Af­ter pay­ing more than $1.27 bil­lion in tax­es, Her­itage Pe­tro­le­um Co Ltd record­ed a net prof­it of $682.7 mil­lion last year, ac­cord­ing to its fi­nan­cial state­ment for the year end­ed Sep­tem­ber 30, 2021.

“Against the back­drop of strength­en­ing de­mand for crude and high­er mar­ket prices in 2021, Her­itage and its sub­sidiaries (Her­itage, the com­pa­ny) have con­tin­ued to de­liv­er strong earn­ings and cash gen­er­a­tion for 2021,” its chair­man Michael Quam­i­na stat­ed.

Her­itage record­ed rev­enue of $6.8 bil­lion for the year which Quam­i­na stat­ed was dri­ven by im­proved crude oil prices av­er­ag­ing 31 per cent high­er than in 2020 and high­er pro­duc­tion lev­els.

Year on year, over­all crude pro­duc­tion grew by five per cent to 41,200 bopd. Quam­i­na said in the face of the on­go­ing pan­dem­ic and a volatile eco­nom­ic en­vi­ron­ment, this is es­pe­cial­ly note­wor­thy and tes­ta­ment to the Com­pa­ny’s com­mit­ment and abil­i­ty to rise above the op­er­a­tional chal­lenges pre­sent­ed by COVID-19.

Her­itage al­so had an­oth­er suc­cess­ful year of Re­plac­ing Re­serves with a top quar­tile 109 per cent re­serves re­place­ment ra­tio through a strong fo­cus on workovers, pro­duc­tion op­ti­mi­sa­tion and Im­proved oil re­cov­ery, he stat­ed.

Ac­cord­ing to Quam­i­na in ad­di­tion to the “strong” rev­enue gen­er­a­tion, “dis­ci­plined” cost man­age­ment has con­tributed to prof­it be­fore tax of $2 bil­lion.

This rep­re­sent­ed a 97 per cent in­crease when com­pared to the $1.6 bil­lion made in 2020.

Re­fi­nances USD loan

“As of the date of this pub­li­ca­tion, I am pleased to re­port that the Com­pa­ny would have suc­cess­ful­ly closed the re­fi­nanc­ing of the Se­nior Se­cured debt of the Group via a ten­der of­fer for the TPHL 2026 Notes and the is­suance of a new Her­itage 2029, US$500 mil­lion bond and a new US$475 mil­lion Her­itage Term Loan.

“The re­fi­nanc­ing pro­vid­ed sig­nif­i­cant ben­e­fits to the TPHL Group, in­clud­ing low­er­ing our weight­ed av­er­age cost of debt, ex­tend­ing our av­er­age life of debt ma­tu­ri­ties there­by free­ing up near term cash for pro­duc­tion win­ning Chair­man’s Re­port for the year end­ed 30 Sep­tem­ber 2021 ac­tiv­i­ties and cur­ing the ad­min­is­tra­tive de­faults that arose as a re­sult of the late pub­li­ca­tion of the TPHL Con­sol­i­dat­ed 2019 Fi­nan­cials,” Quam­i­na stat­ed.

Her­itage Chair­man ar­gued that im­por­tant­ly, from a na­tion­al per­spec­tive, the re­fi­nanc­ing has re­sult­ed in all of the non-core as­sets of TPHL, in­clud­ing agri­cul­tur­al, res­i­den­tial and recre­ation­al lands be­ing made ful­ly avail­able to be best utilised by the Gov­ern­ment of T&T for the ben­e­fit of the cit­i­zen­ry.

Quam­i­na stat­ed that Her­itage will con­tin­ue to shape its sus­tain­abil­i­ty agen­da and its first soon to be pub­lished ESG Re­port, tells the nar­ra­tive of the com­pa­ny’s jour­ney and achieve­ments over the pe­ri­od 2020 to 2021.

