Range is pleased to announce that it has entered into a binding sale and purchase agreement to acquire certain producing assets from a wholly owned subsidiary of Trinity Exploration and Production Plc for a cash consideration of US$4.55 million. Range will fund the acquisition from the existing cash resources.
Pursuant to the acquisition, the Company will acquire a significant interest in two offshore producing licences, Brighton Marine and Point Ligoure-Guapo Bay-Brighton Marine. Both licences are located offshore West Coast of Trinidad, with a combined current production of approximately 200 bpd. Range will be the operator of both blocks.
- Increases the company's current production in Trinidad by approximately 33% to over 800 bpd.
- Increases Range's footprint in Trinidad and provides significant operational synergies with the Company's existing operations.
- Net 2P reserves of 2.6 million bbls (as reported by Trinity at 31/12/2016).
- The West Coast Assets are profitable at current production levels and oil prices as a result of recent optimisation and cost reduction exercises undertaken by Trinity.
- Located near to shore in easily-accessible shallow water, with full infrastructure and facilities in place.
- Significant potential to increase production through low risk workovers of existing wells. Longer-term opportunities to grow reserves and production through further development and exploration activity.
- Low per barrel acquisition cost of US$1.75 per 2P barrel.
- High working interest: 100% for BM and 70% for PGB.
- Provides additional options and drill prospects for the RRDSL drilling business which is being acquired by the Company.
Commenting on the acquisition Chairman, Kerry Gu said:
"We are extremely pleased to have agreed a second acquisition of upstream assets this month. Expansion of our existing portfolio of producing assets in Trinidad will not only provide additional production, cashflows, reserves, drill targets and enhanced oil recovery potential, but it is also expected to result in further improvements to the cost structure across our Trinidad business.
We see significant potential within the West Coast Assets to grow production and believe that these assets are highly complementary to our existing portfolio. We look forward to welcoming the skilled West Coast operating team to Range."
The assets are located in shallow water, offshore West coast Trinidad, a proven hydrocarbon basin with a world-class source rock. The two producing properties cover an aggregate 8500 hectares2 (prior to a 50% acreage surrender on PGB which is awaiting Ministry approval).
The BM field has been in production since the 1950s with over 60 million bbls produced to date. The field is operated primarily via 9 unmanned, offshore platforms with all oil handling and sales infrastructure in place onshore. The current PGB licence was awarded to Trinity in 2012 but similarly to BM, the field overall has a long history of production prior to that date from the previous Pt.Ligoure licence.
The current combined production of the West Coast Assets is approximately 200 bpd with last reported 2P reserves of 2.6 million bbls. Following the acquisition, the Company currently intends to carry out two well workovers on the BM field, which has the potential to increase production by over 100 bpd.
Longer-term production growth could be achieved from continued workovers, infrastructure works, infill drilling and a greenfield development programme. Furthermore, there are potential opportunities from enhanced oil recovery which may be considered in the future to increase production and reserves. At PGB there is also a heavy oil opportunity which has been previously tested at over 300 bpd of production.
There are further opportunities that comprise exploration prospects from the prolific Forest and Manzanilla reservoirs. Exploration potential in the area has been evidenced by Petrotrin's Jubilee field discovery in 2012, South East of Cluster 6-ALM 22 well, contiguous to the PGB licence area.
Key terms of the SPA
- Range Resources Trinidad Limited (a wholly owned subsidiary of Range), has entered into a binding SPA to acquire the West Coast Assets from Oilbelt Services Limited (a wholly owned subsidiary of Trinity), for a total cash consideration of US$4.55 million.
- The total cash consideration will be placed into an escrow account until completion.
- 12 employees from Trinity who currently operate the West Coast Assets will be transferred to Range.
- Completion of the acquisition is conditional (amongst other things) upon a waiver of pre-emption rights by Petrotrin and receipt of all necessary regulatory approvals from Petrotrin and the Ministry of Energy and Energy Industries of Trinidad and Tobago (MEEI).
- Backstop date for completion is 30 November 2017 (or such other date as mutually agreed by the parties).
Range currently anticipates that completion of the transaction will occur during Q4 2017.
The company will provide shareholders with an updated corporate presentation during September 2017.
Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/11082017/range-resources-acquisition-of-producing-assets-in-trinidad/