drilling plans ppgost strategic alliance with

Drilling Plans post strategic p galliance with

Oilbarrel Conference

27th November 2008

OILBARREL November 2008www.petroceltic.com

Forward looking statements

This presentation may contain forward-looking statements and information that both t t’ t t ti b li f i f t t drepresents management’s current expectations or beliefs concerning future events and

are subject to known and unknown risks and uncertainties.

A number of factors could cause actual results, performance or events to differ materially f th d i li d b th f d l ki t t tfrom those expressed or implied by these forward-looking statements.

OILBARREL November 2008 Slide 1Slide 1

Company background and strategy

Background• Founded in 2002 and quoted on AIM and ISEq• 25 full time employees supported by a network of over fifty

experienced consultants • Operated assets in Algeria, Italy and Tunisia• Headquartered in Dublin, Ireland with offices in Rome, Italy and

Algiers, Algeria

Strategy• Maghreb/Southern Europe focus• Low cost drilling close to infrastructure• High initial equity with operator status preferred• Early stage work programmes funded internally or by farming out

OILBARREL November 2008 Slide 2

Strong management team

Andrew BostockSenior Independent DirectorMr Bostock is a Petroleum Engineer with 23 years experience in upstream oil and gas. He began his career with ShellInternational, and progressed through increasingly senior technical and commercial roles in a number of independent oil andgas companies including Enterprise Oil Talisman Energy and Venture Production He was appointed to the Board of Dana

Brian O’CathainExecutive ChairmanMr O’Cathain is a geologist and petroleum engineer with 24 years’ experience in senior technical and commercial roles in

pstream oil and gas e ploration and prod ction companies incl ding Shell International Enterprise Oil and T llo Oil plc

gas companies, including Enterprise Oil, Talisman Energy and Venture Production. He was appointed to the Board of Danain 2001. He is currently Chairman of Purepower Group Limited, a privately owned renewable energy company.

upstream oil and gas exploration and production companies, including Shell International, Enterprise Oil and Tullow Oil plc. He has experience in working in West Africa, North Africa, onshore Europe, the North Sea, the gulf of Mexico, South Asia and offshore Ireland. He was formerly Chief Executive of AIM-listed Afren plc.

John CravenChief ExecutiveMr Cra en has o er 30 ears’ e perience in pstream oil and gas ith e ec ti e and senior management positions inMr Craven has over 30 years’ experience in upstream oil and gas with executive and senior management positions inMajors and Independents, including Gulf Oil, Dana Petroleum and Vanco Energy. His experience includes the North Sea,offshore Ireland, onshore Europe as well as North and West Africa. John is a co-founder of Petroceltic International Plc.

Alan McGettiganFinance DirectorFinance DirectorMr McGettigan has over twenty years of experience in upstream oil and gas. Prior to joining Petroceltic, he worked for BGInternational where he held senior roles in Commercial and Group Business Development. His other experience includesroles at Shell International and BP as well as four years as a management consultant at McKinsey & Company.


Petroceltic : African Assets


Petroleum geology: Isarene in the Illizi-Berkine section

ILLIZI BASIN BERKINE BASIN

Devonian hot shales

Hercynianunconformity

thickening of Paleozoic depocentre southwards

Silurian hot shales

unconformityfirst HC matures

during Carboniferous

re-migrates during Hercynian & subsequent movements

Ò

OILBARREL November 2008

Òrdovician permeability main control on commerciality

Petroceltic Algeria - Isarene license mapTotal’s TFT 8 TCF gas, 840 MMBBLS li id blliquids recoverableCirca 80 km from HTT/ISAS

Sonatrach’s Alrar

Repsol’s Tifernine oiloil15 km GTT-1

5 TCF gas, 235 MMBBLS recoverable

Ai T il RidAi T il RidHTT & ISASDiscovery

Medex Planning Gas Hub

Ain Tsila Ridge Ain Tsila Ridge ProspectProspect22--6 TCF 6 TCF potentialpotential

Discovery Areas

BP’ I A Cl t

OILBARREL November 2008August 2008 Slide 6

BP’s In Amenas Cluster of Fields4.2 TCF gas & 264 MMBBLS liquids recoverable

Isarene Drilling History

4

DryShows

Appraisal wells in italics

3

s

ShowsOilGas

French exploration

2

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f wel

ls

1 N-1

2

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Sonatrach exploration Repsol appraisal PetrocelticAppraisal

