LONDON (Alliance News) - Oil and gas company LGO Energy PLC on Thursday said the reduction in overriding royalty rates for the Goudron Field has now come into force.
LGO said the new royalty rates for Petroleum Co of Trinidad & Tobago Ltd, which will apply to production at oil prices below USD50 per barrel, will see its royalty rate fall around 40% to rates below 10%. It didn't state it current royalty rate.
The new rate will apply to sales made after February 1, 2016.
This will deliver a net revenue benefit for LGO's Goudron E&P Ltd subsdiary which will increase as production rises.
"We are delighted that the mutual benefits of encouraging investment by reducing royalty rates at this time of lower oil prices have been recognized. LGO has responded by increasing the level of ongoing investment, as recently reported, and this will be good for the company, its investors and for Trinidad generally," said Neil Ritson, LGO's chief executive.
LGO shares were up 4.4% to 0.266 pence Thursday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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