Wednesday 22 January 2020

Petroceltic selling stake in Algerian gas field to state-owned firm

John Mulligan

John Mulligan

Irish exploration firm Petroceltic is selling an 18.3pc stake in an Algerian gas field to the north African country's state-owned oil company in a $180m (€132m) deal.

The state-owned firm – Sonatrach – has notified Petroceltic that it's exercising a pre-emption right to acquire the stake that the Irish firm had been in the process of selling to a third party.

Sonatrach's interest in the Ain Tsil gas development project is being seen as a strong endorsement of its potential.

The state-owned firm will pay $20m on completion of the deal, and will also shoulder $140m in development costs.

There are also two contingent payments, each of $10m, based on the achievement of certain early production and technical completion milestones.

Following the transaction, Petroceltic will be left with a 38.25pc stake in the project.

Sonatrach will have a 43.3pc participating interest, while Italian firm Enel will have 18.3pc.

Davy Stockbrokers said the transaction with Sonatrach places a $555m value on Petroceltic's current 56pc stake in the Ain Tsila project. That's the equivalent of £1.98 (€2.34) a share.

Petroceltic's shares closed 2pc higher at £1.47 in London yesterday.

Petroceltic chief executive Brian O'Cathain said the deal with Sonatrach was a "clear indication" of the current value and "long-term upside" of the asset.

"Sonatrach's decision to pre-empt confirms that the timely development of the Ain Tsila field is strategically important to Algeria and we look forward to working together to achieve this shared objective," he added.

Irish Independent

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