30th Sep 2005 07:02
Petroceltic International PLC30 September 2005 Friday 30th September 2005 Petroceltic International plc Interim Results for the six months ended 30th June 2005 Petroceltic International plc ("Petroceltic" or "the Company") is a leading oiland gas exploration and production company owning a portfolio of significantassets in Algeria, Tunisia, Italy and Ireland. Petroceltic is headquartered inDublin and is listed on the Alternative Investment Market. HIGHLIGHTS • 100% working interest in an extensive10,800 km sq contract area in Algeria containing 9 existing oil and gas discoveries. Planning for initial and exciting drilling campaign underway. • 15% interest with an option to increase to 40% in a significant appraisal project offshore Italy. • New 2005 seismic confirms presence of large structure in southern part of our Ksar Hadada block in Tunisia. • Two gas prospects Offshore Ireland being developed which we plan to drill in 2006 • Company has geared up operationally with key appointments • Company is well financed with net cash of c$20m. John Craven, Chief Executive of Petroceltic said: "The global outlook for upstream oil and gas companies continues to befavourable. Our projects are either appraisal projects awaiting furtherevaluation and drilling, or late stage exploration projects close to, or readyto drill. All have the added attractions of being in established areas ofproduction and being close to infrastructure and thus suitable for earlyexploitation. This background should continue to provide many opportunities forthe Company to grow and prosper. "I look forward to the next 12 months which should prove to be a very excitingtime for your company as we carry out our main drilling programmes in Algeria,Italy and Ireland." For further information, call: John Craven, Petroceltic International plc 00353 1495 9285 Billy Clegg/Caroline Stewart, Financial Dynamics 020 7831 3113 CHAIRMAN'S STATEMENT The global outlook for upstream oil and gas companies continues to befavourable. Currently product prices are at or close to record highs and arepredicted to remain at these robust levels. Our projects are either appraisalprojects awaiting further evaluation and drilling, or late stage explorationprojects close to, or ready to drill. All have the added attractions of being inestablished areas of production and being close to infrastructure and thussuitable for early exploitation. This background should continue to provide manyopportunities for the Company to grow and prosper. The worldwide increase in exploration activity has resulted, not just inincreased opportunities for Petroceltic to capitalise on its assets, but also inan increased demand for drilling rigs and exploration services. We are at anadvanced stage of negotiation on drilling arrangements for a number of ourprospects and we will be in a position to make further announcements in the nearfuture. Algeria. We received notification of ratification of our Petroleum Sharing Contract (PSC)over Blocks 228/229a (the Isarene Permit Area) in the Illizi Basin in Algeria on26th April 2005. Subsequent to the ratification, the Company received theavailable data on the area. This includes more than 8,000km's of 2D Seismic and16 well records including the nine oil and gas discoveries. All of thisexploration activity was conducted over the last 50 years by several companies.During that period various circumstances mitigated against the development andexploitation of the discoveries including (i) low oil and gas prices; (ii)limited market for gas; (iii) restricted gas ownership rights afforded toforeign companies; (iv) limited infrastructure and (v) political circumstancesthat were not conducive to exploitation. Much has changed since then. Assimilating, collating, reworking and reprocessing all of this data is a majortask. I am happy to say that this work is progressing well. We have confirmedour original interpretation of the area and have identified further explorationpotential in the block. To date six primary areas of interest have beenestablished. • Isas Area. Four successful wells have already been drilled in this area, three of which produced gas and one produced oil from Devonian and Ordovician reservoirs. A drilling location has been identified up dip of these wells that will evaluate the oil and gas potential of the Devonian and Ordovician reservoirs in a crestal position • Hassi Tab Tab (HTT). This prospect was drilled in the early 1960s. The HTT 1 well flowed approximately 25 million cubic feet of gas a day from Carboniferous, Devonian and Ordovician reservoirs. Potential new drilling locations to the south and west of this prospect are being evaluated. Sonatrach estimate recoverable gas reserves in the HTT area of some 4 trillion cubic feet. • North East Oil Area. This area is to the east of the Repsol operated Tiffernine Oil Field and to the south of two 2004 oil discoveries made by Rosneft in adjacent block 245. Analysis of well data within our block suggests that at least one well could contain a 20 meter oil column in Ordovician sandstones. Sonatrach has estimated potential recoverable oil reserves for this area of 400 million barrels. • Project EEZ. We have identified major gas potential in the Devonian F2 horizon in the south east part of the contract area. Three wells in this area, Couloir, North Couloir and IRE 1 have produced gas from the F2 and another TTY 1 appears to have a logged gas column in the same horizon. The prospective reservoir is less than 1,000m deep on average and we are planning a shallow well, truck mounted drilling campaign to evaluate it. • A large structural feature has been mapped in the central eastern part of the contract area with targets in the Devonian and Ordovician. One well TSI 1 B is located on the northern flank of the structure has tested gas from the Ordovician. • South West Isarene. A large anticline has been mapped in the southwest part of the area. This feature, which has not been drilled has the potential to host large oil reserves and will need more seismic to be acquired before selecting a well location. We are currently discussing with Sonatrach and negotiating with variouscompanies regarding the finalisation of our drilling plans for these prospects. Exploration activity in Algeria is at an unprecedented level with a very highsuccess rate. There are few, if any companies, operating in Algeria that havefailed to make a commercial discovery over the last