Sign up United Kingdom
Proactive Investors - Run By Investors For Investors

Columbus Energy broadens footprint in Trindad with Steeldrum acquisition

Steeldrum is currently producing at a rate of 200-250 barrels of oil daily
oil barrels
Steeldrum is producing 200-250 barrels per day

Columbus Energy Resources PLC (LON:CERP) has expanded its footprint in southern Trinidad with the acquisition of Steeldrum for £4.4mln in shares.

Steeldrum is currently producing at a rate of 200-250 barrels oil daily and has reserves of 5.6mln barrels at the Innis-Trinity and South Erin fields and 1.1mln within the Cory Moruga development project.

READ: Columbus Energy shares tipped to soar

Columbus will also get access to two rigs, which can be used to explore its other assets in Trinidad’s South-West Peninsula.

Leo Koot, Columbus’s executive chairman, said Steeldrum’s addition gives it a large well-balanced portfolio of assets strung across the south and south-west of Trinidad.

A US$3.25mln convertible loan facility has been set up with finance group Lind to cover unforeseen integration costs.

Columbus’s own production averaged 553 barrels per day over the quarter to June, with a peak of 648 barrels. The company was cashflow positive during the three months with gross revenues of US$3.01mln and a US$0.94mln operating netback.

Koot said it is addressing sand production issues at the Goudron and still expects output from the field to reach 1,000 barrels a day during the remainder of the year.

Oil should also start to flow from the Bonasse field over the second half with a workover rig on stream from next week. Testing is scheduled to start at the recently acquired Icacos Field.

 “We would hope to see gross production across all of our fields grow continually throughout 2H 2018 and continue to grow well beyond that,” said Koot.

VSA maintains punchy target

Broker VSA added that Columbus now has rising production from Goudron and BOLT as well as potential additional production from onshore Trinidad properties alongside the considerable exploration potential at the South West Peninsula.

The total potential value of the consideration is £5.8m, which is expected to be signed off in the fourth quarter, is close to US$1.38/bbl which appears attractive, said the broker.

"The full issue would give the vendors, who have significant expertise in the oil and gas industry, 18% of the enlarged share capital of the company which we believe will align their interests with existing shareholders, enabling CERP to pay a lower up-front fee."

VSA repeated its punchy share price target of 25p, which compares to a price today of 5.05p up 9%.

The broker also points out that the Lind convertible loan facility converts at 8.1p per share compared to a 3p conversion price for a previous facility set up in 2016.

View full CERP profile View Profile

Columbus Energy Resources PLC Timeline

Related Articles

oil barrels
April 26 2018
If the appraisal well is successful it could potentially be brought online as part of an early production scheme
oil and gas operations
August 02 2018
The agreement includes up to US$35mln in costs regarding the development of Aminex’s remaining 25% interest in the Ruvuma PSA, which would include the Ntorya project
oil and gas operations
April 19 2018
The first two potential new wells will be drilled in around 45 days, and investors will be keen to see the results

No investment advice

The Company is a publisher. You understand and agree that no content published on the Site constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable or advisable for any specific person. You further understand that none of the information providers or their affiliates will advise you personally concerning the nature, potential, advisability, value or suitability of any particular security, portfolio of securities, transaction, investment strategy, or other matter.

You understand that the Site may contain opinions from time to time with regard to securities mentioned in other products, including company related products, and that those opinions may be different from those obtained by using another product related to the Company. You understand and agree that contributors may write about securities in which they or their firms have a position, and that they may trade such securities for their own account. In cases where the position is held at the time of publication and such position is known to the Company, appropriate disclosure is made. However, you understand and agree that at the time of any transaction that you make, one or more contributors may have a position in the securities written about. You understand that price and other data is supplied by sources believed to be reliable, that the calculations herein are made using such data, and that neither such data nor such calculations are guaranteed by these sources, the Company, the information providers or any other person or entity, and may not be complete or accurate.

From time to time, reference may be made in our marketing materials to prior articles and opinions we have published. These references may be selective, may reference only a portion of an article or recommendation, and are likely not to be current. As markets change continuously, previously published information and data may not be current and should not be relied upon.

© Proactive Investors 2018

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use