Petroceltic shares dip as full year losses widen

Oil and gas explorer Petroceltic posted a $271.9m pre-tax loss on Monday, sending its share price lower.

Petroceltic shares were at 104p at 8:51 on Monday, falling by 4.15% off their opening price after the company posted its full-year result.

The company, which last year posted a pre-tax loss of $4.5m, attributed its widening loss to exploration write-offs of $183m.
The write-offs were linked to unsuccessful wells in Kurdistan, Romania and Egypt and the company also had an impairment charge of $86m.

Petroceltic produced 22.4m barrel of oil equivalent per day, of which 19.3Mboepd relates to Egypt and 3.2Mboepd to Bulgaria.

However it revised its production guidance to 14-15mboepd.

It said in its announcement revenue of $157m supported a capital programme of $109m.

Petroceltic chairman Robert Adair said the firm delivered on production targets but acknowledged exploration results were challenging.

“In light of this and the current industry climate, the group has de-emphasised certain exploration initiatives and is focusing its strategy on its core development and producing assets in order to generate greater value for shareholders.”

Westhouse Research reiterated its ‘neutral’ rating on the stock and its 127p target price. It said in a note the result was likely to reduce earnings forecasts by 10-15%.

Analyst Mark Henderson said the result highlighted the challenges Petroceltic faced in the current market.

“The heavy write-down reflects the disappointing exploration performance in Kurdistan last year and the downward revision to production guidance is concerning, forcing the company to reorganise its medium-term funding at a less than ideal time,” Henderson said in a research note e-mailed to clients.