Leni Gas & Oil (LGO) has signed heads of agreement to acquire 100% interest of a Trinidad company holding the service contract for the Trinity-Inniss field.
The deal with Caribbean Rex, subject to the approval by the fields’ owner Petroleum Company of Trinidad and Tobago (Petrotrin), covers the full acquisition of Fram Exploration, which holds the incremental production service contract (IPSC) for Trinity-Inniss.
The asset, located close to LGO’s existing Goudron field, was originally discovered in 1956 and developed by Texaco from 1958, which drilled a total of 134 wells targeting the Herrera Sandstones.
Production to date totals approximately 23 million barrels, with Texaco hitting peak production in its first year of operation at 4,200 bopd.
Current production from Trinity-Inniss averages between 140 and 150 barrels of oil per day (bopd) from approximately 25 active wells.
An existing certificate of compliance, granted to Fram in 2012, sets out the the drilling of 12 new wells and 50 sidetracks or replacement wells.
LGO has agreed to pay Caribean Rex $5million for all the outstanding shares in Fram, either by drawing down from the company’s loan from YA Global Master Fund or partially from cashflow from the Goudron development program.
“We are delighted to have the opportunity of adding a further producing IPSC in the Eastern Fields Area of Trinidad to our portfolio,” said Neil Ritson, LGO’s chief executive.
“This acquisition is a natural extension of our Trinidad-focused oil field redevelopment strategy and is ideally timed to take advantage of our growing capability.
“Although our current focus is the drilling of new well developments at Goudron, we would be able to quickly transfer Goudron’s work-over expertise and some of the work-over equipment to Trinity-Inniss to significantly increase the field’s oil production from 150 bopd.
“In the medium term, we would be able to extend drilling work to new production wells and the Trinity-Inniss Field also has longer term water-flood potential. ”