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.
(oedigital.com)