Petroceltic expects Algeria report soon

EXPLORATION GROUP Petroceltic expects to begin providing shareholders with detailed information from drilling in Algeria next September.

Last month, the company began drill testing in the Isarene region of Algeria, where it holds an exploration licence. It intends tackling seven wells in total. Chief executive Brian O’Cathain told shareholders at the company’s annual general meeting in Dublin yesterday that it had already established that the area contains gas.

“The question is, does it flow at a commercial rate?” Mr O’Cathain explained. He told the meeting that the drilling was designed to establish this. The company will begin informing shareholders of progress in late summer or autumn. Mr O’Cathain said that the key announcements would relate to the rate at which gas flowed from the wells. This helps to establish how commercial and productive the wells might be.

“The first announcement is due in and around September and then they will be coming fairly consistently for the rest of the year,” the chief executive said.

Petroceltic has to agree any announcements with its partner in the exploration licence, Algerian state company Sonatrach.

The area is 80km from the main pipeline connecting the North African country with the European network. Algeria is a key supplier of natural gas to the EU.

Spanish energy group Iberdrola, which is a shareholder, has the option of taking 36.75 per cent of the Isarene interest from the Irish company’s 75 per cent stake, in return for $55 million.