Exploration group Petroceltic yesterday said that it plans to spend the next 12 to 18 months proving the commerciality of its Algerian site. The Dublin-based company also said that it is in talks with several large companies concerning joint ventures.

Releasing the financial results for 2006, chief executive John Craven said this was a very exciting time for the company, whose main geographic focus is Algeria, Italy and Tunisia.

During the year, Petroceltic, which is listed on Dublin's IEX and London's AIM, drilled two successful gas wells in Algeria, applied for nine new offshore Italian permits and made progress on exploration work in Tunisia.

Mr Craven said he believed Algeria was a good country in which to be involved in the gas business as prices were determined on long-term contracts and, as a result, created good financial visibility for the company.

For the full year, Petroceltic recorded a net loss of €6.6 million, up from €2.4 million in 2005.

The main reason for the widening loss was a €5.7 million write-off relating to a dry well in Donegal. While Ireland played a significant part in the full-year loss, it was also one of the main reasons behind the 26 per cent increase in revenue. This rose to €1.3 million, thanks to royalty income from the Kinsale Head gas field and higher gas prices.

The shares were up 8.4 per cent, at 22 cent, in Dublin. In London, the stock fell 3.7 per cent to 13 pence.