Petroceltic International said that it has sold 18.375% of its interest in the Isarene Production Sharing Contract (PSC) which includes the world class Ain Tsila gas condensate discovery, onshore Algeria, to ENEL Trade, a fully owned subsidiary of ENEL Europe’s second largest electricity utility company.
“The assignment is to be effected by way of a sale and purchase agreement under which, ENEL has agreed to acquire an 18.375% interest in the rights, benefits and liabilities of the PSC for the Isarene perimeter (Blocks 228 and 229a),” the company said in a statement.
Petroceltic retains operatorship with 56.635% interest.
The PSC was signed between Petroceltic and the Algerian National Company for Hydrocarbons “Sonatrach” in April 2005.
Under the terms of the agreement ENEL has agreed to pay $36.75m which equates to 24.5% of all back costs incurred from signing of the PSC in 2005 until the end of the exploration period in April 2010.
ENEL also committed to fund 49% of the cost of the first six appraisal wells in an enlarged Isarene appraisal campaign (including AT-4 which has been completed and the second well of the campaign, AT-5, currently drilling the horizontal section) and of a contingent additional well, which costs are capped, in aggregate, at US$ 145 million.
“ENEL agreed to pay Petroceltic a contingent cash consideration, up to a maximum of US $75 million, determined by the level of recoverable hydrocarbon reserves approved by the Algerian Authorities in the Final Discovery Report, which is expected to be submitted by the parties in early 2012,” Petroceltic said in the statement.
Petroceltic said that the assignment has been submitted for approval to Sonatrach which is a 25% partner in the PSC, and is also subject to the usual approvals by the Algerian regulatory authorities. Upon completion of the sale,
