16 April 2018
COLUMBUS ENERGY RESOURCES PLC
("Columbus" or the "Company")
Potential acquisition of a 50% interest in the Icacos field - Trinidad
Columbus, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, provides the following update about the potential acquisition of a 50% interest in the Icacos field, in the South West Peninsula of Trinidad ("SWP").
The Company currently holds a 50% non-operated interest in the Icacos Field, via its subsidiary Leni Trinidad Limited ("LTL"). The other joint venture partner is Touchstone Exploration Inc ("Touchstone"), via its subsidiary Primera Oil and Gas Limited ("Primera") who holds a 50% interest and is operator.
The Company and Touchstone have agreed, in principle, for LTL to acquire Primera's 50% interest in the Icacos field. Upon completion of the transaction, LTL will be the 100% owner of the Icacos field and Operator.
Whilst the transaction is still subject to a definitive sale and purchase agreement and certain regulatory approvals, the Company is confident it can work with Touchstone to complete the relevant paperwork and take over operatorship in Q2 2018.
The consideration for the transaction is USD$500,000 (the "Minimum Payment") for Primera's current net 11 bopd. However, LTL will not pay any upfront consideration for the purchase but will pay the consideration over time until 1 January 2021 through Primera receiving the net revenue it would have received had it retained its interest. Primera will also receive, in the event of increased production, 25% of any net revenue above the current baseline. Should these cumulative payments not exceed the Minimum Payment, LTL will pay the difference between the amount received and the Minimum Payment. LTL shall be entitled to 100% of all revenue from Icacos from 1 January 2021.
Leo Koot, Executive Chairman of Columbus, commented:
"Today's news is another step in our strategy to build a core exploration, appraisal, development and potentially significant production hub in the South West Peninsula of Trinidad. Following on from the BOLT transaction, Columbus will shortly have obtained 100% operational control over a large area (approximately 8,700 acres) in the South West Peninsula. The SWP includes multiple prospects of 20-400 million barrels in place, which we intend on exploring, in addition to reactivating and maximising production from the Bonasse oilfield and the Icacos oilfield. In line with our ongoing focus on capital discipline, we are not expecting to pay any upfront payments for the Icacos purchase. The consideration will be deferred and mirror the actual production levels from the Icacos field. All operational activities on Icacos will be funded from existing cash resources.
We look forward to working with Touchstone, the Icacos leaseholders and the Ministry of Energy and Energy Industries to quickly sign and close this transaction so we can fully explore and develop the SWP."
The Icacos field is located in the extreme southwest of Trinidad and is operated by Primera. The field was producing at around 34 bopd in 2011 and has steadily declined to around 22 bopd in 2017, mainly through natural decline. Production throughout 2017 was consistently around this volume and there have been limited new work programme activities during this period to increase production. The Icacos field currently consists of six wells, with three on production. Columbus plans to undertake analysis of the potential for a well reactivation programme and undertake well stimulation and other well activities to increase production. The Company will also look at additional infill wells in due course.
This announcement is inside information for the purposes of Article 7 of Regulation 596/2014.
Qualified Person's statement:
The information contained in this document has been reviewed and approved by Stewart Ahmed, Managing Director (Trinidad) for Columbus Energy Resources plc. Mr Ahmed has a BSc in Mining and Petroleum Engineering and is a member of the Society of Petroleum Engineers. Mr Ahmed has over 32 years of relevant experience in the oil industry.
Columbus Energy Resources plc
Leo Koot / Gordon Stein
+44 (0)20 3794 9230
VSA Capital Limited
Financial Adviser and Broker
Andrew Monk / Andrew Raca / Justin McKeegan
+44 (0)20 3005 5000
Beaumont Cornish Limited
Roland Cornish / Rosalind Hill Abrahams
+44 (0)20 7628 3396
Public and Investor Relations
Georgia Edmonds / James Crothers
+44 (0)20 3757 4983
Notes to Editors:
Columbus Energy Resources Plc is an oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America. Initially focussed on maximising production from its core Goudron field asset, Columbus is cashflow positive and aims to create transformational growth by developing its exploration targets across its portfolio in the South West Peninsula ("SWP"), which lies in the extreme southwest of Trinidad and consists of stacked shallow and deep prospects, in a capital efficient and disciplined manner.
Columbus is guided by the following core values; safe and sustainable, stronger together, creative excellence, positive energy, totally trusted and personally responsible.
The Company is led by an experienced Board and senior management team with supportive shareholders and intends on leveraging its expertise and experience to build an attractive and diversified portfolio of assets across South America in order to build an oil production led South American exploration business.
This information is provided by RNS