26th Aug 2008 07:00
PETROCELTIC INTERNATIONAL PLC
INTERIM RESULTS AND OPERATIONAL UPDATE FOR THE SIX MONTHS ENDED 30 JUNE 2008
Petroceltic International plc ("Petroceltic" or "the Company"), the AIM and IEX listed upstream oil and gas exploration and production company, primarily focused on North Africa and the Mediterranean, today announced its interim results for the period ended 30 June 2008. The main highlights for this period and to date are:
Strategic Investment and Alliance with Iberdrola S.A. ("Iberdrola") cemented
Investment of US $55 million by Iberdrola at STG £0.13p/share completed
Cash balance of US $47.5 million at period end
Further strengthened by additional investment of US $17.4 million plus advance option payment of US $7 million from Iberdrola in Q3 2008.
Iberdrola is now a strategically important shareholder with 22.6% of the enlarged equity and a Board position
Algeria
Extension of Isarene into second exploration period
Completion of major 3 D seismic acquisition programme
Rig contracts under evaluation for an Exploration and Appraisal programme in first six months 2009, with a minimum of 7 wells to evaluate over 2 TCFe of potential hydrocarbon resources
Qualified as onshore operator for future new bid rounds
Italy
Continuing expansion and high-grading of Italian portfolio
Ten exclusive exploration permit preliminary awards in Adriatic
Tunisia
Extension in to first extension period valid to 2011
Attractiveness of licence enhanced by nearby oil discovery
New seismic mapping yields additional prospects
Board
Strengthened by two new appointments
Brian O'Cathain, Executive Chairman of Petroceltic commented:
"Our Strategic Alliance with Iberdrola, which has given the Company access to capital at a premium to the prevailing share price, has allowed us to accelerate our programme of enhancing shareholder value in Algeria. We now look forward to the most exciting period in the Company's history as drilling results from Algeria begin to arrive and we continue to make real progress towards the drilling phase in Italy and Tunisia".
A copy of the interim results announcement is attached:
Press Enquiries to:
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John Craven /Brian O'Cathain, Petroceltic Tel: +353 (1) 495 9285 |
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James Henderson / Alisdair Haythornthwaite, Pelham PR Tel: +44 20 7743 6676 |
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Joe Murray, Murray Consultants Tel: +353 (1) 4980300 |
Executive Chairman's Statement
I am pleased to be able to report on the progress made by Petroceltic in its exploration and production business during the first half of 2008.
During the first half of this year, Petroceltic built on the foundations laid in 2007 and is now moving forward into an exciting phase of development. A strategic alliance with Iberdrola S.A. has been put in place that brings with it a strong partner with complimentary skills and US $55 million in new equity funding. The Company has successfully entered into the second exploration period on the Isarene permit in Algeria, which runs until April 2010, and the extensive 3D seismic programme scheduled for this period has been completed on time and within budget. The Company is currently evaluating tenders for drilling services and plans to drill up to ten wells over the next 24 to 36 months.
In all of our assets, new exploration opportunities continue to be sought and developed. In Algeria the company has pre-qualified for the 7th Algerian Licensing Round where 45 blocks are on offer in 16 permit areas. Offshore Italy, our wholly owned subsidiary, Petroceltic Elsa Srl has been awarded a total of nine exploration permits in the central Adriatic. In Tunisia, the application to enter the first renewal period for the Ksar Hadada permit has been approved and with a new oil discovery being made recently immediately to the south of the licence, the prospectivity of the block has been significantly enhanced.
Strategic Alliance
The Company has entered into a strategic alliance with Iberdrola S.A. ("Iberdrola"), a major international energy company, to facilitate the development of the Company's oil and gas assets in North Africa and Italy. To cement this alliance Iberdrola has invested US$55 million in Petroceltic through a placing of 215.8 million ordinary shares at Stg£0.13 per share. Petroceltic is now in a position to intensify and accelerate the work programme on its portfolio of high quality exploration and appraisal assets mainly in Algeria. In addition, Iberdrola and Petroceltic plan to co-operate to evaluate potential new projects in Italy and North Africa.