“As part of our com­mit­ment to ac­cel­er­at­ing progress on our key sus­tain­abil­i­ty pro­grammes (pro­tect­ing the en­vi­ron­ment, build­ing com­mu­ni­ty ca­pac­i­ty, sup­port­ing eco­nom­ic de­vel­op­ment and em­pow­er­ing fu­ture lead­ers), we have un­der­tak­en a com­pre­hen­sive re­view of our op­er­a­tions and sys­tems. Our ESG Re­port re­flects our com­mit­ment to con­tin­u­ous im­prove­ment as we strive to be­come a more sus­tain­able and re­silient busi­ness,” Quam­i­na stat­ed.

Quam­i­na added that many plans for stake­hold­er en­gage­ment and ex­er­cis­es in com­mu­ni­ty re­la­tions, were cur­tailed be­cause of the COVID-19 pan­dem­ic and the re­stric­tions that were put in place to stop its spread.

He who­ev­er said the com­pa­ny was able to piv­ot and change its pro­pos­als to suit the needs of our fence­line com­mu­ni­ties.

“We de­liv­ered food ham­pers where there was sig­nif­i­cant need and our ‘Here We Grow’ Pro­gram­mme do­nat­ed over 4,000 seedlings to pro­mote home gar­den­ing. Dur­ing this very chal­leng­ing pe­ri­od, we al­so sup­port­ed the Col­la­tion Against Do­mes­tic Vi­o­lence,” he stat­ed.

For the up­com­ing year Quam­i­na said as the pan­dem­ic is on­go­ing, Her­itage will con­tin­ue to take steps to sup­port and pro­tect its em­ploy­ees and con­trac­tors.

“The strong fi­nan­cial re­sults of 2021, as well as a sus­tained pe­ri­od of ro­bust oil prices and the ex­pect­ed launch of our Drilling Pro­gramme in the cur­rent fis­cal year, gives me the con­fi­dence that we are well placed to show con­tin­ued growth in 2022 and progress our strat­e­gy,” Quam­i­na stat­ed.

“We are de­liv­er­ing for to­day while plan­ning for the fu­ture,” he added.

Her­itage Pe­tro­le­um was in­cor­po­rat­ed in T&T on 5 Oc­to­ber 2018.

Her­itage is pri­mar­i­ly en­gaged in ex­plo­ration, de­vel­op­ment, pro­duc­tion and mar­ket­ing of crude oil.

The sole share­hold­er is Trinidad Pe­tro­le­um Hold­ings Lim­it­ed (TPHL).

Pri­or to Her­itage’s for­ma­tion, its ex­plo­ration and pro­duc­tion ac­tiv­i­ties were con­duct­ed by the Pe­tro­le­um Com­pa­ny of T&T Ltd (Petrotrin).

Petrotrin un­der­took a re­struc­tur­ing in 2018 and by virtue of the Mis­cel­la­neous Pro­vi­sions (Her­itage Pe­tro­le­um, Paria Fu­el Trad­ing Co Ltd, Guaracara Re­fin­ing Com­pa­ny Lim­it­ed (Vest­ing) Bill, 2018 ef­fec­tive 1 De­cem­ber 2018, Petrotrin’s as­sets rel­a­tive to ex­plo­ration and pro­duc­tion were vest­ed in Her­itage Pe­tro­le­um.

Petrotrin’s as­sets re­lat­ed to ter­mi­nalling and re­fin­ery op­er­a­tions were vest­ed to Paria and Guaracara re­spec­tive­ly.

The as­so­ci­at­ed de­com­mis­sion­ing and dis­man­tle­ment oblig­a­tions in re­spect of E&P, ter­mi­nalling and re­fin­ing op­er­a­tions were al­so trans­ferred to the re­spec­tive en­ti­ties.

As a re­sult, Her­itage’s open­ing as­sets and li­a­bil­i­ties orig­i­nat­ed as a re­sult of the above, with the cor­re­spond­ing li­a­bil­i­ty due to Petrotrin.

Her­itage (as well as Paria and Guaracara) is a guar­an­tor of the par­ent com­pa­ny’s, (TPHL’s), se­nior se­cured and un­se­cured debt oblig­a­tions.

Col­lec­tive­ly, Her­itage, TPHL, Paria and Guaracara are the loan par­ties.

TPHL and the guar­an­tors are cur­rent­ly in de­fault of cer­tain covenants of the cred­it agree­ment and In­den­ture, ac­cord­ing to the fi­nan­cial state­ment.