23rd Dec 2015 18:33
LONDON (Alliance News) - Petroceltic International PLC on Wednesday said it has initiated a formal strategic review of the business and its assets in order to maximise value for shareholders, including considering selling the company.
The oil and gas company has been struggling to make repayments under its senior bank facility due to a drop in oil prices, reduction in capital investment programmes in Egypt and Bulgaria, and adjustments to reserves arising from the 2014 Competent Person's Report.
Petroceltic owes USD217.8 million under the senior bank facility, while cash balances amount to USD28.1 million.
On Wednesday, it said it has received confirmation from its lenders of their intention to provide further financial support, but that it has also received a number of conditional proposals in respect of the potential disposal of some of its producing and exploration assets and negotiations in relation to a potential disposal of the group's Egyptian production interests.
In addition, it has also received a number of conditional proposals in relation to the sale of the company or some or all of its assets and, in light of this, "now considers it appropriate that a more formalised sale process is undertaken," Petroceltic said.
Options being considered by the board include a farm-out or sale of one or more of the company's existing assets, a corporate transaction such as a merger with a third party, the sale of the entire issued share capital of the company and the raising of capital in the form of debt and/or a subscription for new ordinary shares in the company by one or more third parties.
"The company possesses a world-class asset in the Ain Tsila gas field, which we continue to believe will be the principal driver of the long term future value of the business. We remain committed to maximising value for our shareholders and will explore all available options in order to select the best way forward for our stakeholders," Chief Executive Brian O'Cathain said in a statement.
Petroceltic added that since the end of the first half of its financial year, production and development have continued in accordance with expectations, confirming that full-year production should average at around 14.4 thousand barrels of oil equivalent per day in line with earlier guidance.
Developments in Algeria, Egypt and Italy and Greece are progressing, Petroceltic said.
Shares in Petroceltic closed up 11% at 31.50 pence on Wednesday.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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