LONDON (Alliance News) - Leni Gas & Oil PLC Wednesday said it has signed a deal to acquire Fram Exploration Ltd, which holds the Trinity-Inniss Field near LGO's Goudron Field in Trinidad, for a cash payment of USD5 million.
The oil and gas exploration and development company said the field covers an area of 810 acres and is roughly 20 kilometres from the Goudron Field. Its existing production averages between 140 and 150 barrels of oil per day from roughly 25 active wells.
The company said Trinity-Inniss Field production comes from the Herrera sandstones at depths between 1,500 and 5,000 feet, and there is an existing agreement allowing for the drilling of 12 new wells and 50 sidetracks or replacement wells.
LGO said it has identified roughly 20 well reactivation targets and there is considerable infill drilling potential within the Field area.
The stock tank oil originally in place at the new field has been estimated at 68 million barrels with a possible upside of 200 million barrels.
"This transaction will, subject to the conditions being satisfied, add approximately 150 barrels of oil per day to LGO Trinidad's current production and we see many similarities between Goudron and Trinity-Inniss, and the scope for rapid production improvements," Chief Executive Neil Ritson said in a statement.
LGO said the acquisition is subject to a number of conditions and if it falls through by September 27 due to LGO acting without cause, it will have to pay a USD250,000 break-fee.
The company is currently developing the Goudron Field nearby and has recently started drilling the GY-667 well, which is the fourth of a new development plan on site, after the first three found oil and the first well reached a stabilised production rate of 240 barrels of oil per day in early June.
Leni Gas & Oil shares were up 3.2% to 3.77 pence on Wednesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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