By John Lee.
Irish-based Petroceltic International has announced that it and its partner Hess will abandon their Dinarta licence in the Kurdistan Region of Iraq.
The company told the stock market:
"As previously announced on 15 January, drilling operations on the Shireen-1 exploration well in the Dinarta licence (Hess ... (Operator) 64%, Petroceltic 16%, and the Kurdistan Regional Government 20%) encountered significant operational challenges since the resumption of drilling on 2 October 2014.
"The well reached a maximum depth of 1430m in Jurassic formations on 26 December 2014 before being suspended while forward options were reviewed by the Operator. This review concluded that an additional well would be required to further evaluate the exploration potential of the Shireen prospect, and that further operational difficulties could not be ruled out.
"In light of the current low oil price environment, lack of conclusive well results to date and the limited time remaining in the current period of the Production Sharing Contract (PSC) for the Dinarta licence, Hess and Petroceltic have jointly elected to withdraw from the Dinarta licence without any further drilling. All PSC work program obligations have been fulfilled other than the required final remediation of the well sites."
Brian O'Cathain (pictured), Chief Executive of Petroceltic commented:
"Petroceltic's strategy remains clearly focussed on delivering from its core producing and development assets, whilst maintaining balanced exposure to longer term exploration led growth wherever possible.
"In light of this, and the current oil price environment, the decision to withdraw from Kurdistan is the right one for the business."
Shares in Petroceltic were down 4 percent on Wednesday morning.
(Sources: Petroceltic, Yahoo!)