Petroceltic International PLC : Egyptian Operational Update

Dublin

6th February 2013                

Petroceltic International plc

Egyptian Operational Update

Highlights

·     Frontier Exploration well, Mesaha-1, plugged and abandoned having failed to encounter hydrocarbon indicators

·     South Damas-2 development well expected to commence production in late February, having penetrated 96 feet of high quality gas-bearing sands

·     East Dikirnis-1 development well brought into production post successful tie back to West Dikirnis facilities

·     Egyptian LPG plant expansion and compression project on schedule for completion by mid year

Petroceltic International plc ("Petroceltic" or "the Company"), the upstream oil and gas exploration and production company focused on North Africa, the Mediterranean and Black Sea regions, today provides an update on its Egyptian exploration and development activities.

Drilling operations on the Mesaha-1 frontier exploration well in southern Egypt have been completed by the EDC-9 rig and the well reached a total depth of 6,985 feet. The well failed to encounter any hydrocarbon indicators and is being plugged and abandoned. The well has provided significant new data on the Mesaha basin stratigraphy which will be incorporated in a review of the regional geology prior to optimising any future work plans for the block. The well was drilled for a gross cost of US$10.3 million and Petroceltic holds a 40 percent working interest in the concession.  

In the Nile Delta, the South Damas-2 development well has been successfully drilled to 4,700 feet and completed using the Tanmia-1 rig and is expected to commence production in late February. The well encountered the top reservoir interval approximately 33 feet higher than the existing South Damas-1 producer and penetrated 96 feet of high quality gas-bearing sands in the Messinian formation. The well is expected to increase the total South Damas field production rate to over 20 MMcfpd (from the current 12 MMcfpd) and to accelerate the efficient recovery of the field's proved plus probable reserves of 50 Bcf.

The East Dikirnis-1 development well has been successfully tied back to the nearby West Dikirnis facilities using a 14 kilometre, 6 inch diameter flow line and was brought on production on the 26th January. In common with producers in the West Dikirnis field, the new well has initially been completed in the reservoir oil rim to maximise hydrocarbon liquids recovery prior to switching to produce the gas cap reserves later in the field life. The well is currently being produced at a restricted rate of 150 bpd of oil in order to gather reservoir performance data prior to optimising the oil production rate.

The Company's development projects are progressing within budget and the commissioning activities on the West Dikirnis LPG plant expansion are well advanced. Phase I of the project, comprising the turbo expander, is expected on stream in February and Phase II, including the chiller units, in April. The West Khilala compression project remains on schedule to complete in mid year. 

Brian O'Cathain, Petroceltic's Chief Executive, commented:

"While we are naturally disappointed not to have encountered any evidence of hydrocarbons in the Mesaha wildcat exploration well, it has provided valuable new information on this frontier exploration area in southern Egypt. We are very happy with the progress we are making in our development projects in Egypt whilst the South Damas - 2 drilling results are particularly pleasing. Meanwhile, we look forward to commencing our high potential exploration drilling programmes in the Black Sea and Kurdistan Region of Iraq later this year."

For further information, please contact:

Brian O'Cathain/Tom Hickey, Petroceltic International           Tel: +353 (1) 421 8300

Philip Dennis/Rollo Crichton-Stuart,

Pelham Bell Pottinger                                                              Tel: +44 (20) 7861 3919

Joe Murray/Joe Heron, Murray Consultants                            Tel: +353 (1) 498 0300

John Frain, Davy                                                                      Tel: +353 (1) 679 6363

Dr. Dermot Corcoran, Head of Exploration, Petroceltic International plc, is the qualified person who has reviewed and approved the technical information contained in this announcement. Dr. Corcoran has a B.Sc in Geology, a M.Sc. in Geophysics, and a Masters degree in Business Administration, all from the National University of Ireland, Galway. He also holds a Ph.D in Geology from Trinity College, Dublin. Dr. Corcoran has over 20 years experience in oil & gas exploration and production, and has previously worked at ExxonMobil, the Petrofina Group, and Statoil.

Glossary

Bpd:                             Barrels per day

Bcf:                              Billion cubic feet

MMcfpd:                       Million cubic feet of gas per day

Notes to Editors:

Petroceltic International plc is a leading Upstream Oil and Gas Exploration and Production Company, focused on North Africa, Mediterranean and Black Sea Regions, and listed on the London Stock Exchange's AIM Market and the Irish Stock Exchange's ESM Market. The Company has production, exploration and development assets in Algeria, Egypt, Bulgaria, Romania, the Kurdistan Region of Iraq and Italy.