Petroceltic mulls $175m bond issue as losses swell

Oil and gas explorer Petroceltic today said it was considering raising up to $175 million (£111m) through a bond issue as it reported a sharp increase in annual losses.

The Irish group, which bought Edinburgh-based Melrose Resources in 2012, said the bond proceeds would be used to refinance up to $50m of its outstanding bank debt and help to finance capital spending, although more funding will be needed for the ongoing development of the Ain Tsila gas field in Algeria.

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Plans for the bond issue were revealed alongside the firm’s annual results, which showed wider losses on the back of unsuccessful wells, and chairman Robert Adair said the firm was stepping back from some exploration initiatives to focus on its core portfolio of development and production assets.

Petroceltic, which focuses on the Middle East and North Africa, Mediterranean and Black Sea regions, posted a loss of $282m for 2014, against $19m a year earlier, following an exploration write-off of $183m due to unsuccessful wells in Kurdistan, Romania and Egypt and an $86m write-down on the value of its oil and gas assets.

Adair said: “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.”