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