Petroceltic to drill in Algeria next month

EXPLORATION COMPANY Petroceltic posted a loss of $5 million (€3.8 million) for the first six months of 2010, compared to a loss of just over $2 million in the same period last year, primarily due to a loss of $2.4 million in finance income.

However, the focus of analysts yesterday was on the drilling update from the company, which has assets in Italy, Algeria and Tunisia.

Petroceltic confirmed that its Algerian appraisal drilling programme would get under way next month. The three-well Ain Tsila appraisal drilling programme has been agreed, with an optional fourth well, while the first two well locations have been approved by Algerian state oil company Sonatrach, Petroceltic’s partner in Algeria.

The company’s Elsa-2 well preparations in Italy were suspended in July due to legislative changes, which may prohibit drilling for oil in Italian seas within five nautical miles of the coastline and within 12 nautical miles around the perimeter of protected marine parks.

The company, which is listed on the AIM market in London and Dublin’s ESM market, had cash of $108 million at period end.

Chief executive Brian Ó Catháin said “solid progress” had been made. “We have put in place the capital and resources to exploit our world-class discovery in Algeria, and have made good progress in Italy and Tunisia, despite challenging circumstances.

“We are focused on the exploitation of our valuable Algerian discovery first and foremost, and we remain confident that the appraisal programme for the Ain Tsila gas condensate field, due to start in October 2010, will further de-risk and demonstrate the value of this important asset.”

He said the company was exploring opportunities to expand the company’s portfolio further.