Trinity, an independent E&P company focused on Trinidad and Tobago, today announces that as part of the ongoing review process it is divesting a non-core asset. Oilbelt Services Limited (“Oilbelt”), a fully owned subsidiary of Trinity, has signed a Sale and Purchase Agreement (“SPA”) to sell the Company’s 100% interest in the Gaupo-1 block (“Block GU-1”) to New Horizon Exploration Trinidad and Tobago Unlimited (“New Horizon”) for a cash consideration of US$2.8 million. The proceeds of the transaction will be utilised 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 SPA (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 the Petroleum Company of Trinidad and Tobago Limited (“Petrotrin”) and the Ministry of Energy and Energy Affairs (“MOEEA”).
The proposed transaction is conditional on approval by Trinity Shareholders. Accordingly, as soon as practicable, Trinity intends to issue a shareholder circular and form of proxy to shareholders convening an extraordinary general meeting (“EGM”).
Block GU-1 includes 154 wells operated by Trinity of which 9 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 31 July 2015 was US$2.2 million.
Joel “Monty” Pemberton, Chief Executive Officer of Trinity, commented:
“The formal sales process (“FSP”) that Trinity entered into in April has illustrated that even in difficult markets Trinity’s portfolio remains highly attractive. Trinity is continuing with the FSP process, which remains competitive with discussions ongoing with several interested parties. The company looks forward to announcing additional news on the strategic review and FSP 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.”
Further information:
The licence subject to the transaction is summarised in the table below:
| Asset | Operator | Interest | Licence type |
| Guapo-1 | Trinity | 100% | Lease Operatorship Agreement |
The transaction is being structured as an asset sale.
Trinity’s estimated 2P reserves for Block GU-1 was 1.1 mmbbls at 31st December 2014, and in H1 2015 these assets produced an average of 81 bopd (2014 average: 121 bopd).
The effective date of the transaction will be the same as the completion date. The transaction is expected to complete in the fourth quarter of 2015, and is subject to the aforementioned regulatory approvals.
Competent Person’s Statement:
The information contained in this announcement has been reviewed and approved by Craig McCallum, Chief Operating Officer and Director for Trinity Exploration and Production plc, who has over 25 years of relevant experience in the oil industry. Mr. McCallum holds a Master degree in Petroleum Engineering.