ENI’s Super Discovery in Egypt Lifts Petroceltic's Appeal

Source: Algeria Times 9/19/2015, Location: Africa

ENI's new discovery could potentially be worth up to US$135mln to Petroceltic, Davy says.

ENI’s very large new gas discovery in Egypt looks as though it may extend into Petroceltic’s (LON:PCI) acreage, according to Dublin based broker Davy.

Zohr, ENI’s new discovery, is estimated to contain some 30 trillion cubic feet of gas and as such it is designated as a ‘super discovery’, Davy analyst Job Langbroek highlighted in a note.

Langroek, meanwhile, also points out that the physical footprint of the discovery “may well” crossover into Petroceltic’s 50% owned North Port Fouad block.

Some 5-10% of the ENI discovery could be within Petroceltic’s acreage, according to Langbroek.

Not only would that increase the value of North Port Fouad, but, it also makes Petroceltic “more relevant” to possible mergers and acquisition suitors, the analyst added.

“If we assume that 7.5% is in the North Port Fouad block, then Petroceltic’s 50% stake is worth US$115-135m or 35-41p per share,” he said.

“This is preliminary – especially in the context that there is no confirmation that Zohr extends into the North Port Fouad block – and not risked. However, even if a very large discount is applied, the value implication is material – especially in the context of the current share price.

Langbroek summarises that Petroceltic’s current price represents an opportunity for suitors looking to build a gas position in the MENA region to acquire assets - Zohr discovery implications, on-going progress in Algeria and Italian portfolio development - at “a sharply reduced equity value.

Davy has an ‘outperform’ rating for Petroceltic.

A potential fly in any M&A ointment may potentially be the company’s current dispute with activist major shareholder Worldview.

Petroceltic, which is listed in London and Dublin, after Wednesday’s market close announced it had begun legal proceedings to secure an injunction to stop Worldview proceeding with what Petroceltic says is an unlawful attempt to hold an extraordinary general meeting (EGM) of the company’s shareholders.




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Related Categories: Coal  Electricity  General  Natural Gas  Oil 

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