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Columbus Energy Resources PLC

Columbus Energy achieves production target for 2018 exit

"All of our activities in Q4 2018 were undertaken at a time when Trinidad was witnessing the worst weather conditions in many years with record rainfall and resultant floods which impacted the lives of many"

oil and gas operations
Production peaked at 1,021 bopd in late December

Columbus Energy Resources PLC (LON:CERP) confirmed that it achieved the targeted end-of-year peak production rate of 1,000 barrels of oil per day, with the help of the asset acquisition.

The Trinidad-focused company, in a statement, said that output hit 1,021 bopd in late December while the average rate for the fourth quarter amounted to 670 bopd.

It noted that the average rate was held back by the impact of extreme weather conditions - record rainfall and extensive flooding – during the period, which it said “severely hampered” operations and well programmes.

Nonetheless, it still achieved certain project milestones during the quarter – with the successful Snowcap-1 & Snowcap-2 appraisal wells on the Cory Moruga block, which subsequently added 70 bopd of production.

READ: Columbus Energy Resources shares tipped to soar

The company said that it had US$3.23mln of gross revenue in the fourth quarter, the average oil sales price was US$57.58 per barrel and it generated some US$0.37mln of cashflow after the costs of field maintenance and well workovers.

It raised £2.5mln of new capital, repaid US$1.25mln of debt and ended the quarter with a US$2.6mln cash balance. Debt stood at US$400,000 at 31 December 2018.

During the period, the company completed the Steeldrum acquisition which then had an effective date of 13 July, and, it also completed the acquisition of a 50% stake in the Icacos field.

Columbus told investors that it continues to pursue mergers and acquisition opportunities in Trinidad and South America, which are value accretive. Several formal proposals are under consideration by the relevant parties, it added.

"The past three months have been very challenging as we sought to complete the integration of the Steeldrum and Columbus teams in Trinidad into one effective unit, whilst also striving to grow production across our expanded portfolio,” said Leo Koot, Columbus chairman.

“With the recent appraisal of the Snowcap field and the transfer of operating management of Icacos, Columbus is now operating six fields onshore Trinidad. 

“This provides us with many competing options to increase operational cashflow and also reduces our reliance on just one or two fields for our cashflow streams.”  

"All of our activities in Q4 2018 were undertaken at a time when Trinidad was witnessing the worst weather conditions in many years with record rainfall and resultant floods which impacted the lives of many. 

“These conditions severely hampered our operations on a number of occasions, in particular gaining access to our wells which needed operational support to maintain production.”

Koot added: "I am therefore delighted to report that, despite these challenges, we successfully achieved our year-end target of 1,000 bopd of peak production, with all six fields in Trinidad contributing growing volumes of oil for sale. Achieving a peak of 1,021 bopd was an excellent achievement.”

In a note to clients, analysts at VSA Capital said: "We believe that at the current share price CERP’s production potential, exploration upside and capital discipline is simply not reflected and continue to see significant upside potential."

VSA reiterated a 'buy' recommendation and 21.4p target price on Columbus Energy shares which in late afternoon trading were changing hands at 2.77p, down 9% on Tuesday's close.
 
 -- Adds analyst comment, share price -- 

Quick facts: Columbus Energy Resources PLC

Price: £0.04

Market: AIM
Market Cap: £36.56 m
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