Petroleum Africa
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Tuesday, August 6, 2013
Petroceltic International will receive another contingent payment from Enel Trade SpA (Enel) in relation to the 2011 farm out of an 18.375% interest in its Ain Tsila project in Algeria. Under the 2011 farm-out agreement, a contingent payment could be earned by Petroceltic based on the specific terms of the Declaration of Commerciality in respect of the Ain Tsila project.
The key factors influencing the calculation included field reserves, production rates, and the proportion of overall reserves produced on an annual basis. Following approval of the Declaration of Commerciality in late-2012, Petroceltic invoiced Enel for $26.9 million based on its interpretation of the relevant terms of the agreement. Enel requested clarification of the basis of calculation of this amount and, with the consent of both parties the matter was referred to a Queen’s Council for mutually binding determination.
This process has now concluded and the contingent payment has been confirmed as $26.9 million. The payment is due to be made to Petroceltic on or before August 14.
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