Ireland’s upstream oil and gas exploration firm Petroceltic has approached banks to raise a $500m loan backed primarily by gas reserves in Egypt.

The deal will refinance a $300m loan provided by the UK’s HSBC in mid-August 2012 to fund its acquisition of the UK’s Melrose Resources, which had production operations in Egypt and Bulgaria. The funding is expected to be used at least partly for its exploration projects in Algeria. The new loan has a tenor of six years and is understood to be being targeted at several regional and international banks.

Petroceltic’s has operations in Algeria, Bulgaria, Egypt, Italy, the Kurdish region of Iraq, and Romania.