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TXA

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NC

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bis

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-1N

CL-

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ISA

S-

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1958

1960

1962

1964

1966

1968

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

CLR

-1IN

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-1

TMZ -

HTT

N-1

TSI-1

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TT-2

GTT

-1

IR-1

HTT

-1

HTT

-


Year

Isarene topography on NE part of Ain Tsila Ridge


Palaeo Glaciogenic Valley – Late Ordovician (430 Million years ago - Illizi Basin, Algeria)

West East

Glaciogenic Incised Valleyin Ordovician section


Isarene 3D Seismic, Algeria

Glaciogenic Valley – Present Day, Switzerland

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OILBARREL November 2008Aletsch Glacier, Switzerland

THICKNESS MAP OF ORDOVICIAN GLACIAL VALLEYTHICKNESS MAP OF ORDOVICIAN GLACIAL VALLEY

Incised Valley

Incised Valley


Isarene permit – 2009 drilling programme

3 D i Sh ll W ll

Planned wells

3 Devonian Shallow Wells

4 Ordovician Deep Wells

OILBARREL November 2008 Slide 12 Algiers – May 2008

Isarene permit – Shallow (1000m) drilling programme

Planned wells

W ll GTT 1 il iWell on GTT-1 oil rim, as appraisal of possible early oil development

Two appraisal wells to follow up earlier pDevonian/Carboniferous gas discoveries


Isarene permit- Deep (2500m) drilling programme

Planned wells

Th i l llThree appraisal wells on Ain Tsila ridge 2 -3 TCF Ordovician gas prospect

Exploration well on SW Isarene area OrdovicianIsarene area Ordovician oil prospect


Algeria strategy and objectives to April 2010

• 7- 9 wells planned in 2009 to:

S i ti di i f f t d ti– Secure existing discoveries for future production– Prove large gas resources (>2TCF) on Ain Tsilla Ridge 3D

area– Obtain early oil production at GTT– Secure existing gas discoveries for exploitation via

adjacent planned infrastructure– Drill remaining exploration prospects – Capture 2P reserves

– Drilling Rig Contract signed for KCA Deutag Nomad Class Rig T-212

– Drilling starts end Q1 2009


Drilling starts end Q1 2009

Unrisked potential contingent reserves*

Target Wells Timing Gas Oil/Cond. TotalExpected BCF MMbbls MmboeExpected BCF MMbbls Mmboe

Devonian/ Carboniferous 4 Q1 2009 487 34 121

Ordovician 3 Q2/Q3 2009 2688 341 821Totals 7 3175 375 942

*Current Petroceltic P50 estimates, pre new 3D interpretation.

Conservative recovery factors of 25% for oil, and 70% for gas assumed


Petroceltic Tunisia – Ksar Hadada license

Petroceltic 57%Independent 40%Derwent & GA I A

Oryx Structure

Derwent & GA.I.A.

New seismic interpretationComplete – additionalProspects identified

Area 5600 km2

Verenex Accacus successIn western Libya >5000 bopd

Storm Ventures success In TT-2, tested 300 bopd from the Ordovician


Petroceltic Italy Assets

7 Permits (3 operated)

11 Offshore Exclusive Applications

1 Onshore Application

Three drill ready prospects (2009/2010)(2009/2010)

High Equity Interests

O & GOil & Gas

OILBARREL November 2008 Asset Review20th October 2008Slide 18

Italy: Adriatic licenses & prospects

Elsa Discovery: Potential C ti t R 80 MMbbl Sangiovese Prospect:Contingent Resources 80 MMbbls Sangiovese Prospect:

Potential Contingent Resources 180 MMbbls


Central Adriatic Assets : Play Fairways

Pliocene Turbidites

Jurassic Carbonates

Cretaceous SlopeCretaceous Slope /Basin Floor Fan

Oligo-MioceneOligo-Miocene Carbonates

Cretaceous Carbonates


Cretaceous Carbonates

Elsa-1, Elsa West & Miglianico Area

High-side case assumes continuous pool and similar OWC to Miglianico (>-4780m).. API = 15 – 34 ˚

