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Background

Petroceltic – through its subsidiary Petroceltic Italia Srl – has had a presence in Italy since 2005. The current portfolio consists of one onshore permit (operated) in the western Po Valley, four offshore permits (three of which are operated) in the central Adriatic and one offshore permit (non-operated) in the Ionian Sea.

Licence

Status

Region

Petroceltic interest

Operator

BR268RG

Exploration

Offshore Adriatic

55%

Cygam

BR270EL

Exploration

Offshore Adriatic

100%

Petroceltic

BR270EL

Exploration

Offshore Adriatic

100%

Petroceltic

BR270EL

Exploration

Offshore Adriatic

100%

Petroceltic

D84FR-EL

Application

Offshore Ionian Sea

40%

Petroceltic

Carisio

Exploration

Onshore Po Valley

47.5%

Eni

All permits are at the exploration stage with the exception of Adriatic licence BR268RG, which has 52 MMboe of 2C contingent resources net to Petroceltic associated with the Elsa discovery made in 1992.  Aggregate P50 prospective resources across all the permits amount to 371 MMboe.

A drilling moratorium has been in place offshore Italy since 2010, following the BP’s Macondo accident in the US Gulf of Mexico.  Consequently, Petroceltic is unable to progress plans to appraise the existing Elsa discovery in the BR268RG licence.  In addition, activities on all other licences other than D84FR are currently suspended as a result of the extended time required to obtain environmental approvals.

Given the inability to make progress the exploration and appraisal activities in Italy, the Company is re-evaluating its future strategy with regard to its Italian business.

The Italian Government is developing a number of actions to reach this target; it has recently developed a new legislation in line with European standards (the so called Restart Italy) and is developing new regulation for the safety of offshore operations in line with the relevant EU Directive. Petroceltic welcomes this approach and believes that it will enable development and growth of our Italian portfolio.