Annual Report & Accounts 2013




Implementation of a country level HSES management system

Formulation of a new Carpignano Sesia-1 drilling plan to reduce environmental impact

Award of the new licence offshore Adriatic, BR272EL which contains the high-ranked Turchese prospect

Daisy on the Ohoopee The past year has seen steady progress on the Group’s Italian assets, building on the new atmosphere surrounding oil and gas exploration activities in the country following the issue of the National Energy Strategy decree in March 2013. The primary focus has been on maturing the high value prospect inventory in parallel with implementation of a country level HSES management system. Engagement with national and local institutions is ongoing in order to identify ways to work in partnership, to demonstrate that exploration activity can safely deliver tangible benefits to local communities and the government, and to find new reserves that can support the national goal of doubling Italian oil and gas production by 2020.

Western Po Valley +-

During 2013, Eni (as operator) and Petroceltic have continued to progress the permitting process for the Carpignano Sesia-1 well, on the Carisio permit in the Po valley. This well is being designed to test a large oil prospect, which has gross mean unrisked prospective resources of 237MMboe. Petroceltic has a 47.5% equity interest in the licence.

In order to provide time to address specific stakeholder concerns regarding the proximity of the proposed well site to the village of Carpignano Sesia, during 2013 Eni submitted an application to the Ministry of Economic Development requesting a suspension of the Carisio permit. This suspension has recently been granted and the joint venture has taken the opportunity to review the well site location and propose that it is moved further away from the village. The next step will be to continue a dialogue with the local community, followed by a formal resubmission of the Environmental Impact Assessment and well permit approvals request. Petroceltic intends to farm-down a portion of its interest in advance of drilling Carpignano Sesia-1.

Central Adriatic +-

The Group’s main operated asset in Italy is the Elsa oil discovery, offshore Abruzzo, which contains 95 MMbbls of gross contingent resources (Petroceltic 55%). The field requires further drilling and flow testing before it can be declared commercial and 2013 saw continued progress in preparations for the re-launching of the Elsa-2 well project. The drilling and well testing programmes have been refined and various field development concepts have been reviewed to help minimise the potential environmental impact. The Group is now embarking on a series of consultative discussions with the government and local institutions to ensure their views on the project are taken into account prior to formally re-launching the project.

In April 2013, Petroceltic was awarded exploration permit “B.R272.EL”, a new addition to the Company’s Central Adriatic portfolio. This permit covers an area of 474 sq km and lies approximately 15 kms from the Elsa discovery and the producing Rospo Mare field. The permit was awarded on a 100% basis to Petroceltic. The work programme for the initial six year phase of the exploration permit includes 3D seismic acquisition. The seismic acquisition will involve industry “best practice” techniques to limit impact to marine mammal populations, including the deployment of qualified, independent marine mammal observers, survey exclusion zones and “soft start up” procedures.