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Columbus Energy eyes acquisition of Icacos field asset
Oil and gas producer Columbus Energy provided investors with a confident update on Monday regarding its potential acquisition of the Icacos field on the south-west peninsula of Trinidad.
AIM-quoted Columbus has agreed, in principle, to acquire a 50% interest in the field from the project's operator Primera Oil, a subsidiary of Touchstone Exploration, via its own local subsidiary, Leni Trinidad Limited.
Leni Trinidad Limited, which currently holds a 50% non-operated interest in the Icacos Field, would become the 100% owner and operator of the asset as a result of the transaction.
While noting that the transaction was still subject to a definitive sale and purchase agreement and certain regulatory approvals, Columbus was confident that it could work with Touchstone to complete the relevant paperwork and take over operatorship during the second quarter of 2018.
Columbus will pay $500,000 for Primera's current net 11 barrels of oil per day, however, its subsidiary would not pay any upfront consideration for the purchase and will instead, pay the consideration over time until 1 January 2021 by allowing Primera to receive the net revenue it would have received had it retained its interest.
Primera will also receive, in the event of increased production, 25% of any net revenue above the current baseline.
Leo Koot, executive chairman of Columbus, said, "In line with our ongoing focus on capital discipline, we are not expecting to pay any upfront payments for the Icacos purchase. The consideration will be deferred and mirror the actual production levels from the Icacos field. All operational activities on Icacos will be funded from existing cash resources."
As of 0945 BST, shares had dipped 1.98% to 4.95p.