Aleem Khan

En­er­gy and En­er­gy Af­fairs Min­is­ter Kevin Ram­nar­ine pub­lished on his Twit­ter ac­count on Fri­day that he "spent the day in the coun­try's re­motest oil­field–the Goudron oil field in Guayagua­yare with Leni Gas and Oil (LGO) and Petrotrin." Ram­nar­ine al­so pub­lished on so­cial me­dia a pho­to of the new pump­ing jacks at the Goudron Field.

On Sep­tem­ber 18, LGO an­nounced that ex­plo­ration and pro­duc­tion (E&P) ac­tiv­i­ties in T&T had been the com­pa­ny's fo­cus since 2011. Com­pa­ny of­fi­cials said the T&T E&P ac­tiv­i­ties are an­tic­i­pat­ed to be a dom­i­nant part of LGO's growth agen­da, es­pe­cial­ly dur­ing the ex­ten­sive re­de­vel­op­ment of the Goudron Field, where, sub­ject to fi­nanc­ing, some 30 new wells are planned over the next few years.

The Lon­don-list­ed com­pa­ny praised the T&T gov­ern­ment's cap­i­tal al­lowances in the na­tion­al 2013/2014 bud­get say­ing they were "an­tic­i­pat­ed to have an im­me­di­ate pos­i­tive im­pact on cash flow, al­though there is no marked re­duc­tion on over­all tax take over the life of the project. Based sole­ly on the com­pa­ny's plan to car­ry out field in­fill drilling at Goudron over the next two years the changes would re­sult in a pos­i­tive cash flow im­pact of ap­prox­i­mate­ly US$1 mil­lion per an­num over the next three years."

LGO has con­tin­ued well re­ac­ti­va­tions at Goudron, and all the beam pumps nec­es­sary to com­plete a pro­gramme of 19 ad­di­tion­al re­ac­ti­va­tions by No­vem­ber have been de­liv­ered.

"Plans to drill the first new in­fill wells at Goudron for more than 20 years are now well ad­vanced and pend­ing the an­tic­i­pat­ed re­ceipt of ap­provals from the En­vi­ron­men­tal Man­age­ment Agency (EMA), drilling is still hoped to com­mence in late 2013," the com­pa­ny said, adding that "the com­ple­tion of the loan fi­nanc­ing which is on­go­ing," is hoped to close with an ini­tial draw­down in the next few weeks.

LGO al­so plans to en­gage in ex­plo­ration with­in the Goudron Block in the next few years, and to ex­plore far more ex­ten­sive­ly in the Ce­dros Penin­su­la where the com­pa­ny holds a sig­nif­i­cant num­ber of pri­vate pe­tro­le­um leas­es. With these ac­tiv­i­ties and the agree­ment to cross as­sign fur­ther leas­es with Beach Oil­field Ltd, changes to ex­plo­ration cap­i­tal al­lowances will make "a fur­ther more sig­nif­i­cant pos­i­tive im­pact." How­ev­er, LGO said the scale of this pos­i­tive im­pact de­pends on the amount and tim­ing of drilling un­der­tak­en.

Ear­li­er this month, LGO told UK in­vestors its "post-tax prof­it from op­er­a­tions now ex­ceeds US$300,000 per month and the com­pa­ny sees this fi­nan­cial po­si­tion as sus­tain­able and will be fur­ther strength­ened as new wells con­tin­ue to be put on pro­duc­tion in Trinidad and well en­hance­ment work is un­der­tak­en in Spain."

On Au­gust 14, LGO an­nounced that it had suc­cess­ful­ly con­clud­ed an agree­ment with Petrotrin "to re­duce sub­stan­tial­ly the over­rid­ing roy­al­ty rates as­so­ci­at­ed with oil pro­duc­tion from the Goudron In­cre­men­tal Pe­tro­le­um Ser­vice Con­tract (IP­SC) and to ex­tend the con­tract by five years to No­vem­ber 2024 in con­sid­er­a­tion for LGO un­der­tak­ing ad­di­tion­al drilling ac­tiv­i­ties at the on­shore Goudron Field in east­ern Trinidad."

LGO's share price has been slid­ing since No­vem­ber last year. At the close of trad­ing on Fri­day the last price quot­ed was a frac­tion of a pence, 0.86. LGO post­ed �2.308 mil­lion in rev­enue for the pe­ri­od end­ed June 30, its lat­est re­port­ing pe­ri­od. This rep­re­sent­ed an in­crease from the �1.753 mil­lion in rev­enue for the same pe­ri­od in 2012.

LGO reg­is­tered a pre-tax group loss of �1.389 mil­lion in the first quar­ter of this, deep­er than its loss of �971,000 for the cor­re­spond­ing pe­ri­od in 2013. The com­pa­ny said its group loss was due to high­er costs aris­ing "from the on­go­ing de­vel­op­ment of the Goudron as­set, and ex­cep­tion­al one off items, in­clud­ing the costs as­so­ci­at­ed with debt fi­nanc­ing and the le­gal case against Mediter­ranean Oil and Gas plc (MOG)."