RE: New Q&A29 Aug 2018 15:41
What are the realistic chances of success in the SWP?
One of the reasons that Leo joined Columbus was because he was excited by the opportunity for exploration in the South West Peninsula. He believes that the assets we have there are the type of assets found in a major oil company’s portfolio given the potential resource size.
The assets in the SWP are near to, and geologically a part of, the prolific East Venezuelan Basin, offering significant exploration, development and production optionality and the assets have the potential to deliver transformational growth.
From an exploration perspective it ticks many of the boxes given its proximity to a proven oil play and is located in a well-established oil province with easy access to export for any successful development project. It offers, from an onshore location, large scale, exploration potential that would typically be seen offshore where the drilling costs would normally be 3-5 times that of Columbus’ onshore exploration wells. In addition, the SWP is relatively shallow, keeping exploration and development well costs down.
All these reasons make us believe that this is a relatively low risk play in exploration terms, improving the chance of success on what would certainly be a material play in worldwide oil terms.
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Is Spain a millstone and does the company genuinely hope to gain a new licence or is it looking for an exit strategy at minimum cost to the company?
Trinidad is our core area and focus but Spain still provides potential upside. We hope to apply for the new license for Spain as soon as possible, either on our own or with a partner, and are awaiting the instigation of the tender process by the Spanish authorities. In the meantime, we continue to keep our costs in Spain as low as possible. In the event we are unsuccessful in the tender, we will continue to execute our growth strategy in South America.
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