Iberdrola has also agreed to pay $7 million for an option to acquire a 49% financing interest in any single asset from Petroceltic's portfolio over the next two years, in exchange for a fee of $55 million, the $7 million option fee to be offset against the cost of the investment. The option fee is payable before end Q3 2008.
Algeria
Petroceltic has retained 70 per cent of the original Isarene Permit area (7,520 sq. km) into the second exploration period, in line with the provisions of the Production Sharing Contract. The retained area contains all of the prospects previously identified by Petroceltic on the licence. The second period officially commenced on April 26th 2008 and is in force for two years until April 25th 2010.
Petroceltic and its partner Sonatrach completed the acquisition of high quality 3D seismic over the northern part of the Ain Tsila Ridge area of the Isarene permit. A total of 892 km2 of wide azimuth 3D was shot with high quality structural and stratigraphic data recorded. With up to 350 personnel in the field at any given time, this work was completed incident free, on time and within budget. The seismic tapes are currently being processed in Houston, Texas, USA. The seismic interpretation work will focus on identifying areas of enhanced permeability on the target reservoirs.
Petroceltic now plans to drill up to 9 wells to further delineate the potential oil and gas reserves on the licence. The initial drilling focus will be to establish and appraise resource potential in the Devonian and Carboniferous reservoirs of the Western area of the Isarene permit to claim further discovery areas in addition to the already claimed Hassi Tab Tab (HTT-2) and Isas (ISA-1) discoveries. Additionally, a well is planned to target the oil deposit which tested 500 bopd from the GTT-1 well, as a potential early oil development. The drilling programme will then test the deeper Ordovician reservoirs on the Ain Tsila ridge area using the recently acquired 3D data.
The Isarene area is considered by Petroceltic to hold prospective gas resources in the range of 2 to 6 trillion cubic feet of gas.
Petroceltic has received confirmation from Algeria's National Agency for the Valorisation of Hydrocarbons, ("ALNAFT") that it has prequalified for the upcoming Algerian oil and gas exploration licensing round as an Operator and Investor for onshore licences. The 7th Algerian licensing round, and the first since the adoption of the new Hydrocarbons law of 2006, will invite bids from Operators and Investors for 45 exploration and production blocks in 16 permits, divided between nine hydrocarbon basins. The round closes in December 2008.
Petroceltic is now in a unique position in Algeria, well funded for the foreseeable future and operating a significant license with Sonatrach as our partner. The Directors believe that there is considerable upside in our Algerian licence, and look forward to well results early in 2009.
Italy
In Italy, Petroceltic's wholly owned Italian subsidiary, Petroceltic Elsa Srl., has been granted nine exclusive exploration permits in the central Adriatic, offshore Italy. Included in the awards to Petroceltic are permits d492 and d493, which were subject to a competitive external bid. These interests together with the other seven permits d494 to d500, and Petroceltic's existing interest in the BR 268RG offshore permit, gives the Company access to a near contiguous proven hydrocarbon play fairway of over 2,660 square kilometres along the Apulian Carbonate platform margin. The permits in water depth depths of 30 to 150 meters are located adjacent to existing oil and gas fields which have demonstrated three working hydrocarbon plays in this region; the Cretaceous Miglianico/Elsa basin floor fan; the Cretaceous-to Miocene Rospo Mare/Ombrina Mare platform carbonate oil plays, the latter recently successfully tested by the OM-2 well; and the Santo Stefano Mare Pliocene biogenic gas play.
Interpretation of 2D seismic data has revealed a number of prospects and leads in the permits. Future plans involve obtaining additional new seismic data in order to high-grade prospects for drilling.
In accordance with the normal Italian award process, the permits have been granted on a preliminary basis, pending the submission by Petroceltic of an environmental impact study for approval by the authorities.
Tunisia
Petroceltic has been informed by the Tunisian government that the application to enter the first renewal period of the Ksar Hadada permit has been approved. The first renewal period of the permit began on 20th April 2008 and lasts for three years. In line with the Production Sharing Contract, Petroceltic and its' co-venturer Independent Resources have retained 80% of the original Ksar Hadada permit (5,600 sq. km) into the first renewal period.