Elsa -1 – (1992) Logged 75m oil zone, good porosity. 15 API Oil on poor

Elsa WestDHI:

Flat Spot

p y pquality DST. P&A.Top reservoir –4475 msslTD 4841m

Elsa

Miglianico 1 (2001) tested 2500 bopd (34 api) TD 4966m


Miglianico 2 (2003) tested 1750 bopd (37 api) TD 4925m

Italy: Po Valley licenses & prospects

Villafortuna-Trecate Fields265 MMbbls + 250 BCF

La Pavona Triassic Oil Prospect: Potential Contingent Resources

200 MMbbls

Gaggiano Field100 MMbblsZeme Lomellina Triassic Gas

Prospect: Potential ContingentProspect: Potential Contingent Resources 600 BCF


Italy: Sicily Channel license & prospect

Operator ENI plans integrated sub-Sea Development Concept with tie-backs to available facilities at depleted Prezioso/Perla Oil Fields

Panda-1 discovery (2002)Panda 1 discovery (2002), 200-500 BCF, Tested 20 mmscf/d

Licata Prospect: Potential Contingent Resources 245 BCF

Argo-1 tested 4.75 mmscf/d in 2006, Argo-2 spudded 2008

Cassiopea 1 (2008) WD 560m


Cassiopea-1 (2008) WD 560m565 BCF discoveryTested 6.7 mmscf/d

Strategy and objectives for Italy 2009 - 2011

• Drill 3 to 5 Wells:

• Drill Elsa Appraisal well in 2010• Drill Elsa Appraisal well in 2010P2 potential resources 80mmbbls

• Drill Carisio Gas prospect (defined on existing 3 D) in 2009/10P2 potential resources 170 bcfP2 potential resources 170 bcf

• Seismic and drilling on Carisio La Pavona Triassic oil play (Villafortuna trend) P2 potential resources 180 mmbblsp

• Seismic and drilling on Torrente Nore

• Drilling on Civitaquanag q

• New Seismic on Adriatic 100% acreage, fund drilling via farm-out


Iberdrola transaction overview

• Strategic alliance with Spanish Energy Group Iberdrola will facilitate development of Petroceltic’s attractive portfolio and underpins the inherent value of our oil and gas asset baseg

– Iberdrola to invest $55m in Petroceltic through placing of 216m shares at £0.13 / share

– Iberdrola also pays $7m for option to invest a further $55m to acquire 49% financing interest in any single asset in Petroceltic’s portfolio

• Subscription price underlines significant upside potential in Petroceltic’s share price

Pet oceltic gains access to gas ma keting e pe tise• Petroceltic gains access to gas marketing expertise

• Represents Iberdrola’s first upstream investment

• Potential for further upstream co-operation in a focused area of North Africa / MediterraneanAfrica / Mediterranean

Strategic alliance will greatly expedite shareholder realisation of the intrinsic value in Petroceltic’s attractive exploration and appraisal portfolio


value in Petroceltic’s attractive exploration and appraisal portfolio

About

• Headquartered in Spain, Iberdrola is the 4th largest electricity company in the world with a market capitalisation of €43 billion and net sales of €17.5bn in 2007

• Operations in over 40 countries worldwide, mainly in the Atlantic Basin area

I 2007 d 5 5 billi bi t f l i bi d l l t d i d t i l • In 2007 managed 5.5 billion cubic meters of gas, supplying combined cycle plants and industrial, business and residential users in mainland Spain

• Strong presence in renewable energy sector through its subsidiary, Iberdrola Renewables, and is the global market leader in wind energy

Floated 20% of Iberdrola Renewables on Spanish Stock Stock Exchange in 2007– Floated 20% of Iberdrola Renewables on Spanish Stock Stock Exchange in 2007

• Acquired Scottish Power for €17.1bn in 2007, overall 2007 Acquisitions €27 bn

Global Positions Market Capitalisation (as at 26/6/08)

80

100

120€bn

North America #2 wind-power company.#3 in gas storage

Latin America #1 private generation company in Mexico

20

40

60#1 supplier in NE Brazil

United Kingdom #3 electricity supplierOne of the 5 leading retail companies#1 wind-power company


