Petroceltic completes Algeria farm-out transaction
Petroceltic International plc (“Petroceltic” or “the Company”), the independent oil and gas exploration and production company focused on the Middle East, North Africa, Mediterranean and Black Sea regions, is pleased to announce the completion of its sale of an 18.375% interest in the Isarene PSC to Sonatrach, the National Oil and Gas Company of Algeria.
The assignment was effected by way of a sale and purchase agreement, under which Sonatrach has acquired a further 18.375% interest in the Isarene PSC covering Blocks 228 and 229a. The amendment to the Isarene PSC (or ‘Avenant’) required to give effect to the transfer was signed by Sonatrach, Petroceltic and Enel at a ceremony in Algiers on 12 February 2014. This was subsequently ratified by the Algerian Council of Ministers and completion occurred with the publishing of the Avenant in the official journal of Algeria on 18 June 2014 which was made available publically on 7 July 2014.
The terms of the agreement with Sonatrach provide for a consideration of up to a maximum amount of US$180 million. The consideration comprises US$20 million payment on this completion of the transaction, a further US$140 million payment of Petroceltic’s share of Ain Tsila project development cost from the effective date of 4 July 2013, and contingent payments of up to US$20 million based on the achievement of certain project related milestones.
Post completion, Petroceltic has a 38.25% interest, Sonatrach has a 43.375% interest, and Enel maintains its 18.375% interest. Petroceltic remains operator of the license.
Brian O’Cathain, Chief Executive of Petroceltic, commented:
“We are delighted to announce the completion of the Sonatrach farm-out. Petroceltic has had a positive and mutually beneficial relationship with Sonatrach throughout the exploration, appraisal and now development phases of the Isarene PSC. The formal ratification of this agreement is a critical step in the overall funding plan for this development project. As development operations ramp-up, we look forward to continuing to work with Sonatrach and Enel to deliver the Ain Tsila Project and to maximise the value of this important national resource for Algeria”