New interpretation of seismic and well data on the permit has yielded positive results with the validation of a number of Ordovician and Silurian prospects in the southern part of the block. Drilling on this licence has been deferred to allow the incorporation of recent positive exploration drilling results on adjacent permits.
Petroceltic has a 57 per cent interest in and is operator of the Ksar Hadada permit. The other partners are Independent Resources (Ksar Hadada) Ltd (40 per cent), GA.I.A. srl. (1.5 per cent), and Derwent Resources (Ksar Hadada) Ltd (1.5 per cent).
Financial
The accounts for the period reflect the recognition and measurement principles of the International Financial Reporting Standards.
The Company reports a loss of US$1,939,000 for the period, an increase of US$1 million over the corresponding period in 2007. This is mainly due to an increase in administrative expenses, which relates to staffing and overhead increases in Dublin, Rome and Algeria as the Company continues to develop its business.
Corporate
The board has been considerably strengthened with the addition of Pablo Fuentes-Cantillana as a non-executive director, and Alan McGettigan as Finance Director. Both new directors bring a wealth of energy experience to the board.
Outlook
With all drilling funding in place and a strong strategic partner for the next stage of activity in Algeria, Petroceltic is well placed to move into the next phase of its development. The Company is confident that the coming period of operational investment will generate significant growth in shareholder value over the next 12 months.
Notes to Editors:
Petroceltic International plc is a leading Upstream Oil and Gas Exploration and Production Company, focused on the Mediterranean and North African area, and listed on the London Stock Exchange's AIM Market and the Irish Sock Exchange's IEX Market. The Company has exploration assets in Algeria, Tunisia and Italy and a royalty interest in the Kinsale Head gas field in Ireland. Petroceltic is in a unique position in Algeria, operating a significant licence in partnership with Sonatrach the state oil company, one of only three AIM listed companies to enjoy this position.
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PETROCELTIC INTERNATIONAL PLC CONSOLIDATED INCOME STATEMENT
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|||
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For the period ended 30 June 2008
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|
|
|
|
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Unaudited
6 months ended
30 June 2008
|
Unaudited
6 months ended
30 June 2007
|
Full year ended
31 December 2007
|
|
|
US$'000
|
US$'000
|
US$'000
|
|
|
|
|
|
|
Revenue
|
320
|
140
|
549
|
|
|
|
|
|
|
Administrative expenses
|
(1,932)
|
(1,089)
|
(2,817)
|
|
Amortisation
|
(203)
|
(26)
|
(53)
|
|
Exploration costs written off
|
(63)
|
-
|
(210)
|
|
Cost of share based payments
|
(645)
|
(843)
|
(1,757)
|
|
Results from operating activities
|
(2,523)
|
(1,818)
|
(4,288)
|
|
|
|
|
|
|
Finance income
|
584
|
879
|
1,827
|
|
|
|
|
|
|
Loss before tax
|
(1,939)
|
(939)
|
(2,461)
|
|
|
|
|
|
|
Income tax expense
|
-
|
-
|
-
|
|
|
|
|
|
|
Loss for the period
|
(1,939)
|
(939)
|
(2,461)
|
|
|
|
|
|
|
Basic loss per share in cents
|
(0.26)
|
(0.13)
|
(0.33)
|
|
Diluted loss per share in cents
|
(0.26)
|
(0.13)
|
(0.33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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PETROCELTIC INTERNATIONAL PLC CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE For the period ended 30 June 2008
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|
|
|
|
|
|
|
Unaudited
6 months ended
30 June 2008
|
Unaudited
6 months ended
30 June 2007
|
Full year ended
31 December 2007
|
|
|
US$'000
|
US$'000
|
US$'000
|
|
|
|
|
|
|
Loss for the year
|
(1,939)
|
(939)
|
(2,461)
|
|
Income recognised directly in equity
|
|
|
|
|
-net change in fair value of available-for-sale assets
|
98
|
20
|
50
|
|
-related deferred tax
|
(20)
|
(4)
|
