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Columbus Energy Res (CERP)

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Wednesday 29 August, 2018

Columbus Energy Res

Petrotin Restructuring

RNS Number : 1275Z
Columbus Energy Resources PLC
29 August 2018
 

 

29 August 2018

For Immediate Release

COLUMBUS ENERGY RESOURCES PLC

("Columbus" or the "Company")

Petrotrin Restructuring

Columbus, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, provides the following update about the restructuring of the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin") which was announced on 28 August 2018, which Columbus believes will have no negative impact on its Goudron operations.

The planned restructuring of Petrotrin's operations include the announced future closure of their oil-refinery operations at Point-a-Pierre and a restructuring of their exploration and production business and it is planned that the transition to this new model will begin in October 2018The restructuring plan is geared towards curtailing losses at the State-owned oil company and steering it on a path towards sustainable profitability.  As Petrotrin exits the oil refining business, it intends to re-design its exploration and production operations.  It is proposed that refining of oil will be phased out as the re-structuring plan is rolled out, with all of the Company's oil eventually to be exported for processing at other international facilities.     

 

At present Columbus sells oil produced from its Goudron operations directly to Petrotrin "at the Goudron site gate" via marketing arrangements associated with the Incremental Production Service Contract between Columbus and Petrotrin.  Columbus believes that the proposed changes will have no impact on its Goudron operations as the marketing arrangements will not change and the Company does not interact directly with the refinery.   Columbus currently receives an oil price, as calculated by Petrotrin on a monthly basis, after taking account of various factors, including refining and other costs, with the oil price received by Columbus from Petrotrin tending to range at a discount to WTI (West Texas Intermediate) of between 4-6%.   The Company will continue to sell production to Petrotrin under the existing contracts, however, rather than selling to the refinery, Petrotrin will export the product at world pricing.  This could possibly benefit Columbus in the future as the Company does not currently receive any premium to the oil price it receives from Petrotrin, despite the fact Goudron oil has an API of approximately 38 API, which places it at a higher value than average Trinidad crude oil.     

 

Columbus recognizes that Petrotrin has to be structured for profitability and the losses currently being seen at the refinery are un-sustainable into the future.  The Company believes that the decisions announced yesterday will benefit Trinidad and Tobago in the long term, whilst recognizing that this will cause difficulties for many Petrotrin employees in the short-medium term.   It is in everyone's interests that Trinidad has a strong and viable oil and gas industry which will enhance the living standards of the people of Trinidad and Tobago.

 

Petrotrin has also indicated that they will be meeting with all stakeholders before the transition commences in October and Columbus looks forward to taking an active part in such meetings. 

 

Leo Koot, Executive Chairman of Columbus, commented:

"Yesterday's announcement is a big step by Petrotrin to create a strong and economically viable exploration and production business to the benefit of the people of Trinidad and Tobago.  We applaud their commercial strategy and are satisfied that the proposed closure of the Point-a-Pierre refinery will have no negative impact on our Goudron operations and potentially benefit Columbus into the future, if we are able to obtain a higher oil price due to the high quality of our Goudron oil.  We have regular meetings with senior Petrotrin representatives and intend to continue to work closely with Petrotrin in the months ahead as they undertake their changes."   

Contact Information

Columbus Energy Resources plc

Leo Koot / Gordon Stein

+44 (0)20 3794 9230

VSA Capital Limited

Financial Adviser and Broker

Andrew Monk / Andrew Raca / Justin McKeegan

+44 (0)20 3005 5000

Beaumont Cornish Limited

Nominated Adviser

Roland Cornish / Rosalind Hill Abrahams

+44 (0)20 7628 3396

Camarco

Public and Investor Relations

Georgia Edmonds / James Crothers

+44 (0)20 3757 4983

 

Notes to Editors:

Columbus Energy Resources Plc is an oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America. Initially focussed on maximising production from its core Goudron field asset, Columbus is cashflow positive and aims to create transformational growth by developing its exploration targets across its dominant portfolio position in the South West Peninsula ("SWP"), a prolific region which lies in the extreme southwest of Trinidad and consists of stacked shallow and deep prospects, in a capital efficient and disciplined manner.  

Columbus is guided by the following core values; safe and sustainable, stronger together, creative excellence, positive energy, totally trusted and personally responsible.

The Company is led by an experienced Board and senior management team with supportive shareholders and intends on leveraging its expertise and experience to build an attractive and diversified portfolio of assets across South America in order to build an oil production led South American exploration business.  

The Board and management are 100% aligned with shareholders and each of the Executive Directors and Executive Management members continue to receive 50% of their salaries in Company shares and will do, for the foreseeable future.

To find out more, visit www.columbus-erp.com or follow us on Twitter @Columbus_ERP .

 

 


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