Hess, Petroceltic to pull out of Iraqi Kurdistan licence

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March 25 (Reuters) - Oil and gas producers Hess Corp and Ireland (Other OTC: IRLD - news) 's Petroceltic International Plc (LSE: PCI.L - news) agreed to pull out of the Dinarta licence in Iraqi Kurdistan due to the fall in oil prices and disappointing well results, Petroceltic said.

Petroceltic's London-listed shares fell as much as 5.5 percent in morning trade.

"This should not come as a huge surprise to the market although the size of the impairment may be higher than some would have estimated," Westhouse Securities said in a note.

The brokerage said it expected Petroceltic to write off about $125 million related to the pullout in its 2014 financial statements.

Westhouse also expected Petroceltic to incur $7 million more in costs in 2015 relating to remedial and demobilisation work.

Petroceltic, which owns 16 percent of the venture, said it had agreed with Hess Middle East New Ventures, a unit of Hess Corp, to withdraw from Kurdistan, also citing the limited time remaining in the current period of the production-sharing contract.

Hess was not immediately available for comment.

Operator Hess owns 64 percent of the Dinarta licence, which borders Akri Bijeel, while the Kurdistan Regional Government (KRG) holds 20 percent.

Explorers and producers in Iraqi Kurdistan have been struggling with poor drilling results and unstable payments from the KRG for oil exports.

Afren Plc (LSE: AFR.L - news) said in January that it would evaluate options for the Barda Rash oilfield, saying the asset held no proven or probable reserves, while Gulf Keystone Petroleum is looking to offload its minority stake in Akri Bijeel.

Petroceltic shares were down 2.4 percent at 124 pence at 1012 GMT on the London Stock Exchange (Other OTC: LDNXF - news) . (Reporting By Abhiram Nandakumar and Mamidipudi Soumithri in Bengaluru; Editing by Gopakumar Warrier)