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Trinidad: Columbus Energy announces potential acquisition of a 50 percent interest in the Icacos field, Trinidad
16 Apr 2018
Columbus Energy, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, has provided 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, via its subsidiary Primera Oil and Gas, which 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.'
Source: Columbus Energy