Columbus Energy Resources Renegotiates South West Peninsula Deal

19th Mar 2018 12:39

LONDON (Alliance News) - Columbus Energy Resources PLC said Monday that it has renegotiated the transaction for Beach Oilfield Ltd, and entered into a separate agreement with Singh's Estates Ltd for the South West Peninsula of Trinidad.

In 2015, the the oil and gas producer acquired the "deep rights" held by Beach Oilfield in the South West Peninsula, which included the purchasing of a 25% interest in Beach Oilfield. In January 2017, the transaction was amended, with Columbus acquiring the remaining 75% for USD184,000 and Columbus adopting a loan held by Beach Oilfield of USD1.1 million.

Columbus will now pay up to USD450,000 to Beach Oilfield, USD80,000 to state-owned oil company Petrotrin to acquire a 28% interest in the Bonasse field, which will lead to the acquisition of access to all oil and gas rights on the South West Peninsula and Beach Oilfield retaining the USD1.1 million loan.

Also, Columbus will pay a deferred consideration to Beach Oilfield of USD500,000 on the development of any field within the lease, and a royalty of 3.0% on net production from a development of the South West Peninsula licence.

In addition, Columbus signed an agreement for lease with Singh's (Cedros) Estates Ltd, which ensures that Columbus has access to all of Peninsula until January 2019, which afterwards grants the future lease for a period of 27 years.

For the agreement, Columbus will pay Singh Estates for USD375,000, and for the future lease, Columbus will pay USD70,000 per annum, with a royalty of up to 12.5% on gross production and drilling bonuses of up to USD15,000 on the spud of each of the first three deep wells.

"I would like to thank BOLT and Singh Estates for their willingness to negotiate a deal that we believe offers the best chance for all parties to benefit from a revived and rejuvenated campaign on the SWP. We look forward to working with Singh Estates, the Ministry of Energy and Energy Industries and other stakeholders to fully explore and develop the SWP. This is a very exciting time for the company and all involved and provides a unique opportunity to potentially deliver transformational growth of our business to the benefit of our shareholders and Trinidad & Tobago," said Executive Chairman Leo Koot.

Shares in Columbus Energy Resources were up 5.1% at 4.84 pence on Monday.

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