(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total recognised income and expense for the period all attributable to equity holders of the company
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(1,861)
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(923)
|
(2,421)
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PETROCELTIC INTERNATIONAL PLC CONSOLIDATED BALANCE SHEET
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As at 30 June 2008
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|
|
|
|
|
Unaudited
30 June 2008
|
Unaudited
30 June 2007
|
31 December 2007
|
|
|
US$'000
|
US$'000
|
US$'000
|
|
|
|
|
|
|
Assets
|
|
|
|
|
Intangible assets
|
63,273
|
43,528
|
47,490
|
|
Property plant and equipment
|
61
|
-
|
-
|
|
Investments
|
856
|
728
|
758
|
|
Total non-current assets
|
64,190
|
44,256
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48,248
|
|
|
|
|
|
|
Trade and other receivables
|
813
|
648
|
632
|
|
Cash and cash equivalents
|
47,554
|
27,854
|
23,463
|
|
Total current assets
|
48,367
|
28,502
|
24,095
|
|
|
|
|
|
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Total assets
|
112,557
|
72,758
|
72,343
|
|
|
|
|
|
|
Equity
|
|
|
|
|
Issued share capital
|
29,103
|
26,191
|
26,191
|
|
Share premium
|
146,981
|
113,079
|
113,079
|
|
Capital conversion reserve fund
|
51
|
51
|
51
|
|
Share based payment reserve
|
9,865
|
8,306
|
9,220
|
|
Fair value reserve
|
640
|
538
|
562
|
|
Retained earnings
|
(80,229)
|
(76,768)
|
(78,290)
|
|
Total equity
|
106,411
|
71,397
|
70,813
|
|
|
|
|
|
|
Liabilities- current
|
|
|
|
|
Trade and other payables
|
5,986
|
1,227
|
1,390
|
|
|
|
|
|
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Liabilities- non current
|
|
|
|
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Deferred tax
|
160
|
134
|
140
|
|
|
|
|
|
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Total liabilities
|
6,146
|
1,361
|
1,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total equity and liabilities
|
112,557
|
72,758
|
72,343
|
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PETROCELTIC INTERNATIONAL PLC CONSOLIDATED CASH FLOW STATEMENT
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|||
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For the period ended 30 June 2008
|
|
|
|
|
|
Unaudited
6 months ended
30 June 2008
|
Unaudited
6 months ended
30 June 2007
|
Full year ended
31 December 2007
|
|
|
US$'000
|
US$'000
|
US$'000
|
|
Cash flows from operating activities
|
|
|
|
|
Loss before tax
|
(1,939)
|
(939)
|
(2,461)
|
|
Adjustments for:
|
|
|
|
|
Finance income
|
(584)
|
(879)
|
(1,827)
|
|
Amortisation
|
203
|
26
|
53
|
|
Exploration costs written off
|
63
|
-
|
210
|
|
Cost of share based payments
|
645
|
843
|
1,757
|
|
Cash from operations before changes in working capital
|
(1,612)
|
(949)
|
(2,268)
|
|
|
|
|
|
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(Increase)/decrease in trade and other receivables
|
(181)
|
337
|
353
|
|
Increase/(decrease) in trade and other payables
|
4,596
|
(4,036)
|
(626)
|
|
Net cash from operating activities
|
2,803
|
(4,648)
|
(2,541)
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
Expenditure on intangible assets
|
(16,049)
|
(1,787)
|
(9,233)
|
|
Expenditure on tangible assets
|
(61)
|
-
|
-
|
|
Interest received
|
277
|
826
|
1,515
|
|
Net cash used in investing activities
|
(15,833)
|
(961)
|
(7,718)
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
Proceeds from the issue of new shares
|
36,815
|
-
|
-
|
|
|
|
|
|
|
Net cash from financing activities
|
36,815
|
-
|
-
|
|
|
|
|
|
|
Net increase/(decrease) in cash and cash equivalents
|
23,785
|
(5,609)
|
(10,259)
|
|
Effect of foreign exchange fluctuation on cash and cash equivalents
|
306
|
53
|
312
|
|
Cash and cash equivalents at start of period
|
23,463
|
33,410
|
33,410
|
|
Cash and cash equivalents at end of period
|
47,554
|
27,854
|
23,463
|
Note:
The above statements have been prepared under International Financial Reporting Standards using accounting policies consistent with those in the last Annual Report.
Related Shares:
PCI.L