18th Sep 2013 11:33
LONDON (Alliance News) - Leni Gas and Oil PLC Wednesday said that the recently announced tax allowances in Trinidad and Tobago will increase its cashflow by approximately USD1 million per annum over the next three years.
The oil-and-gas production-and-exploration company said it would see an immediate benefit from the new tax rules for oil and gas companies working in Trinidad and Tobago, where some of the company's operations are focused.
It said that the cashflow increase of roughly USD1 million per annum over the net three years is based solely on its plan to carry out infill drilling at Goudron Field over the next two years.
In the country's 2014 budget statement last week, it made a number of changes, including bringing in greater flexibility on how investment tax credits can be used and more generous capital allowances in some areas. Changes are effective from January.
The company said that the new rules would improve cashflow and boost returns on future projects, allowing more investment in exploration and development.
"LGO welcomes the additional incentives proposed by the Ministry of Finance. These changes increase the tax shelter in early years and therefore reduce the cash flow requirements associated with a given program," Chief Executive Neil Ritson said in a statement. "This is a welcome development that has positive economic benefits to LGO as it seeks to increase production from existing fields and explore for new resources in Trinidad."
Leni Gas and Oil also said that its plans to drill the first new infill wells in more than 20 years at Goudron are now well advanced and pending approval from the Environmental Management Agency. It said that it still hopes drilling will commence in late 2013.
On Friday, Trinity Exploration & Production PLC also said it would benefit from the new tax rules.
Leni shares were down 1.7% before midday Wednesday, trading at 0.939 pence per share. Trinity's share were 110.00 pence, down 0.38p.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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