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Petrel Resources “Renewing Connections” in Iraq

By John Lee.

Petrel Resources has announced the appointment of Riadh Hameed as Non-Executive Director with immediate effect.

Riadh Mahmoud Hameed (aged 38) is a quality control engineer working for an aerospace component company based in the USA.   Prior experience has included over a decade of working in the oil and gas sector, to include six years working for Petrel as a co-ordinator for its projects in Iraq.

David Horgan, Managing Director writes:

“I am delighted to welcome Riadh to the Board of Petrel Resources, and look forward to working with him again, and to renew our connections on the ground in Iraq.”

Last year, having taken an EUR 4.1-million impairment on its investments in Iraq, the company announced that it was re-establishing operations in Baghdad.

(Source: Petrel Resources)

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Petrel Resources “Re-Establishing its Baghdad Operations”

Irish-based Petrel Resources has said it is “re-establishing its Baghdad operations”.

In its interim statement for the six months ended 30 June 2018, the company said:

“As we approach the end of 2018, Iraq is fitfully emerging from conflict, and again open for responsible business.  Baghdad has re-established its authority, by defeating Da’ech insurgents and recovering Kirkuk. 

“Pro-business parties won the 2018 elections.  While it proved difficult to form a National Government in 2018, which contributed to turbulent protests in southern Iraq during 2018, prospects are now more encouraging than at any time since 2010.

“Iraq has endured an almost continuous period of conflicts and/or sanctions since 1980, from which it is only now emerging.  Much trauma has been inflicted, as shown by the difficulties forming a government in 2018 and the protests in southern Iraq – a region generally supportive of Baghdad governments since 2005.

“Yet, despite 2018 difficulties, we believe Iraq is finally turning a corner: pro-business parties open to international investment polled well in the May 2018 general election.  But no one party holds a majority and, as of September 2018, negotiations on new government formation were ongoing.

“So far, the impact of this unrest on oil production from the southern fields has been limited, with August 2018 output stable at 4.65 million barrels daily (mmbod).  Internal demand of 0.8 mmbod leaves nearly 3.8 mmbod available for export – which has remained consistent despite infrastructural and decision-making challenges – though well below the 2008 target of 6.5 mmbod and the 2012 target of 8.5 mmbod.  Iraqi output is actually higher than immediately before the November 2016 OPEC + Russia cuts, and also higher than its current official OPEC quota of 4.444 mmbod.

“The Western Desert, where Petrel has an interest in exploration ground, is still impossible for international companies to effectively operate.”

(Source: Petrel Resources)

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Petrel Resources takes €4.1m Impairment on Iraq

By John Lee.

Irish-based Petrel Resources has taken a €4.1 million impairment of its investment in Iraq:

“In August 2013, Petrel did a deal with Amira in Iraq whereby, for US$500,000 in cash plus 18,947,368 initial consideration shares (which were to be locked-in until spudding of the first oil well by our partners), Petrel acquired a 5% full free carry in Amira’s activities in the Wasit province in Iraq which was then, and still is, a relatively stable Shia dominated province. 

“The expectation was that provinces in Iraq would offer licences in their own right rather than solely through the central government in Baghdad.  This did not happen.  In fact, nothing happened.  As mentioned above, we have therefore impaired our investment.“

However, the company said it remains interested in oil opportunities in Iraq:

“Iraq remains one of the very best oil provinces in the world.  The oil exploration potential is outstanding.  The improving political situation in Iraq has resulted in Petrel re-awakening an interest.  We have been there since 1999 and like the country. 

“We are discussing with Amira, our partner, how best to declare an interest in certain fields.  We are also re-establishing contacts in the administration.  It is very early days, but it does look as if Iraq is slowly re-opening for business, and we want to be there.“

(Source: Petrel Resources)

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Petrel Resources Shares Slump following Iraq Settlement

By John Lee.

Shares in Irish-based Petrel Resources were trading 20 percent down on Friday after the company said it had reached a settlement in respect of the disposal of 2.2 million Petrel shares by Amira Petroleum‘s advisers notwithstanding a lock-in agreement entered into on 19 August 2013.

According to the company:

 On 14 August 2013, the Company announced that it had agreed to acquire from Amira Petroleum N.V. (“Amira Petroleum”) a 20 per cent shareholding in Amira Hydrocarbons Wasit B.V. (“Amira”), the holder of a 25 per cent carried interest in certain oil and gas exploration and production licences in the Wasit Province of Iraq.

The consideration for the acquisition included the issue of 18,947,368 shares in Petrel (representing 19.82 per cent of the enlarged issued share capital of Petrel (“the Initial Consideration Shares”). The Initial Consideration Shares were agreed to be locked-in until the date of spudding the first conventional oil well in respect of Amira’s interest in the Wasit province (the “Spudding Date”) but that, if the Spudding Date had not occurred by 19 August 2018, Petrel could, amongst other things, elect to re-acquire the Initial Consideration Shares for a nominal amount.

As part of the agreement with Amira Petroleum, 2.8 million of the Initial Consideration Shares were, at the direction of Amira Petroleum, issued to its advisers in satisfaction of fees payable by Amira Petroleum (“the Adviser Shares”) and were subject to a lock in agreement as detailed above.

As of the date of this announcement, the Spudding Date has not occurred.

During December 2017, Petrel learnt that 2.2 million of the Adviser Shares had been sold between March and July 2017, notwithstanding the lock-in agreement.

The parties have reached a settlement and agreed that the vendors of the 2.2 million Adviser Shares shall make a payment of £100,000 to the Company (representing approximately 4.5p per Adviser Share sold).  The remaining Adviser Shares shall remain subject to the lock-in agreed in 2013.

This announcement contains inside information for the purposes of Article 7 of EU Market Abuse Regulation 596/2014.

(Sources: Petrel Resources, Google Finance)