Petroceltic raises $26m to fund Italian well drilling
Published 02/06/2010 | 05:00
PETROCELTIC International, the Algeria-focused oil explorer part-owned by legendary investor George Soros, said it expects to drill wells this year in Tunisa and Italy following three separate deals to share costs with other investors.
The company said, ahead of its annual shareholder meeting in Dublin yesterday morning, that it had agreed two deals which will together raise $26m (€21.2m) to fund well drilling in Italy while reducing the company's stake in the "low risk" Elsa well to 55pc from 70pc.
The eight-year-old company, which is listed in Dublin and London and made one of the world's 10 largest gas finds in Algeria last year, is seeking to exploit three large gas fields in Algeria as well as smaller fields elsewhere.
The Algerian fields, which Petroceltic says have up to 11 trillion cubic feet, are not likely to begin producing gas that can be sold until 2016, which is when the company is likely to become profitable, chief financial officer Alan McGettigan said yesterday.
"Last year was an active and highly successful year for Petroceltic," chairman Rob Arnott said yesterday. "We are now poised for another exciting year of delivery." Petroceltic plans to begin drilling in Tunisa next month following an agreement with a Chinese company, Petroasian Energy, which keeps the Irish company's costs at zero if drilling costs remain below $14m, he added.
The company's cash pile was $33.7m at the end of 2009 and the company has no debts, Mr Arnott said yesterday.
Chief executive Brian O'Cathain told shareholders he remains optimistic about the company's share price, which has languished in recent years. Events in Algeria and Italy are likely to unlock shareholder value, he added. "You should see it reflected in the share price, that's our firm hope," he said.