Annual Report & Accounts 2013




Processed and interpreted 2,000 sq km of 3D seismic acquired in 2012

Identified prospects and leads with unrisked resource potential of 2 Tcfe to 3 Tcfe

High graded two prospects as near term drilling targets

Drilled the Company’s first Romanian exploration well, South Cobalcescu-1

romania map

Petroceltic is the operator in two offshore exploration concessions in the Romanian sector of the Black Sea with a 40% operated interest in each. The licences, EX-27 Muridava and EX-28 Est Cobalcescu, are located in shallow water and have a combined area of approximately 2,000 sq km. Both blocks are historically under-explored, although the undeveloped Olimpiskiyi gas discovery lies within the Muridava licence.

During the year, the Group carried out an extensive programme of well planning, permitting and preparatory works and towards year end completed its first exploration well, South Cobalcescu-1, on the permits.

The drilling campaign commenced in August when the South Cobalcescu-1 well was spudded in Block EX-28 Est Cobalcescu, 170 kilometres northeast of Constanta in a water depth of 89 metres. The well was drilled by the GSP Prometeu jack up drill rig to a total depth of 3,298 metres and encountered good quality sandstone reservoirs at the target Miocene stratigraphic levels with gas shows whilst drilling, indicating an active hydrocarbon system. However commercial quantities of hydrocarbons were not present and consequently the well was plugged and abandoned.

The second exploration well in the drilling campaign, Muridava-1 was initiated on the Muridava (EX-27) Licence on 11 April 2014, and is drilling ahead on the same geological trend as the existing Olimpiskiyi and Eugenia gas discoveries. The well is expected to take two months to complete, and is targeting gross mean unrisked prospective resources of 185 BCF
from the Eocene, Paleocene and Upper Cretaceous intervals.

In parallel with the operational activity and integration of well results, the Company has been conducting structural, stratigraphic and seismic studies to better define the prospectivity of these blocks. This work has yielded a significant prospect inventory composed primarily of biogenic gas prospects, with some oil prospect potential. Features have been identified in both blocks in the Miocene, Eocene and Cretaceous formations with further higher risk potential in the deeper Jurassic and Triassic formations.

The licences have a three year initial exploration term which commenced in October 2011 and which may be followed by two optional extensions totalling up to seven years. The initial three year minimum work programme for each block comprises seismic acquisition and three wells. Given the recent drilling delays, the Romanian licencing authority has recently approved an 18 month extension to the initial exploration period.

The Block EX-27 partnership comprises Petroceltic Romania B.V. (40% equity and operator), Midia Resources S.R.L. which is a wholly owned subsidiary of Sterling Resources Ltd (40% equity) and Petromar Resources S.A. (20% equity). The Block EX-28 partnership comprises Petroceltic Romania B.V. (40% equity and operator), Beach Petroleum S.R.L. which is a wholly owned subsidiary of Beach Energy Ltd (30% equity) and Petromar Resources S.A. (30% equity).

The Romanian authorities have been requested to approve equity transfers between the joint venture partners which will result in Petroceltic Romania B.V. acquiring an additional 15% equity interest in Block EX-28 from Petromar Resources S.A and an additional 10% in Block 27 (from Petromar Resources S.A) which will be transferred to Beach Petroleum (CEE) Srl.