Tuesday 6 December 2016

Tullow veterans poised to strike for Petroceltic

T5 Oil & Gas is interested in making a deal, writes Gavin McLoughlin

Published 31/01/2016 | 02:30

T5 Chairman Pat Plunkett. Pic Tom Burke
T5 Chairman Pat Plunkett. Pic Tom Burke

A group of former Tullow Oil directors is preparing a takeover bid for stricken Petroceltic's assets.

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T5 Oil & Gas, a vehicle set up by the Tullow veterans, has run the rule over Petroceltic's Egyptian production assets, according to multiple industry sources.

It's understood that any bid by T5 would require a significant fundraising, with the purchase price for the Egyptian assets likely to run into tens of millions.

Rising oil prices in the final hours of last week could throw a life line to Petroceltic, whose lenders agreed for a third time on Friday to allow the company breathing space to find finance or buyers for its assets.

Lenders could pull the plug after Petroceltic, once a darling of the stock market, breached the terms of its loans in the final days of last year.

T5's chairman is Pat Plunkett, who was chairman of Tullow from 2000 until 2011. Other former Tullow directors involved in setting the company up were Gerry Sheehan, who was a senior international exploration manager at Tullow, Matthew O'Donoghue, who was director of international operations, projects, contracts and procurement, and Andrew Windham, who was managing director of Tullow's Africa division from 2007 to 2012.

T5's website says its strategy is "to develop a portfolio of conventional oil & gas resources which will create sustainable growth and value for the company."

"The company's first asset is the Louga Block in Senegal. However, the company also intends to acquire highly prospective oil and gas assets in countries and regions where the management team have extensive experience and a strong network of contacts."

The assets in question have been put up for sale by struggling Petroceltic, which in an explosive announcement two days before Christmas said it was willing to sell some or all of the business. Bank of America Merrill Lynch and Davy Corporate Finance were enlisted to review the options.

In response to a query from the Sunday Independent, a T5 spokesman said: "as is standard practice, we never comment on any market rumours."

"This email should not be read as either a confirmation or a denial," the spokesman added.

Petroceltic's remaining Egyptian production assets include a "receivable" - money owed by the Egyptian national oil company - that stood at $31m at the end of last September. That receivable may or may not be included in a deal.

In December, Petroceltic told the market that "negotiations in relation to a potential disposal of the Group's Egyptian production interests...are continuing".

It said it had already agreed to sell interests in three exploration licences in that country to a joint venture partner.

Petroceltic declined to comment on this story.

Last week, Petroceltic's largest shareholder, Worldview Capital Management, said it was mulling an all-cash offer for the company.

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