0EDF E ON Suez Iberdrola RWE

Spain The leading energy company

Key transaction details

Initial $55 million Investment Financing Option Agreement toInvest Additional $55 million+

• $55m investment undertaken in two tranches:

– Tranche 1: Iberdrola subscribed for 20% Petroceltic’s

• Iberdrola will pay $7.3 mm for an option to acquire 49% financing interest in any single Petroceltic asset for a consideration of $55 million subject to government and current share capital (147m

shares) at £0.13/share for a total of $38m

– Tranche 2: Iberdrola b ib d f dditi l 68

million, subject to government and partner consents

• Asset must be selected by Iberdrola within 6 months of agreement date

O ti ill i if t i d subscribed for an additional 68m shares at the same price of £0.13/share for a total of $17m

• Option will expire if not exercised on or before 1st May, 2010

• Future operational funding will be split 49:51 (Iberdrola : Petroceltic)


Key transaction details (cont’d)

Business Co-operation Shareholders Agreement

• Joint business committee formed to: • Iberdrola agrees not to sell shares • Joint business committee formed to:

– Manage strategic alliance

– Consider further co-operation opportunity

• Iberdrola agrees not to sell shares in Petroceltic without Petroceltic consent for 3 years

• For a period of 3 years, Iberdrola shareholding will not exceed 24.9%

• Iberdrola nominated non-executive director to join Petroceltic Board with immediate effect

• Business focus area continues to be

shareholding will not exceed 24.9% of Petroceltic issued share capital without Petroceltic’s permission

• Iberdrola entitled to subscribe in cash for new equity to maintain

North Africa & Mediterranean

• Iberdrola to second personnel to Petroceltic

– Assist Iberdrola in developing of

q ypercentage shareholding in Petroceltic

• Key rights and obligations under shareholder agreement will lapse if – Assist Iberdrola in developing of

upstream expertise

– Provide marketing assistance on future gas sales

g pIberdrola holds <10% issued share capital of Petroceltic for greater than 90 days

• Non-blocking provisions


Iberdrola: 20% stake in Medgaz Project


Cash: Sources & Uses

Sources US $ Uses US $Million Million

Cash 1st January 2008 23.1 Cash post Deal 71.7

Algeria 3D Seismic 9 9 Algeria Seismic 6 0Algeria 3D Seismic -9.9 Algeria Seismic 6.0 Other -3.8 Algeria Drilling 50.0

Placing 1st Tranche 37.6 Other 15.7 Placing 2nd Tranche 17.4Option Fee 7.3Total Cash Raised 62.3

Cash p/share (£) 14.73


Current Corporate Position

• Post Iberdrola $55m equity funding @13p/share

– Shares in issue 953 million– Shares in issue 953 million– Current share price (25/11/08) 3.0p– Market Cap $44 mm– Cash/receivables $62 mm– Cash/share 3.7p– Enterprise Value/share Nil

• Iberdrola Option to earn 49% in 1 of Petroceltic’s • Iberdrola Option to earn 49% in 1 of Petroceltic s Permits/PSCs for $55mm

– Values most attractive Permit/PSC at $112 million or 7.2p/shPetroceltic has 18 other permits/PSCs in portfolio– Petroceltic has 18 other permits/PSCs in portfolio

– Severe market disconnect to underlying asset and cash valuations


Three Month Average Shares Traded as a Percentage of Shares in Issueg

Winstar

CandaxOilexcoStratic

SterlingGulf Keystone

Aminex

AddaxTullow

Petroceltic

Sterling

0 0.2 0.4 0.6 0.8 1

Afren

Addax


Petroceltic Summary

• Foundations for Growth in Place

– Algeria 3D Seismic complete & company qualified for new opportunities

– Italy Adriatic/Po Valley permits secured with drill ready Italy Adriatic/Po Valley permits secured with drill ready prospects

– Finance in place for drilling in 2009/10– Robust Strategic Partner – Iberdrola– AMI in North Africa & Italy for new opportunities

• Newsflow

– Rig contracted for 2009 drilling, starting Q1 2009 – 7 - 9 wells planned for Algeria 2009/10

3 5 wells planned for Italy 2010/11


– 3 - 5 wells planned for Italy 2010/11

drilling plans ppgost strategic alliance with

Documents