Touch­stone Ex­plo­ration Inc has reached an agree­ment to ac­quire Trin­i­ty Ex­plo­ration and Pro­duc­tion Plc, which, if ap­proved, would bring to­geth­er two small in­de­pen­dent en­er­gy com­pa­nies op­er­at­ing in T&T.

In a news re­lease, Touch­stone said it reached an agree­ment with Trin­i­ty Ex­plo­ration on the terms of an all-share ac­qui­si­tion of the crude oil ex­plo­ration, de­vel­op­ment and pro­duc­tion com­pa­ny with on­shore and off­shore as­sets in Trinidad and To­ba­go.

Touch­stone said, " Un­der the terms of the ac­qui­si­tion, Trin­i­ty share­hold­ers will re­ceive 1.5 com­mon shares of Touch­stone for each Trin­i­ty com­mon share held. Based up­on the clos­ing Touch­stone share price of 41.25 pence on AIM on April 30, 2024, the ac­qui­si­tion rep­re­sents an im­plied val­ue of Trin­i­ty of ap­prox­i­mate­ly US$30.1 mil­lion. This rep­re­sents a 71.9 per cent pre­mi­um to the April 30, 2024 clos­ing price of Trin­i­ty shares," of 36 pence. Trin­i­ty is list­ed on the Lon­don Stock Ex­change's Al­ter­na­tive In­vest­ment Mar­ket.

Touch­stone Pres­i­dent and Chief Ex­ec­u­tive Of­fi­cer Paul Baay said, "We be­lieve this ac­qui­si­tion rep­re­sents a com­pelling strate­gic op­por­tu­ni­ty which will de­liv­er en­hanced scale, bal­ance sheet strength, and growth op­por­tu­ni­ties. The busi­ness com­bi­na­tion will cre­ate an up­stream oil and nat­ur­al gas com­pa­ny of in­creased scale in Trinidad, en­hanc­ing our abil­i­ty to de­liv­er growth in re­serves, pro­duc­tion and cash flows for the ben­e­fit of our com­bined share­hold­ers and lo­cal stake­hold­ers. The com­bined group will be able to in­vest in mul­ti­ple de­vel­op­ment pro­grammes and ac­cel­er­ate the growth po­ten­tial of the en­larged as­set base, there­by giv­ing us the po­ten­tial to ma­te­ri­al­ly en­hance long-term val­ue."

Touch­stone said the Trin­i­ty as­sets are a nat­ur­al ex­ten­sion of Touch­stone's as­sets in Trinidad as­sets. Touch­stone said the ad­di­tion of Trin­i­ty's ex­ist­ing pro­duc­tion port­fo­lio, along with its ex­plo­ration and de­vel­op­ment as­sets, will po­si­tion Touch­stone as a key play­er in the Trinidad oil and gas sec­tor, and one of the lead­ing in­de­pen­dent op­er­at­ing com­pa­nies ded­i­cat­ed to in­vest­ing in both on­shore and off­shore ac­tiv­i­ty to grow Trinida­di­an oil and nat­ur­al gas pro­duc­tion.

Touch­stone said it will have strong cash flows from op­er­a­tions from an in­creased crude oil and nat­ur­al gas pro­duc­tion base as "the com­bined en­ti­ty will have an at­trac­tive port­fo­lio of ex­plo­ration and de­vel­op­ment prospects across Trin­i­ty's on­shore Hum­ming­bird port­fo­lio and Buenos Ayres block (sub­ject to the ex­e­cu­tion of the rel­e­vant li­cence agree­ment), as well as its TGAL dis­cov­ery at the off­shore Ga­le­o­ta block, and at our Or­toire area and Cipero, Charu­ma, and Rio Claro blocks (sub­ject to the ex­e­cu­tion of the rel­e­vant li­cence agree­ments)."

To­geth­er, Touch­stone said, "the port­fo­lio pro­vides a di­ver­si­fied op­por­tu­ni­ty with the po­ten­tial to ma­te­ri­al­ly en­hance the long-term val­ue of the com­bined en­ti­ty."

Ac­cord­ing to the dossier at­tached to the re­lease. Trin­i­ty pro­duced net dai­ly av­er­age crude oil sales vol­umes of 2,790 bbls/d dur­ing the year end­ed De­cem­ber 31, 2023 and 2,669 bbls/d dur­ing the three months end­ed March 31, 2024.

The trans­ac­tion is sub­ject to share­hold­er and reg­u­la­to­ry ap­proval, which would com­prise a green­light from the Min­istry of En­er­gy, Her­itage Pe­tro­le­um, which is Trin­i­ty's part­ner and the Fair Trad­ing Com­mis­sion.

In a sep­a­rate news re­lease, Trin­i­ty CEO, Je­re­my Bridglals­ingh, said:“I am pleased to be rec­om­mend­ing Touch­stone’s of­fer to our share­hold­ers. Our two com­pa­nies have op­er­at­ed in close prox­im­i­ty over many years. The pre­mi­um of­fered demon­strates the val­ue Touch­stone sees in Trin­i­ty’s team and op­er­a­tions and its con­fi­dence in the fu­ture po­ten­tial of the en­larged busi­ness.”