Petroceltic International confirms that it has received formal notification that Sonatrach, the Algerian State Oil Company, is exercising its right under the Isarene Production Sharing Contract (PSC) to pre-empt the Company's proposed sale of an 18.375% interest in the PSC.

The commercial terms and proceeds of pre-emption are similar to those agreed between the Company and a potential third party purchaser and comprise a $20 million payment on completion, a $140 million development carry and two contingent payments of $10 million each based on the achievement of certain early production and technical completion milestones. Following the completion of the transaction, Sonatrach will hold a 43.375% participating interest, Petroceltic will hold 38.25% and Enel will hold the remaining 18.375%. The transaction is not expected to have any impact on the overall timing for award of major contracts or initiation of detailed development activities.

Tags: Petroceltic International plc