Trio Petroleum, an oil and gas exploration and development company focused on strategic, high growth energy projects in California, has announced the signing of an Acquisition Agreement dated May 11, 2023 to potentially acquire up to 100% of the working interest in the Union Avenue Field located in Bakersfield, California.
The Agreement is between Trio Petroleum Corp. and Trio Petroleum LLC, on behalf of itself as Operator and holding a 20% working interest in Union Avenue as well as to facilitate the remaining 80% working interest holders. As Trio Petroleum LLC is partly owned and controlled by members of Trio’s management, this would be a related party transaction, and a special committee of Trio’s board of directors (the 'Trio Special Committee') has been formed to evaluate and negotiate the terms of this acquisition.
Trio has engaged KLS Petroleum Consulting, an independent engineering firm, to conduct a comprehensive analysis and valuation of the asset, which analysis has been delivered to the Company and is being evaluated by the Trio Special Committee.
Union Avenue is a mature field that has produced an approximate cumulative 2.3 million barrels of oil and 1.2 billion cubic feet of gas, with significant remaining long-term, oil-production potential, including from a recent, partly-developed, new-pool discovery. Acquisition of Union Avenue could help Trio to become cash flow positive.
If final terms are agreed between Trio and the Sellers, the transaction is expected to close within 60 days. Consideration for the acquisition is expected to be paid by Trio through a combination of cash and Trio’s common stock.
Mr. Frank Ingriselli, Trio’s Chief Executive Officer, commented, 'Trio is in an optimal position to capitalize on the acquisition of this producing oil asset, thereby capturing what we believe to be economically valuable for our shareholders. As we continue to develop our South Salinas Project and expand our portfolio, we are confident that our strategic growth initiatives will drive sustainable success and deliver economic returns. We remain committed to leveraging our expertise, resources, and market insights to maximize synergies and unlock the full potential of our acquisitions, solidifying our position as a leader in the industry.'
South Salinas Project Update
Drilling operations at Trio’s HV-1 well on the South Salinas Project is continuing and the company expects to report preliminary results from the well early next week.
Source: Trio Petroleum
