Petroceltic will try to re-drill gas well after testing snag
IRISH energy explorer Petroceltic International, whose shares were the best performers on the ISEQ last year, said it hit a snag while drilling in Algeria.
The Dublin-based explorer said it was unable to complete testing of a gas well in south-east Algeria because of geological problems. These problems prevented Petroceltic from carrying out "fracture-stimulation" in the well.
Despite this failure, the company said the well in the Ain Tsila field had large supplies of gas and Petroceltic would try to carry out the procedure again later in the year with better equipment.
It confirmed that the gas find extended to a distance of more than 22km.
Previous estimates said the three wells could be the 10th-biggest gas find in 2009.
"The company was unable to fracture-stimulate the well with the available equipment," Petroceltic said in a statement.
"We are working to interpret and integrate the large volume of data from these discoveries, with a view to making an application to the Algerian authorities for an appraisal period extension to the production sharing contract in the near future. We hope to be carrying out further appraisal drilling on the Ain Tsila field later this year, subject to partner and government approval."
Shares in north African-focused Petroceltic surged 367pc last year as investors piled into exploration stocks and on hopes the company's finds at two other wells in Algeria would generate significant earnings.
The Dublin and London-listed company has a market capitalisation of €223m, making it the 23rd-biggest company on the Dublin exchange. Shares fell yesterday in Dublin, closing down 10pc at 16.2c.
Petroceltic has a 75pc interest and is the operator of the Algerian gas wells. Algeria's state-run Sonatrach holds the balance of 25pc. The shares had jumped in early December after the explorer reported gas flow rates in line with expectations at a second Algerian well.