number of years. This givesus great hope for our forthcoming drilling campaign. Italy. The prospectivity of licence B.R.268VG in which we have a 15% interest with anoption to increase to 40% has been confirmed by Petrel Robertson, in anindependent engineers report commissioned by our partners in the project. Theirreport states that the P10, P50 and P90 reserves for this block are 567, 186 and46 million barrels respectively. The licence is contiguous to and immediatelyeast of the recent AGIP MIglianico discoveries that are now in production andcontain, we believe, approximately 50 million barrels of proven oil reserves. Weunderstand that AGIP is planning to drill further wells on this licence and willalso drill a prospect immediately east of our licence where there is a drillingobligation. Evaluation of the log data on the Elsa 1 well in our licence confirms thepresence of an oil column from 4,500 to 4575 meters. Currently we plan to drilla well near Elsa 1 during 2006. We are in discussions with our partners as tohow best to exploit this very substantial opportunity. Tunisia. We have recently completed a seismic programme over our Ksar Hadada ContractArea onshore Tunisia. This data was acquired in the southern part of the areawhere a large structural lead named Oryx has been identified. Initial interpretation of the data confirms our opinion of the potential of theOryx prospect. We are also continuing to review the Sidi Toui structure that wedrilled last year and the further potential of this large area. There is continuing industry interest and nearby wells in adjacent blocksschedule for later in 2005. Ireland In January 2005 we acquired a 16.25% interest in Frontier Exploration Licence 1/05 in the Donegal Basin. The Blocks contained within the Licence area aresituated over a petroleum system that is predicted to be similar to thesuccessful Corrib and Morecambe Bay Gas Field areas. The first exploration wellis scheduled to be drilled in 2006 and we look forward to announcing furtherdetails in due course. We also have a 38% interest in Licensing Option 03/4 covering three part blocksadjacent and to the east of the producing Kinsale Gas Field. On 14 September2005 an application was lodged with the Petroleum Affairs Division to convertthe Licensing Option into an Exploration Licence together with a proposed workprogramme. The work programme includes, subject to rig availability, drillingone exploration well in 2006. Revenue from the Kinsale Gas Royalty increased during the period partly as aresult of higher gas prices but mainly as a result of an increase in the royaltyrate over the minimum 2% to 2.55% for 2004. This 2004 increase is onlyrecognised in June 2005 and is incorporated in the attached financials. Organisation The Company recently announced a number of technical and operational managementappointments ahead of its forthcoming drilling campaign. Mr Philip O'Quigley, aChartered Accountant, has joined the company as Chief Financial Officer. Dr.Eloi Dolivo, a Petroleum Geologist has joined the Company as ExplorationManager. Mr Philip Thompson has joined the Company as Senior Geophysicist. Thisexceptional team will play an important part in delivering the forthcomingdrilling campaign in Algeria. Finances Operating profits for the period before exceptional items were $212,000 (2004:$33,000). Exceptional items relating to the cost of share awards in the amountof $1,357,000 resulted in losses after exceptional items of $1,145,000. Income from the Kinsale Gas Royalty continued to increase and amounted to$329,000 for the period (2004: $266,000). This is mainly as a result of theincrease in the rate of royalty payment to 2.55% Following a period of active investment in our asset portfolio, the companyremains well funded, and at the period end had net cash resources of $20.7m. Outlook I look forward to the next 12 months which should prove to be a very excitingtime for your company as we carry out our main drilling programmes in Algeria,Italy and Ireland. Brian CusackChairman30th September 2005 Petroceltic International PlcConsolidated Profit and Loss AccountFor The Period Ended 30th June 2005 Unaudited Unaudited 6 Mths Ended 6 Mths Ended 30th June 2005 30th June 2004 US$ 000's US$ 000's Turnover 329 266Interest received 554 125Gain on disposal of investments - 133Foreign exchange gain - 114 883 638 Administration and operation expenses (591) (519)Depreciation and amortisation (45) (86)Exceptional item: cost of share awards (1,357) -Foreign exchange loss (35) - (2,028) (605) (Loss) / Profit on ordinary activities before taxation (1,145) 33Taxation - - (Loss) / Profit on ordinary activities after taxation (1,145) 33 (Loss) / Earnings per share - in cents (0.20) 0.01 Petroceltic International PlcConsolidated Balance SheetAs At 30th June 2005 Unaudited Unaudited 30th June 2005 30th June 2004 US$ 000's US$ 000's Fixed AssetsIntangible assets 11,814 1,716 Current AssetsDebtors 513 486Investments 57 1Cash at bank 20,674 14,656 21,244 15,143Creditors (Amounts falling due within one year) (1,108) (546) Net Current Assets 20,136 14,597 Net Assets 31,950 16,313 Capital and reservesCalled up share capital 23,727 22,579Capital conversion reserve fund 51 51Share premium account 74,518 58,833Profit and loss account (66,346) (65,150) Total shareholders' funds (all equity interests) 31,950 16,313 Petroceltic International PlcConsolidated Cash Flow StatementFor The Period Ended 30th June 2005 Unaudited Unaudited 30th June 2005 30th June 2004 US$ 000's US$ 000's Net cash (outflow)/inflow from operating activities (3,877) 1,286 Returns on investmentsInterest payable - (4)Interest received 554 125 554 121 Capital expenditure and financial investmentExpenditure on intangible assets (5,343) (368)Sale of investments - 133 (5,343) (235) Net cash (outflow)/inflow before financing activities (8,666) 1,172 Financing activitiesRepayment of bank loan - (278)Issue of shares, net of expenses - 12,432Net cash inflow from financing activities - 12,154 (Decrease)/Increase in cash (8,666) 13,326 Reconciliation of net cash flow to movement in net debt(Decrease)/Increase in cash during the period (8,666) 13,326Cash outflow from repayment of debt - 278 Movement in net debt in the period (8,666) 13,604 Net funds at start of period 29,340 1,052 Net funds at end of period 20,674 14,656 Net funds is analysed as follows: Cash at bank 20,674 14,656 20,674 14,656 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
PCI.L