Petroceltic International on Monday announced the approval by the Council of Ministers in Algeria of its sale of an 18.375% interest in the Isarene PSC to Enel Trade SpA (Enel).
This is the final stage of the approval process relating to the transaction between Petroceltic and Enel, announced in April, and paves the way for completion of the transaction within 5 days and the settlement of all amounts outstanding within 30 days thereafter.
Under the terms of the agreement ENEL has:
o Agreed to pay up to US$ 36.75 million to Petroceltic, which equates to 24.5% of all back costs incurred from signing of the PSC in 2005 until the end of the exploration period in April 2010;
o Committed to fund 49% of the cost of the first six appraisal wells in an enlarged Isarene appraisal campaign and of a contingent additional well, of which costs are capped, in aggregate, at US$ 145 million; and
o Agreed to pay Petroceltic a contingent cash consideration, up to a maximum of US $75 million, such amount determined by a number of factors based the results of the appraisal programme, such as the overall level of reserves and the production profile.
Amounts outstanding under this agreement or to be paid under cash call arrangements relating to the 2011 appraisal programme, currently exceed $103 million.
Upon completion, Petroceltic will operate the permit with a 56.625 % interest, Sonatrach will maintain a 25% interest, and Enel will hold an 18.375% interest.
Brian O'Cathain, Chief Executive of Petroceltic commented: "We are delighted to announce that the final approval in Algeria of the Enel transaction has been granted which will allow for the deal's swift completion in the coming days. We look forward to formally welcoming Enel as an important new partner to the Isarene licence. This transaction, allied to the excellent results from our appraisal campaign, has confirmed the quality and value of our Algerian asset and provides a firm foundation for the ongoing growth and diversification of our business"
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