PCI.L Regulatory News (PCI)

20 Mar 2006 07:00

Petroceltic International PLC20 March 2006 Petroceltic International plc ("Petroceltic" or "the Company") Award of Algerian Drilling Contract and Execution of US$25 million Underwriting Agreement Petroceltic is delighted to announce the award of a major drilling contract toSchlumberger for the Company's 2006 drilling programme in Algeria in addition tothe execution of a US$25 million underwriting agreement with funds managed byRAB Capital plc ("RAB"), in conjunction with a placing of new ordinary shares of€0.0125 each ("Ordinary Shares") to new and existing shareholders of the Company(the Placing). The RAB Underwriting Agreement The Company has entered into a conditional underwriting agreement whereby RABhas agreed to underwrite 102,000,000 new Ordinary Shares at a placing price of14p with a total value of approximately US$25 million, subject to a minimumparticipation by RAB of approximately US$12 million in the Placing. The Partiesto the Underwriting Agreement anticipate the Placing to be completed by no laterthan 31st March 2006. Algerian 2006 Drilling Programme The 2006 programme provides for the drilling and testing of two appraisal wellson the Company's Isarene blocks 228 and 229 in the Illizi Basin of Algeria. Bothwells will have multi targets in the Carboniferous, Devonian and Ordovicianzones and will each be drilled to a depth of approximately 2,300 metres. It iscurrently expected that drilling operations will commence by the end of June2006. The Company points out that this initial drilling programme is the startof a planned multi-well drilling and seismic programme to be carried out on itsAlgerian acreage over the next three to four years. Award of Drilling Contract to Schlumberger Schlumberger won a competitive tendering process initiated by the Company andits Algerian partner Sonatrach last December. Schlumberger was awarded thecontract because of its technical competence, its recent Algerian experience andbecause it offered the most comprehensive project managed proposition. TheSchlumberger award is subject to the completion of legal and normal regulatoryprocesses. Schlumberger's most recent Algerian experience is on Block 245 operated byRosneft of Russia which is immediately adjacent to the North East ofPetroceltic's block and where Schlumberger on behalf of Rosneft has justcompleted the drilling of a third consecutive oil and gas discovery. Thesediscoveries are in a similar geological setting to Petroceltic's Isarene acreageand the application of Schlumberger's technologically advanced drilling, loggingand well testing services played a key role in this success and these factorswere therefore recognised in the tender award. Another key factor in awarding the contract to Schlumberger was the nearimmediate availability of a drilling rig in a fiercely competitive rig market.The rig will be available to Petroceltic immediately after the completion of theRosneft drilling programme, which, depending on the results, is estimated to beby the end of June. Schlumberger will start preparatory work immediately on theCompany's two drilling sites to facilitate a prompt mobilisation. John Craven CEO of Petroceltic commented: "We are delighted that Schlumberger will be drilling Petroceltic's first wellsin our large Algerian block. They offered the best technical package and theirrecent success with Rosneft will bring huge benefits to Petroceltic. We are also delighted to have an institution with the calibre of RAB as asignificant shareholder particularly given their commitment, financial expertiseand success in the oil and gas sector. The execution of a $25 million underwriting agreement coupled with the award ofthe drilling contract gives the Company "sprint capacity" to complete itsaggressive 2006 drilling programme which includes the two wells in Algeria andone well offshore Ireland as previously announced. Plans are already underway toincrease the level of the Company's drilling activity during 2006 and 2007 whichmay include drilling additional wells in Algeria, offshore Italy and re-enteringand testing the Sidi Toui 3 in Tunisia." For further information, call: John Craven, Petroceltic International plc 00353 1495 9285 Billy Clegg/Edward Westropp, Financial Dynamics 020 7831 3113 Notes on Petroceltic's Algeria Block Name: Isarene (Blocks 228/229) Location: Illizi Basin - 60kms south of Total/Repsol's TFT giant oil and gas field Nearby Operators: BP, Rosneft, Medex, Total, Repsol Contract: Production Sharing Contract Area: 10, 800 sq kms (Equivalent to 44 North Sea Blocks) Partners: Petroceltic 75% (Operator), Sonatrach 25% Exploration Period: 5 years (April 2005 to April 2010) Exploitation Period: 25 years oil, 30 years gas Number of Existing 10Gas Discoveries: Number of Existing 2Oil Discoveries: Reservoir Targets: Carboniferous, Devonian, Ordovician Drilling Target Depth: 500 to 2,400 meters Nearby Infrastructure: Oil - Tiffernine (Repsol) 15kms Gas - TFT (Total) 60kms In Amenas (BP) 120kms This information is provided by RNS The company news service from the London Stock Exchange