Petroceltic: Bank Waiver Extended
Edison | Jan 19, 2016 07:43AM ET
Bank waiver extended
During 2015, Petroceltic's (L:PCI) combination of adjustments to reserves (after a 2014 CPR), drop in oil prices and reduction in the capex programme reduced the availability of the senior bank facility and led to a requirement to make material repayments on the company’s loans. Petroceltic was not able to make these repayments and continues to seek ways to secure additional financing, create liquidity and/or reduce financial commitments. On 23 December, the company initiated a strategic review with a view to considering all options to maximise value for stakeholders. It has received a number of conditional proposals and expressions of interest for its assets – negotiations are ongoing. Given the limited liquidity available to Petroceltic, the lender group agreed to waivers until 15 January. On 18 January, these waivers were extended until 29 January. In view of the strategic process we are withdrawing our forecasts and valuation.
Summary of financial position
In December, Petroceltic held $28.1m in cash, with $24.6m held in local currencies that are not readily convertible. The company has agreed to sell its interests in the North Thekah, North Port Fouad and South Idku exploration licences to its joint venture partner Edison, for net cash consideration of $9.5m. This will reduce its 2016 outgoings by $20m and the proceeds will go to repay debt. Additionally, Petroceltic has transferred its interest in the Patraikos licence offshore Greece to its joint venture partners.
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