
PETROCELTIC'S 2014 production levels will be lower than most analysts anticipated, the company has said.
In an operational update, the drilling company said its production expectations for 2014 will be in the region of 20,000 to 22,000 boepd (barrels of oil equivalent per day), lower than expected, due to scheduled maintenance in Bulgaria and reduced drilling in Egypt, which were caused by delays in debt recovery which affected budgets.
The new estimate falls below predictions made by both of the country's biggest stockbroking firms. Davy Stockbrokers had anticipated production to reach 24,500 boepd this year, while Goodbody stockbrokers expected 22,500 boepd.
However, analysts played down the announcement. There were solid operational reasons for it, said Davy's Job Langbroek, so the lowering of production estimates does not point to any acceleration of field decline.
The company confirmed that 2013 production had reached 25,200 boepd, in line with expectations.
It added that a testing programme is now anticipated for its Shakrok well in the Kurdistan region of Iraq, where drilling is expected to reach its targeted depth in late February, one month later than planned because of weather delays. Its second Kurdistan well will spud in February.
Analysts reacted positively: "We think the positive exploration outlook dominates the announcement," said UK wealth advisers Cannacord.
Three new high potential exploration licences were ratified in Egypt, more than tripling the Egyptian land mass available to Petroclectic for exploration. It added that its ability to recover cash from its Egyptian operations had recently improved.
Its annual budget for 2014 is between $100m (€73m) and $130m, depending on whether initial funding from a farm-in deal comes through in time. This budget compares to $174m in 2013.
About 47pc of the budget has been set aside for exploration, with the remainder committed to development activities. The company's 2014 exploration programmes involve four firm wells including a second in Kurdistan, while extra exploration may be undertaken in Italy, Egypt and Kurdistan. Debt at the end of 2013 was $246m, in comparison to $213m in 2012.
Shares in the company, which has a dual listing in Dublin and London, rose marginally yesterday, up 0.1pc by early afternoon to €2.04.