Algeria: ENEL takes Isarene block farmout

By OGJ editors
HOUSTON, Apr. 28
– ENEL Trade SPA, Italy’s largest power producer, is to acquire an 18.375% interest in the Isarene production sharing contract on blocks 208 and 209a held by Petroceltic International PLC in eastern Algeria.

The PSC contains the world class Ain Tsila gas-condensate discovery.

ENEL agreed to pay Petroceltic as much as $36.75 million or 24.5% of all back costs on the PSC. ENEL will 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, drilling in the horizontal section, and of a contingent additional well. Total costs are capped at $145 million.

ENEL also agreed to pay Petroceltic a contingent consideration of up to $75 million cash determined by the level of recoverable hydrocarbon reserves approved by the Algerian authorities in the final discovery report, expected to be submitted in early 2012.

ENEL and Petroceltic will fund any over-budget costs in proportion to their participating interest.

Assignment of the interest to ENEL has been submitted for approval to Sonatrach, which is a 25% partner in the PSC, and is also subject to the usual approvals by Algerian regulators. Petroceltic will continue as permit operator.

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