Petroceltic Contracts Rig from KCA Deutag for Algeria Drilling Program
Petroceltic has now signed a fully termed contract with KCA Deutag for their Nomad class drilling rig T-212. This contract is subsequent to the Letter of Intent announced in November 2008.
The T-212 rig is a new drilling unit which will be utilized for the Company's seven-well drilling and testing program on the Isarene permit in Algeria to which it is currently en route having been mobilized from Germany.
This seven-well program, currently expected to commence in April, will focus on appraising gas and oil discoveries already made on the Isarene permit by Petroceltic and previous operators. In total, the program is expected to take approximately 9-10 months to complete and will be funded from the proceeds of the US $55 million investment in Petroceltic by Spanish energy company Iberdrola in June 2008.
Petroceltic has a 75% interest in the Isarene permit in association with Sonatrach, the Algerian state Oil and Gas Company, which holds the remaining 25%.
Update on Strategic Alliance with Iberdrola
The above announcement is further indication that, following the US $55m investment completed in August 2008, Petroceltic and Iberdrola continue to work together to add value to Petroceltic's portfolio of assets. In accordance with the terms of the financing option agreement, entered into by Petroceltic and Iberdrola at the time of the initial investment in June 2008, Petroceltic will shortly receive the US $7.33m advanced payment of the financing option. Petroceltic looks forward, subject to further regulatory approvals, to working closely with Iberdrola to further develop the Company's assets.
Brian O'Cathain, Executive Chairman of Petroceltic commented, "With this rig contract in place and the forthcoming drilling program scheduled to start in April, we now hope to take significant steps towards the commercialization of the gas already proven on the Isarene permit over the next twelve months. Recent supply chain events in the European Gas Market have highlighted the importance of Algerian gas to Europe and we look forwards to collaborating with Sonatrach to deliver the gas potential of the Isarene Permit."
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