17th Dec 2009 07:00
Dublin
17th December 2009
Petroceltic International plc
Petroceltic increases its interest in Italy's B.R268.RG permit (the Elsa discovery) from 40% to 70% and takes over as Operator
Petroceltic International plc ("Petroceltic" or "the Company"), the upstream oil and gas exploration and production company focused on North Africa and the Mediterranean is pleased to announce it has signed a Farm-in Agreement ("the Agreement") with Vega Oil S.p.A. ("Vega"), a wholly owned subsidiary of Cygam Energy Inc. (CYG: TSX Venture Exchange) to increase its participating interest in permit B.R268.RG ("the Permit"), which includes the Elsa discovery, offshore Italy, from 40% to 70%. Petroceltic will also assume operatorship of the Permit. Vega will retain a 30% interest.
Under the Agreement, Vega will transfer a thirty per cent (30%) participating interest in the Permit to Petroceltic and in exchange Petroceltic has agreed to pay one hundred percent (100%) of the drilling and completion costs for the proposed Elsa-2 well ("the Well").
Petroceltic and Vega have agreed that, from the effective date of the Agreement, de facto operatorship of the Permit shall be transferred from Vega to Petroceltic and Petroceltic shall become the operator with respect to all operations conducted in relation to the Permit under the Elsa Joint Operating Agreement.
In September 2009, DeGolyer and MacNaughton Canada Limited ("D&M"), a worldwide petroleum and engineering consulting firm, prepared a report for Cygam Energy and determined that a best estimate, as detailed in the table below, of the unrisked contingent recoverable oil and gas resource attributable to the 13.65 km2 Elsa structure identified in the Permit is 104.23 million barrels of oil and 31.49 Bcf of gas.
|
Elsa discovery |
Low Estimate |
Best Estimate |
High Estimate |
|
|
(P10) |
(P50) |
(P90) |
||
|
Oil in place MMbbls |
403 |
521 |
556 |
|
|
Recovery Factor |
10% |
20% |
30% |
|
|
Oil MMbbls |
40.3 |
104.2 |
166.7 |
|
|
Gas BCF |
4.3 |
31.5 |
89.4 |
|
|
Contingent Resources Mmboe |
41.0 |
109.7 |
182.1 |
|
|
Net Petroceltic at 70% Interest Mmboe |
28.7 |
76.8 |
127.4 |
Brian O'Cathain, Chief Executive of Petroceltic, commented: "The transfer of operatorship and the opportunity to increase Petroceltic's interest in B.R268.RG to 70% demonstrates our commitment to Italy and to the Central Adriatic as a core area for the Company. We look forward to continuing our partnership with Vega with whom we have been working constructively since 2006. We now believe Petroceltic is well placed to attract a new partner in early 2010 to exploit the Elsa discovery and the additional potential in this exciting new play fairway, in which Petroceltic holds 10 exploration licences at 100% working interest".
Ends
For further information, please contact:
Petroceltic
Brian O'Cathain Chief Executive Tel: +353 (1) 421 8300
Alan McGettigan Finance Director
Pelham PR
Philip Dennis Tel: +44 20 7337 1516
Klara Kaczmarek Tel: +44 20 7337 1524
Murray Consultants
Joe Murray Tel: +353 (1) 4980300
Davy
Hugh McCutcheon Tel: +353 1 6796363
John Frain
Fabrice Toussaint, Head of Petroleum Engineering, Petroceltic International plc, is the qualified person who has reviewed and approved the technical information contained in this announcement. Mr. Toussaint holds a Diploma in Engineering from the Ecole Nationale Supérieure de l'Aéronautique et de l'Espace, Toulouse, and has over 17 years experience in oil & gas exploration and production. He is a member of the Society of Petroleum Engineers.
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 Stock Exchange's IEX Market. The Company has exploration and appraisal assets in Algeria, Tunisia and Italy.
The Elsa-1 well, drilled by ENI in 1992 (with partners Elf and Enterprise Oil), encountered a 65m oil column in the dolomitised early Cretaceous Maiolica Formation. Oil was recovered to surface after a sub-optimal open hole drill stem test. The well was not completed or properly tested at the time due to low oil prices. The dolomitised early Cretaceous Maiolica formation play was subsequently proven as commercial by the drilling of the Miglianico-1 discovery well on the adjacent Miglianico field in 2001. Miglianico-1 tested 2,500 bpd of 34 API Oil from the Maiolica formation.
Related Shares:
PCI.L