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Monitor acquiring up to 90% interest in Trinidad licenses
(7/29/2010 - OGI: Perth) Monitor Energy has concluded a heads of agreement for the acquisition of up to 90% interest in three production licenses onshore Trinidad via the acquisition of SOCA Petroleum.
The company said today that it is acquiring the stake in SOCA Petroleum, whose wholly owned subsidiaries hold the production licenses for three blocks in producing onshore oilfields in Trinidad as well as a major local drilling company.
The production acreage and operating wells of the project cover the Morne Diablo, Beach Marcelle, and South Quarry oilfields, with the total acreage covering 13,253 gross acres on the southern coast onshore Trinidad. Current production from the fields is approximately 700 b/d of oil, however Monitor considers that a minimal work program could lift production to more than 3,500 b/d within 36 months based on known reserves. The production increase excludes exploration upside with independently identified possible recoverable resource from the Herrera formation which is producing on adjacent blocks.
"This is truly a company making transaction. We are acquiring a controlling interest in a company that has not only a pure crude play in an established oil environment, but also one of five onshore drilling companies in Trinidad," said Monitor's managing director, Jon Roestenburg. "There is significant potential for value enhancement, as we move from 1P to 2P and 3P, plus this is a relatively low risk exploration, drilling, and production operation. Onshore Trinidad is a low operating cost, high profit margin environment with oil production sold at the wellhead and transported to the Pointe-a-Pierre Refinery, which has capacity for all additional planned production."
In addition to the onshore acreage the proposed acquisition also includes an interest in the parent of a wholly owned drilling company located in Trinidad, which owns five onshore drill rigs, three production rigs, one swab rig, full workshop and pipe yard, and storage tanks and facilities - representing substantial current and replacement value.
Range Resources is joining Monitor in this venture and is progressing agreements to acquire the other 10% share of SOCA, as announced by Range on 12 July.
Monitor will use a combination of scrip and cash to purchase up to 90% interest in SOCA Petroleum whose wholly owned subsidiary companies own the project and all associated assets. Under the terms of the HOA, the company will issue two billion Monitor shares and make cash payment of US$59 million in consideration for the full 90% interest. In addition there are two milestone performance payments of 500 million shares, if the company achieves future production targets on the project.
Click here for earlier report.
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