Petroceltic Gears Up for Italy/Kurdistan Drilling Campaign

by Dow Jones Newswires

Iain Packham

Thursday, August 09, 2012

LONDON - Dublin and London-listed oil company Petroceltic International is expecting to drill two wells in Italy next ear, as it seeks to take advantage of the cessation of an offshore drilling ban, and at least one in Kurdistan where its partner is moving towards a drilling target, Chief Executive Brian O'Cathain said Thursday.

"Next year's going to be very busy," the CEO told Dow Jones Newswires Thursday.

In 2010, Petroceltic's plans to drill an appraisal well on the Elsa discovery in the Central Adriatic were scuppered when Italy banned offshore drilling in reaction to the Macondo incident in the Gulf of Mexico. With the ban now lifted, Mr. O'Cathain is hopeful a well can be drilled in 2013.

"When the Italy ban came in, we were within months of spudding an appraisal well on the Elsa field, which is an old oil discovery of somewhere between 30 million and 180 million barrels, made by ENI S.p.A. (ENI.MI) in 1992. We have a CPR [competent person's report] that says the most likely oil-in-place is a couple of hundred million barrels," the CEO said.

"We would fully intend to go back and drill that appraisal well. We had a lot of funding in place for that well in 2010 most of which is still there," he added.

Before it starts drilling, however, the company has to reapply for a permit, but Mr. O'Cathain believes that the current government is very favorably disposed towards restarting exploration and production activities.

Petroceltic operates the B.R268.RG Permit, where the discovery lies, with a 55% interest.

Separately, the company also expects a well to be drilled on its 47.5%-owned Carisio block, operated by ENI, and located to the West of Milan in the Lombardy and Piedmont Regions. The companies are targeting a 250 million barrel prospect, Mr. O'Cathain said.

Finally, in the Kurdistan region of Iraq, where Petroceltic has a 16% interest in two blocks--Dinarta and Shakrok--the operator Hess Corp. is planning to drill a well on Shakrok around this time next year, Mr. O'Cathain said. The companies are currently undertaking a seismic survey program over the blocks.

Hess operates the highly prospective Dinarta and Shakrok blocks with a 64% working interest and an 80% paid interest. Petroceltic has a 16% interest but pays 20% of the costs. The Kurdistan Regional Government has a 20% interest in the blocks with its costs carried by Petroceltic and Hess.

Petroceltic is fully funded to the end of 2013, Mr. O'Cathain said.

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