RE: UKIS1 Apr 2019 17:31
Harsh commodity conditions have seen Columbus Energy (LSE:CERP) fall from 6p to 2.9p over the last 12 months. This comes despite the Trinidad-focused firm enjoying rapid production and M&A progress over the period. This year will see Columbus build on its growth by developing a portfolio of assets that neighbour the world’s largest hydrocarbon basin. Here, executive chairman and industry veteran Leo Koot talks through the next steps in
to turn Columbus into a major energy player.
Blockbuster draw
Koot joined Columbus in May 2017 when it was called LGO. He was tasked with reviewing operations to increase production and cash flow after a difficult period. He came on board with decades of experience in the oil and gas industry. This included senior stints overseas at large organisations like MENA Gulf Investment Partners. He was also president of the Abu Dhabi National Energy Company (TAQA Iraq).
More recently, Koot has spent time working in the UK. Notably, he headed up the UK branch of TAQA, which he developed into a several-thousand-employee operation overseeing 60,000bopd of production and $1.7bn of annual turnover.
After spending so long at multi-national and state-backed enterprises, Koot decided it was time to try out the smaller end of the market. He says the opportunity for blockbuster returns was what attracted him to AIM:
‘I have worked at big companies where you can turn something from big to very big. This means you get double or triple your money over three-to-five years. On AIM, a company like Columbus can achieve much greater return multiples than this. For example, since I have been at the firm its market cap has risen from £11m to as much as £30m. Its size has increased threefold despite large amounts of growth potential remaining.’
Trinidad focus
Columbus’s assets are found in the south-west and south of Trinidad. The developing hydrocarbon region was boosted recently when its state-backed petroleum entity Petrotrin completed a restructure. Notably, it closed its local oil-refinery operations, allowing Columbus to export its oil directly into global markets. This should improve its pricing position.
The enterprise also thinned out its local exploration and production business. Columbus says this increases the availability of skilled local workers. It also expects the move to heighten Trinidad’s reliance on international players like Columbus.
Arguably, the organisation’s most exciting opportunity is its onshore position in Trinidad’s South West Peninsula (SWP). The SWP is close to, and geologically part of, the East Venezuelan Basin. This is the largest hydrocarbon basin in the world. Koot says the opportunity to access the Basin’s offshore-scale potential from an onshore location drew him to Columbus:
‘Trinidad has been producing for a long time. However, the SWP has not. This is because landowners rather than the state own its mineral rights. Oil co
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