Petroceltic climbed 2 pence, or 20 percent, to 12 pence in London. The stock has fallen 7.7 percent this year, valuing the Dublin-based company at 241.7 million pounds ($402.2 million).
Enel agreed to pay a “contingent cash consideration” of as much as $75 million, determined by the level of recoverable hydrocarbon reserves, Petroceltic said in a statement today. The Italian utility has also committed to funding 49 percent of the costs of the first six appraisal wells of the Isarene project, which includes the Ain Tsila gas condensate discovery.
“Enel has a finger on the choke points of European gas demand,” Chief Executive Officer Brian O’Cathain said in a telephone interview today. “They’re Sonatrach’s second largest customer and a great partner.”
When the sale is completed, Enel will control about 18 percent of the Isarene contract, Algerian National oil company Sonatrach will control 25 percent and the remainder will be held by Petroceltic. Enel is Sonatrach’s main end-user customer of Algerian gas, the explorer said.
The partnership means Petroceltic will be able to complete six versus four appraisal wells. Ultimate recovery factors range from 30 percent to 70 percent, according to a company presentation. Petroceltic plans to submit a drilling plan by early next year, O’Cathain said.
Protests and violence elsewhere in the Middle East and North Africa have not affected Petroceltic operations in Algeria, the executive said.
“Anyone who works in Algiers knows it’s a very different place from Libya,” he said. “We monitor the situation closely, but there has been no signs of the unrest you’ve seen elsewhere.”
To contact the reporter on this story: Kari Lundgren in London at email@example.com