PETROCELTIC is an Irish exploration minnow that has promised much but delivered little to investors since it grew out of the former Ennex International resources group in 2003. The company has talked confidently about its licences in Italy, Tunisia and Algeria, but has yet to show anything tangible.
On Thursday, it provided investors with a drilling update on its oil and gas activities in Algeria. The tone was positive and hinted at having the government there declare it a commercial discovery, which is crucial if the company is to extract any resources. There has also been speculation recently of a joint venture with a middle-ranking European oil company.
Tommy O’Gorman, a veteran resources investor based in Northern Ireland, decided to take his leave of the company last week. The Newryman has been gradually selling down his holding over the past eight months and dumped the final 250,000 shares at just under 17p a pop. At one point, O’Gorman owned 20m shares, the vast bulk of which he picked up for 1p apiece. He is thought to have made a cool €4.5m.
His latest focus is Pan Andean Resources, a company producing more than 300 barrels of oil a day and with a market value of just €15m. By contrast, Petroceltic produces practically nothing — although it has about £15m (€22m) cash on the balance sheet — and is valued at £112m.
O’Gorman has a habit of exiting stocks at just the right time. His latest move could be a signal to the other investors.
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