Trinity Exploration & Production plc yesterday announced in a statement to the London Stock Exchange that it has signed a sale and purchase agreement (SPA) to sell the company's interests in Tabaquite Exploration and Production Company Ltd (the Tabaquite block) to LGO Energy plc for US$2 million.
The US$2 million consideration comprises a US$1 million cash payment on the execution of the SPA and the remaining US$1 million payable on completion of certain commercial conditions and standard regulatory approvals, including final approval from the Petroleum Company of T&T Ltd (Petrotrin) and the Ministry of Energy and Energy Affairs. In a statement of its own yesterday, LGO said the deal is also subject to agreement "on the fiscalisation of oil from the field."
LGO said the Goudron field from where it now produces over 1,000 barrels of oil per day, will provide the cash for the acquisition. "The asset purchase will be funded by cash in bank and from operating cash flow from the enhanced oil production from the Goudron field, which is now delivering significant cashflow for the group," the statement said.
The Tabaquite block covers an area of approximately 11.7 square miles (7,502 acres), with production averaging approximately 25 barrels of oil per day (bopd) year to date. The book value of the Tabaquite asset as at December 31, 2013 was US$534,324, Trinity said in its statement.
Trinity CEO Joel "Monty" Pemberton said: "The successful sale of Tabaquite illustrates the latent value throughout our asset base, and the flexibility this offers Trinity to develop its portfolio through industry-based funding at a time when we are seeing growing interest in the region.
Tabaquite was a non-core asset and its sale allows better focus of the group's resources at a time of considerable activity. We are pleased to have transacted with LGO which is an ideal partner to acquire this acreage being an experienced in-country operator."
LGO CEO Neil Ritson said: "We are delighted to add the Tabaquite Block to our portfolio in Trinidad. The Tabaquite fields represent excellent candidates for reactivation and whilst the fields have become non-core to Trinity, LGO's proven ability to reactivate oil fields and successfully drill infill wells makes this acquisition a natural extension of our asset base in Trinidad. Operations to reactivate wells could commence as early as January 2015 and the drilling on new infill wells later that year."
He added: "We are also close to executing the previously announced acquisition of the Trinity-Inniss Incremental Production Service Contract and expect to announce the completion of the transaction shortly."
This year and last have been busy years for acquisitions. In October last year, the National Gas Company (NGC) paid France's Total US$473 million for 30 per cent in Block 2(c) and 8.5 per cent in Block 3(a), producing fields off the east coast of Trinidad. In April (2014), BHP Billiton farmed in to two of BP's deep water acreage blocks for an undisclosed a fraction of US$369 million.
In July, Trinity Exploration and Production plc said it was paying Centrica US$23 million for 80 per cent in two undeveloped blocks. Also in July, LGO said it was paying Singapore's Rex International Caribbean subsidiary US$5 million for a 100 per cent interest in the producing Trinity-Inniss field in south-eastern Trinidad.
