Last update: 08-Dec-2013 4:55 am
Sunday, December 08, 2013
Trinidad & Tobago Guardian Online
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Energy Minister tours Goudron oilfield
Energy and Energy Affairs Minister Kevin Ramnarine published on his Twitter account on Friday that he “spent the day in the country’s remotest oilfield—the Goudron oil field in Guayaguayare with Leni Gas and Oil (LGO) and Petrotrin.” Ramnarine also published on social media a photo of the new pumping jacks at the Goudron Field.
On September 18, LGO announced that exploration and production (E&P) activities in T&T had been the company’s focus since 2011. Company officials said the T&T E&P activities are anticipated to be a dominant part of LGO’s growth agenda, especially during the extensive redevelopment of the Goudron Field, where, subject to financing, some 30 new wells are planned over the next few years.
The London-listed company praised the T&T government’s capital allowances in the national 2013/2014 budget saying they were “anticipated to have an immediate positive impact on cash flow, although there is no marked reduction on overall tax take over the life of the project. Based solely on the company’s plan to carry out field infill drilling at Goudron over the next two years the changes would result in a positive cash flow impact of approximately US$1 million per annum over the next three years.”
LGO has continued well reactivations at Goudron, and all the beam pumps necessary to complete a programme of 19 additional reactivations by November have been delivered.
“Plans to drill the first new infill wells at Goudron for more than 20 years are now well advanced and pending the anticipated receipt of approvals from the Environmental Management Agency (EMA), drilling is still hoped to commence in late 2013,” the company said, adding that “the completion of the loan financing which is ongoing,” is hoped to close with an initial drawdown in the next few weeks.
LGO also plans to engage in exploration within the Goudron Block in the next few years, and to explore far more extensively in the Cedros Peninsula where the company holds a significant number of private petroleum leases. With these activities and the agreement to cross assign further leases with Beach Oilfield Ltd, changes to exploration capital allowances will make “a further more significant positive impact.” However, LGO said the scale of this positive impact depends on the amount and timing of drilling undertaken.
Earlier this month, LGO told UK investors its “post-tax profit from operations now exceeds US$300,000 per month and the company sees this financial position as sustainable and will be further strengthened as new wells continue to be put on production in Trinidad and well enhancement work is undertaken in Spain.”
On August 14, LGO announced that it had successfully concluded an agreement with Petrotrin “to reduce substantially the overriding royalty rates associated with oil production from the Goudron Incremental Petroleum Service Contract (IPSC) and to extend the contract by five years to November 2024 in consideration for LGO undertaking additional drilling activities at the onshore Goudron Field in eastern Trinidad.”
LGO’s share price has been sliding since November last year. At the close of trading on Friday the last price quoted was a fraction of a pence, 0.86. LGO posted £2.308 million in revenue for the period ended June 30, its latest reporting period. This represented an increase from the £1.753 million in revenue for the same period in 2012.
LGO registered a pre-tax group loss of £1.389 million in the first quarter of this, deeper than its loss of £971,000 for the corresponding period in 2013. The company said its group loss was due to higher costs arising “from the ongoing development of the Goudron asset, and exceptional one off items, including the costs associated with debt financing and the legal case against Mediterranean Oil and Gas plc (MOG).”
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