LGO Energy has released details regarding the progress being made on its Cedros Peninsula interests, located in southwest Trinidad. The Cedros Peninsula is largely unexplored with regard to deep potential and in its close proximity to the prolific East Venezuelan Basin, of which the Cedros is geologically a part.
Acquiring BOLT's interests in oil and gas leases
LGO Energy has recently entered into a further rights agreement with Beach Oilfield Limited (BOLT) at Cedros Peninsula as part of the previously announced arrangements to acquire all of BOLT's interests in oil and gas leases, gaining rights to targets below 7000 ft.
BOLT deep rights agreement
On 9 December 2013, LGO and BOLT agreed to collaborate to cross-assign their interests to explore the deep horizons below 7000 ft. The original consideration agreed was US$2.5 million and LGO advanced US$400 000 in November 2014 to assist in transferring and extending certain leases.
The parties agree that the required licenses can be obtained, but further funds are required to progress licensing matters. Therefore, LGO will advance a further US$200 000 to BOLT as part consideration for the deep rights. As a result, LGO's exclusivity has been extended to 30 September 2016.
Upon completion, LGO will grant BOLT a gross overriding royalty of 5% on the gross production of petroleum from the deep rights.
The BOLT agreement transaction covers approximately 5450 acres. LGO Energy will hold rights to approximately 10 900 acres of petroleum leases in the Cedros Peninsula where it has recently conducted a soil geochemistry study in collaboration with BOLT.
Comment from LGO Energy
Neil Ritson, Chief Executive of LGO Energy, commented: "We are now making excellent progress in bringing together the licensing and the technical work in the Cedros so that we can begin drilling in 2016 and beyond. Early indications from our geochemistry and airborne gravity surveys completed recently are that we may well have multiple prospects from which to choose the first well target."
Adapted from press release by David Bizley