Trinity Exploration & Production Plc announced Wednesday that it has entered into an agreement to sell its interests in the WD-2, WD-5/6, WD-13, WD-14 and FZ-2 licenses, located onshore Trinidad, to Touchstone Exploration Inc, for $20.8 million.
The transaction will enable Trinity to repay “in full” its senior secured debt facility and “strengthens the company’s balance sheet and working capital position”, according to a Trinity statement. Under the terms of the agreement, Touchstone will deposit an initial payment of $2.08 million into escrow to be released and the remaining $18.72 million will be paid on completion. The transaction is expected to complete in the fourth quarter of 2015 and will be effective as at the completion date.
Combined, the blocks have produced at an average rate of 1,574 barrels of oil per day to August 31. The carried book value of the assets as at August 31 2015 was $17.17 million. The sale is subject to standard regulatory approvals, including final approval from the Petroleum Company of Trinidad and Tobago Limited (Petrotrin) and approval by Trinity’s shareholders.
Joel Pemberton, CEO of Trinity, commented in a company statement:
“Trinity’s onshore portfolio has played a significant role in the early evolution of the company. However, greatest shareholder value can now be delivered by relieving balance sheet pressures and providing the financial flexibility to drive forward a focused offshore portfolio with a defined reserves base and significant further resource potential. Trinity is also seeking to high grade its inventory of works within its offshore portfolio in Trinidad and Tobago and is continuing to reduce its overhead costs.”
Following the Transaction, Trinity remains one of the largest independent offshore oil and gas companies in Trinidad with a portfolio of assets spanning the East and West Coasts. The company’s remaining assets contain management estimate net 2P reserves of 18.5 million barrels of oil equivalent, and 21.7 mmboe of contingent resources, and produced at an average rate of 1,333 barrels of oil equivalent per day to June 30.
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