Petroceltic Sells Egyptian Licenses to Edison - RIGZONE

by Rigzone Staff|Thursday, February 18, 2016

Petroceltic International plc has completed the sale of the North Thekah, North Port Fouad and South Idku exploration licenses in Egypt to its joint venture partner Edison International S.p.A, for a cash consideration of $9.5 million.

Following government approvals and the waiver of pre-emption rights held by the Egyptian Natural Gas Holding Company, the transaction has now formally completed and funds have been received. The company first announced that it had reached an agreement to sell the licenses to Edison in December last year.

Commenting on the transaction, Petroceltic Chief Executive Brian O’Cathain said in a company statement:

“This sale continues our strategic initiative, announced in early 2015, to focus the company on the Ain Tsila development in Algeria.”

Petroceltic moves to restructure Mediterranean footprint | Forbes

December 31, 2015, Christopher Coats

The sustained decline of global oil prices is forcing one company to reassess their position in the Eastern Mediterranean, despite strong potential in neighboring projects.

According to media reports, Petroceltic has initiated a “strategic review” of its operations and assets to address looming debt payments in the New Year.

Specifically, this includes efforts in Egypt and Greece in hopes of dealing with the more than $200 million in debt it currently faces.

For the company’s presence in Egypt, this means the sale of its interests in the North Thekah, North Port Fouad and the onshore South Idku licenses to joint partner Edison International.

According to a company statement, the “transaction remains subject to the receipt of Government approvals and the waiver of pre-emption rights held by the Egyptian Natural Gas Holding Company (“EGAS”) and is expected to complete in the first quarter of 2016. The sale of these interests will reduce Petroceltic’s exploration expenditure obligations in 2016 by approximately US$20 million. Petroceltic expects to record a loss of approximately $1.5 million on this transaction and the proceeds of the sale will be applied to repayment of debt.”

The exit comes at a time when Egypt’s natural gas fortunes appear to be improving after several years of declining output and mounting debt. Earlier this year, Italy’s Eni announced the discovery of a “super giant” offshore well that some have argued could reshape the region’s energy landscape.

According to a Bloomberg report on the discovery, Eni outlined a potential “super giant” field that could potentially be home to 30 trillion cubic feet of gas, making it the biggest find in the Mediterranean. The discovery was initially thought to provide significant momentum to regional energy development, especially among those operating in Egypt.

However, that push may have come too late for Petroceltic as the company looks for lucrative means to exiting the country to address its debt obligations.

For the company’s efforts in Greece, this means taking leave from its interest in the Patraikos license in the Gulf of Patra.

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Petroceltic sheds stakes, mulls sale | OE Offshore Engineer

Petroceltic licenses in Egypt including the North Thekah and North Port Fouad offshore license blocks (Source: Petroceltic International plc Website)

Written by  Audrey Leon  Monday, 28 December 2015 

Petroceltic has opted to exit stakes in Greece and Egypt, following an announcement by the company's board that it has initiated a formal strategtic review of its business and assets due to breaching debt repayment obligations.

In the 23 December announcement, the company's board is also looking into several initiatives including farm-outs and a possible merger with a third party. The company currently has US$218 million in debt, and noted that pending new financing options, "the group does not have certainty on liquidity beyond early January 2016."

Petroceltic blamed the drop in oil prices and a reduction in capital investment programs in relation to its assets in Egypt and Bulgaria impacted the company's financing in 2015, requiring the company to make material repayments, which the company says it has not, to date, been in a position to satisfy. "In respect of these breaches of covenants and repayment obligations, the group has received various waivers from the lending group," Petroceltic said. "The most recent waiver under the Senior Bank Facility extends to 15 January 2016."

In Egypt, Petroceltic agreed to sell its interests in the North Thekah, North Port Fouad and the onshore South Idku exploration licenses to its joint venture partner Edison International for a net cash consideration of $9.5 million, after working capital adjustments of approximately $5.8 million. Edison is the operator of North Thekah and North Port Fouad and a joint venture partner in South Idku.

The transaction remains subject to government approvals and the waiver of pre-emption rights held by the Egyptian Natural Gas Holding Co. (EGAS). Petrocelctic expects the sale to complete by Q1 2016. 

"The sale of these interests will reduce Petroceltic’s exploration expenditure obligations in 2016 by approximately $20 million," the company said. Petroceltic expects to take a loss of approximately $1.5 million on the sale; the proceeds will be applied to repayment of debt.

The North Thekah concession was awarded in April 2013 and lies in the deepwater Nile Delta within an underexplored part of the Levantine Basin. Petroceltic had stated that the objectives, Nile Delta Oligocene and Levantine Basin Miocene plays, on trend with the giant Leviathan and Tamar discoveries offshore Israel. 

The North Port Fouad concession was awarded in September 2014 and is adjacent to North Thekah in the deepwater Nile Delta, directly adjacent to the Shorouk block where Eni recently discovered the massive Zohr gas field.

In Greece, Petroceltic concluded negotiations to exit its interest in the Patraikos licence by transferring its interest to its joint venture partners. 

The Patraikos licence is in the Gulf of Patra and covers an area of 1892sq km with water depths ranging 100-300m. Petroceltic had said that the license had unrisked mean prospective resources in the range of 80 MMbbl to 360 MMbbl for mapped prospects.

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Egypt Has 7 Other Blocks in Mediterranean Similar to Eni’s New Shorouk Discovery - EGYPT OIL & GAS

Thursday, 10th September 2015

Dr. Wafik Meshref, the Exploration General Manager at Sahara Oil & Gas Company told Egypt Oil & Gas that there are at least seven additional blocks in the Mediterranean Sea that have similar or twin lithology to Shorouk Block.

The Shorouk Block made headlines around the world last week when Italian oil major Eni announced a major gas discovery from it. The discovery is slated to be the biggest ever in Egypt and the Mediterranean.

The seven other blocks are: BP’s North El Max, IEOC’s North El Dikhalla, North Leil, and Karawan, Edison’s North Port Fouad and North Thekah, as well as Dana Gas’ North El Arish. These blocks could have reserves upwards of 200 tcf, but they require more daring and aggressive exploratory drilling plans. All the blocks are deepwater Mediterranean.

In May of 2010 the USGS issued a Geological Survey Fact Sheet of Assessment for Undiscovered Oil and Gas Resources of the Nile Delta Basin Province and Eastern Mediterranean. They estimated reserves of 1.8b barrels of recoverable oil, 223 tcf, and 6b barrels of natural gas liquids in the areas using a geology-based assessment methodology.

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