Independent energy company Trinity yesterday announced that as part of the ongoing review process it is divesting a non-core asset. Oilbelt Services Limited, a fully owned subsidiary of Trinity, has signed a sale and purchase agreement to sell the company's 100 per cent interest in the Gaupo-1 block to New Horizon Exploration T&T Unlimited for a cash consideration of US$2.8 million. The proceeds of the transaction will be used to reduce Trinity's senior secured debt facility.
The US$2.8 million consideration comprises a US$1.5 million deposit on the execution of the sales and purchase agreement–which has been received and is being held in escrow–with the remaining US$1.3 million payable on completion.
The transaction is subject to standard regulatory approvals, including final approval from Petrotrin and the Ministry of Energy and Energy Affairs and is conditional on approval by Trinity shareholders. As soon as practicable, Trinity intends to issue a shareholder circular and form of proxy to shareholders convening an extraordinary general meeting.
Block GU-1 includes 154 wells operated by Trinity of which nine are currently producing, an average of approximately 79 barrels of oil per day (bopd) year to date (2014 average: 121 bopd). The carried book value of the Block GU-1 asset as at July 31 was US$2.2 million.
Trinity CEO Joel "Monty" Pemberton, said: 'The formal sales process that Trinity entered into in April has illustrated that even in difficult markets Trinity's portfolio remains highly attractive. Trinity is continuing with the formal sales process, which remains competitive with discussions ongoing with several interested parties.
"The company looks forward to announcing additional news on the strategic review and formal sales process in due course.
The focus continues to increase operational efficiencies by optimising well performance and continuing cost efficiencies thereby ensuring the business remains sustainable and positioned for growth in a low price oil environment."
Yesterday's announcement comes on the heels of the decision of the company to lay off 22 employees "to ensure that the business remains sustainable, and can survive in a low oil price environment from a cash flow perspective."
Trinity said in a statement on the lay offs: "We have relentlessly demonstrated our commitment to the sustainable development of our local talent and resources, and this is why, even as a London listed publicly traded company, we ensured that 98 per cent of our staff were Trinbagonians. Our vision of building a world class hydrocarbon producer right here at home has always driven our decisions, and our focus on staff development remains an integral part of this."