Trinity E&P Acquires 100% Interest in PS-4 Block, Onshore Trinidad
AIM-listed Trinity Exploration & Production Plc has entered into a Sale and Purchase Agreement (SPA) with independent E&P company, Moonsie Oil Company Ltd. to acquire a 100% interest in the PS-4 block lease operatorship sub-license located onshore Trinidad for a total cash consideration of US$3.5 million, plus certain contingent payments of up to US$500,000, subject to customary purchase price adjustments.
The license is currently pending administrative process for renewal from state-owned Heritage Petroleum Co. Ltd. (HPCL), alongside all lease operatorship agreements (LOAs). Once renewed, the license will be a 10-year sub-license with an effective date of January 1, 2021, pursuant to which further renewals will be expected.
Under the terms of the SPA, Trinity E&P will acquire the block for a total cash consideration of US$3.5 million. In addition, a contingent consideration of up to USD500,000 is payable to HPCL, if HPCL requires Moonsie Oil to pay a transaction fee, applicable only if the ownership is transferred within two years of a license term.
The PS-4 block covers an area of approximately 4 sq. km. located in the prolific producing Grande Ravine area within the Super-Giant Forest Reserve Field in the Southern basin, onshore Trinidad. The block is contiguous to Trinity E&P’s largest and most prolific onshore Blocks WD-5/6 and WD-2, includes six wells, drilled in the last 30 years, and offers significant opportunities to add reserves and production. Production on the block started in the 1930s, primarily targeting the Morne L’Enfer, Forest, and Cruse formations. During 2020, the block had an average daily production of approximately 83 barrels of oil per day (bbls/d).
“The PS-4 Block has achieved very modest recovery factors to date, relative to the substantial estimated original oil in place and the surrounding analogies of the WD5/6 and WD2 blocks, thereby extending our platform to showcase our differentiated technical capabilities. With ongoing reinvestment into the fields, we foresee many opportunities to increase production alongside further exploration and appraisal targets that may be generated,” said Bruce Dingwall, CBE & Executive Chairman of Trinity E&P.
England-based Trinity E&P is engaged in the exploration and production activities in Trinidad & Tobago, and holds interests in a portfolio of onshore and offshore assets, including current production as well as significant near-term production growth opportunities from lo- risk developments and multiple exploration prospects.
Trinidad-based Moonsie Oil is engaged in the exploration, production, and development of oil & gas assets in Trinidad & Tobago.
The transaction is subject to customary closing conditions, including the acceptance of Trinity E&P as the operator by HPCL, government approvals relating to title transfer and change of operatorship, and is expected to close on or before October 29, 2021, with an effective date of January 1, 2021.