Columbus Energy Resources has agreed to acquire the remaining 50% stake it did not own previously in the Icacos field located in the South West Peninsula of Trinidad (SWP) to take full ownership.
Image: Onshore drilling. Photo: courtesy of Stuart Miles/Freedigitalphotos.net.
The Company currently holds a 50% non-operated interest in the Icacos Field, via its subsidiary Leni Trinidad Limited (“LTL”). The other joint venture partner is Touchstone Exploration Inc (“Touchstone”), via its subsidiary Primera Oil and Gas Limited (“Primera”) who holds a 50% interest and is operator.
As announced on 16 April 2018, the Company and Touchstone have agreed, in principle, for LTL to acquire Primera’s 50% interest in the Icacos field.
The Company announces that LTL and Primera have now signed a sale and purchase agreement (“SPA”) and, subject to certain regulatory approvals and completion of the transaction, LTL will be the 100% owner of the Icacos field and Operator, with the effective date of the transaction being 1 April 2018.
The consideration for the transaction is USD$500,000 (the “Minimum Payment”) for Primera’s current net 11 barrels of oil per day (“bopd”). However, LTL will not pay any upfront consideration for the purchase but will pay the consideration over time until 1 January 2021 through Primera receiving the net revenue it would have received had it retained its interest.
Primera will also receive, in the event of increased production, 25% of any net revenue above the current baseline. Should these cumulative payments not exceed the Minimum Payment, LTL will pay the difference between the amount received and the Minimum Payment. LTL shall be entitled to 100% of all revenue from Icacos from 1 January 2021.
Columbus executive chairman Leo Koot said: “We are pleased to have signed a sale and purchase agreement for the purchase of a 50% interest in the Icacos field and we look forward to quickly closing the transaction, further strengthening our position in the SWP, so that we can increase production from Icacos and integrate the acreage into our regional strategy.
“We are on track to building a core exploration, appraisal, development and potentially significant production hub in the South West Peninsula of Trinidad. In line with our ongoing focus on capital discipline, we are not expecting to pay any upfront payments for the Icacos purchase.
“The consideration will be deferred and mirror the actual production levels from the Icacos field. All operational activities on Icacos will be funded from existing cash resources.”
Source: Company Press Release