Petroceltic secures €392 million in financing

Oil and gas exploration firm Petroceltic has secured up to $500 million (€382 million) in financing from a syndicate of international banks and the International Finance Corporation (IFC), a member of the World Bank Group.

The money replaces a $300 million (€229 million) bridge facility provided to the Dublin and London listed firm by HSBC last year to support the £165 million (€193 million) takeover of Melrose Resources.

The loan is for a five-year term, extendable by two years, and can be drawn down to support existing business, future exploration and potential future acquisitions.

Up to $125 million (€96 million) of the loan will be made available only if agreed milestones are reached in the development of the Ain Tsila gas condensate field in Algeria, which is expected to start production in 2017.

Petroceltic’s chief executive Brian O’Cathain said the deal represented “a strong technical and financial endorsement of the quality of our producing assets and longer term growth ambitions”.

Davy analyst Job Langbroek described the debt package as "an important and positive development for the group".

“It provides a funding platform to develop the Ain Tsila project in Algeria while at the same time ensuring the availability of capital to properly develop the assets and opportunities across the rest of the group,” he said.

Petroceltic has forecast a production range of 25 to 27 thousand barrels of oil equivalents per day for 2013. As part of expansion plans announced in January, the company revealed intentions to explore wells across Greece, Egypt, Bulgaria, Romania and Kurdistan this year.