Tuesday 16 January 2018

Petroceltic defends plan to raise €74m as wells fail to produce

Brian O'Cathain, CEO of Petroceltic International Plc. Picture Paul Sharp
Brian O'Cathain, CEO of Petroceltic International Plc. Picture Paul Sharp

Independent oil and gas explorer Petroceltic defended plans to raise funds, adding that some of its latest drilling work in places like Iraqi, Kurdistan and Egypt has failed to produce significant amounts of oil or gas.

Shares in the AIM-listed explorer closed down 4pc at 154p in London following the disappointing results from three countries.

"The outcome of these exploration wells is disappointing but does provide a significant amount of information that will greatly help decision making around future activity on these licences," said chief executive Brian O'Cathain.

The company also said a proposed placing to raise €74m was in the best interest of the company, despite criticism by majority shareholder Worldview Capital Management.

"Petroceltic has always and will continue to uphold the interests of all its shareholders and the board believes that these interests are best served by, inter alia, ensuring a diverse and balanced shareholder base, bringing new and valuable experience into the company and maintaining high corporate governance standards," the company said in a statement.

Worldview, which has increased its stake in Petroceltic to 17pc, had urged shareholders to reject the Irish company's move to disapply statutory pre-emption rights in relation to an upcoming share placing.

An extraordinary general meeting is due to be held by Petroceltic next week to put the motion to shareholders.

Petroceltic told shareholders earlier this month that it plans to raise about €73.6m via a conditional placing of 37.9m shares.

Half of that placing, representing 8.8pc of Petroceltic's issued share capital, has been allocated to British Virgin Islands-based Dovenby Capital. Dovenby is headed by Malaysian accountant Dato' Ahmad Fuad Bin Md Ali.

Mr Fuad is also the chairman of Malaysia-based oil field services provider Bumi Armada.

Dovenby will be entitled to board representation at Petroceltic by holding more than 8pc of the company.

"Our concerns over the lack of corporate governance, abuse of shareholder rights, insufficient due diligence and insufficient information provided about the new strategic investor have not been sufficiently addressed by the company," said Worldview chief executive Angelo Moskov.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business