Petroceltic hires EY and HSBC to advise on fire sale – sources

19 Feb 2016 – Petroceltic [LON:PCI], an Irish oil and gas firm, has hired EY and HSBC to advise on the fire sale of its Egyptian and Algerian assets, a source and a person familiar with the situation said.

The latest round of sales come on the back of Petroceltic announcing it had successfully sold the sale of three of its 15 exploration licenses in Egypt to Edison International on 18 February. El Qa’a Plain, of which it owned a 37.5% stake, South Idku (75%), North Thekah (50%), and North Port Fouad (50%), were each divested as part of the company’s efforts to claw back capital after being severely hit by plummeting oil prices.

Petroceltic’s shares have lost about 85% of their value in the last 12 months. Its market capitalisation now stands at GBP 46.37m.

Petroceltic’s process to offload its Algerian and Egyptian assets began in January and is expected to conclude in the coming weeks, the source said.

The assets are expected to be sold separately, with the Egyptian process expected to conclude within the next few weeks. The process is a “two-horse race” between non-oil and gas industry players. Each bidder comes from the technology sector, the source said.

In Egypt, Petroceltic solely owns the operated interest in 12 producing fields in 14 development concessions in the El Mansoura and the South East El Mansoura concession areas. They include the West and East Dikirnis, West and South Khilala, Damas and South Damas, Tamad, South Zarqa, and East Abu Khadra oil and gas fields.

In Algeria, Petroceltic has a 38.25% stake in the Isarene PSC. Following the completion of the appraisal drilling campaign and technical and economic studies, a full field development plan for Isarene was submitted to the Algerian authorities and approved in December 2012. The plan envisages the production of 2.1 Tcf of sales gas and 179 MMbbl of liquids (comprising 69 MMbbl of condensate and 110 MMbbl of liquid petroleum gas) from the field during the 30-year Production Sharing Contract exploitation period, according to the company’s website.

On 23 December 2015, the firm appointed Bank of America Merrill Lynch (BAML) and Davy Corporate Finance to undertake a strategic review of the company and to conduct discussions with potential suitors. The same day, Petroceltic announced it had breached the covenants on its senior bank facility. The company’s debts stand at USD 200m (EUR 183m). The firm announced on 7 February it had received a further waiver of repayments under its Senior Bank Facility to 19 February 2016.

Subsequent to the 23 December announcement, EY was hired to advise on Petroceltic’s restructuring and the decision was made to explore selling assets, the source said.

The firm also has assets in Bulgaria, Italy and Greece.

Petroceltic, EY, BAML and HSBC declined to comment.

by Katie McQue

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