Petroceltic's Ain Tsila 'Delight' Soured by Wrangle
Ireland-based Petroceltic is “delighted” with the first of its development wells on its Algerian Ain Tsila gas/condensate field. However a legal battle against a rebel shareholder rumbles on, with trading of Petroceltic shares suspended on Dublin and London exchanges since March 7.
Worldview – a Cayman Islands-based fund that owns 29.6% of Petroceltic – previously failed to wrest control of Petroceltic’s prize asset, its 38.25% operated interest in Ain Tsila. It has since tried to take over Petroceltic itself. On March 4, the fund petitioned the High Court of Ireland to appoint an Examiner to Petroceltic and its subsidiaries and to put them under the court’s protection. Full hearing of this petition was postponed until April 8, from April 4, at which point the application for appointment of Michael McAteer of auditors Grant Thornton as Examiner will be heard in full.
Under Irish law, an Examiner may be appointed by the court to carry out a corporate restructuring during a fixed 70 day period, extendable to 100 days. McAteer acted as Examiner to Irish construction firm SIAC in 2013 and Eircom, Ireland’s largest telecoms provider in 2012, neither of which folded.
In early March, Worldview, led by Switzerland-based Angelo Moskov, bought almost 70% of Petroceltic debt after its £0.03 per share offer for the Dublin-based explorer was rebuffed. On April 4 the fund said it had ”disposed of” 32% of Petroceltic’s outstanding debt, without saying to whom, but retains 37.44% of the debt. Moskov has been a rebel Petroceltic director since February 2015.
Petroceltic’s management meanwhile continues to focus on developing the Ain Tsila asset.
On April 5, it said development well AT-10 began drilling on February 21 2016 and reached a total depth of 2005 meters on March 31. “Wireline logging results from the well indicate that reservoir quality is in line with the pre-drill prognosis, with an expected initial off-take rate comparable to AT-1 and AT-8 wells, each of which delivered flow rates in excess of 30mn ft3/d on test.”
Petroceltic CEO Brian O'Cathain said: "We are delighted that AT-10 result confirms the success of earlier wells in the highly productive northern part of the field. The Sinopec rig performed above expectations on its first well and we have a number of improvement initiatives planned to reduce future well costs, mitigate development risks on Ain Tsila and maintain momentum towards first gas.”
The rig will now be moving to the AT-13 development well, in the north of Ain Tsila field; it will be drilled as a vertical well to a planned 2004 meter depth. It could drill up to 24 wells in total.
Petroceltic holds 38.25%, Algerian state producer Sonatrach 43.375% and Italian utility Enel 18.375% in the Isarene PSC, which includes Ain Tsila. Petroceltic continues to benefit from a carry of its Ain Tsila development costs as a result of selling a 18.375% interest to Sonatrach in July 2014.
In December, Petroceltic admitted its current best estimate for first gas from Ain Tsila is now early 2019, having slipped from 2017 a few years ago.
Mark Smedley