Last checked at 11 Dec 2012 07:00
11 December 2012
BAYFIELD ENERGY HOLDINGS PLC
Update on Operations, Reserves and Proposed Merger
Bayfield Energy Holdings plc ("Bayfield", the "Company" or the "Group"), (AIM Ticker Symbol: BEH), an upstream oil and gas exploration and production company with interests in the Republic of Trinidad & Tobago ("Trinidad") and South Africa, is pleased to provide updates on its operations in the Trintes field (65% working interest) offshore Trinidad, estimated reserves of oil and gas and on its proposed merger with Trinity Exploration & Production Limited ("Trinity"), announced on October 15, 2012.
Operations update
Production
Average gross oil production from Trintes for October and November was, respectively, 2,106 barrels of oil per day (bopd) and 2,164 bopd each of these figures successively representing records for average monthly production from the field during the period of Bayfield's operatorship. The most recent development side-track, well B1X, was completed in November and oil production from this well has stabilised at a rate of approximately 330 bopd. The field is currently producing at rates of approximately 2,450 bopd (gross). The Directors consider that continuing workover operations will result in an increase in gross production to approximately 2,600 bopd (gross) by the end of 2012.
Rowan Gorilla III
The Rowan Gorilla III rig was released by Niko Resources (Trinidad and Tobago) Limited ("Niko") in mid-November and the contract assigned by Bayfield and Niko to a third party operator in Trinidad for a period of at least six months. As a consequence, Bayfield will have no further liability under the rig contract except in relation to any future wells to be drilled at its option.
Reserves update
Bayfield is pleased to announce an updated evaluation of its reserves prepared by Gaffney, Cline & Associates as at June 30, 2012 which demonstrates an increase in net 2P reserves of 25% from 19.32 mmbbl at December 31, 2010 to 24.12 mmbbl at June 30, 2012, without deduction for production in the period. Full details are included in the table below.
Gross Field Oil Reserves (MMBbl) | Bayfield Net Entitlement Oil Reserves (MMBbl) | ||||||
Field and Area / Reservoir | Proved | Proved plus Probable | Proved plus Probable plus Probable | Proved | Proved plus Probable | Proved plus Probable plus Probable | |
Trintes Main Field | 9.85 | 22.77 | 25.05 | 6.40 | 14.80 | 16.28 | |
Trintes NE Extension M | - | 6.63 | 10.10 | - | 4.31 | 6.56 | |
Trintes NE Extension G | - | 2.19 | 5.53 | - | 1.42 | 3.59 | |
Trintes SW Extension M | - | 1.70 | 4.49 | - | 1.11 | 2.92 | |
Trintes Extension GAL-9 G and H | 0.60 | 2.10 | 4.48 | 0.39 | 1.36 | 2.91 | |
Trintes Extension GAL-12 H | 0.38 | 1.72 | 2.03 | 0.25 | 1.12 | 1.32 | |
Total | 10.83 | 37.11 | 51.68 | 7.04 | 24.12 | 33.58 | |
1. Gross Field Reserves are 100% of the volumes estimated to be economically recoverable from the field after 30th June, 2012 onwards.
2. "Trintes Field Main" includes Reserves from continued production plus Bayfield's work-over and side-track programmes
3. No gas Reserves are attributed to the Trintes Field
4. The reserves reported above are in accordance with definitions of the Petroleum Resources Management System document (approved in March 2007) of the Society of Petroleum Engineers/World Petroleum Council/American Association of Petroleum Geologists/Society of Petroleum Evaluation Engineers
Merger update
Significant progress has been made towards securing required approvals and consents and satisfying other conditions precedent in relation to Bayfield's previously announced proposed merger with Trinity. In particular, sought after confirmations and consents in respect of the proposed transaction have been secured from the Ministry of Energy and Energy Affairs in Trinidad and from the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin"), the state-owned oil company of Trinidad and Bayfield's partner in the Galeota Licence Area. The Directors expect the Admission Document to be published and posted to shareholders by February 2013 with the General Meeting to approve the merger to be held 14 clear days after publication.
As previously reported, it is the intention of the enlarged Group to raise additional debt and/or equity capital in conjunction with the merger In order to accelerate delivery of the significant upside that exists in the combined portfolios. Pending such fund raising exercise, the Boards of Bayfield and Trinity have approved, in principle, for a US$10 million secured loan to be made available by Trinity to Bayfield and to be available to be used for general working capital purposes. It is anticipated that loan documentation will be finalised to allow the funding to be drawn by Bayfield before the end of December.
Executive Chairman, Finian O'Sullivan, commented:
"Bayfield is delivering on the key performance metrics of reserve growth and increasing both production and operating cash flow. The demonstrated support of the Trinidad Ministry and Petrotrin for our merger plans with Trinity is evidence of their confidence in the ability of the enlarged group to continue on its path of achievement."
Ends.
For further information contact:
Bayfield Energy Holdings plc +44 (0) 20 7747 9200
Finian O'Sullivan, Chairman
Hywel John, Chief Executive
M:Communications
Patrick d'Ancona +44 (0) 20 7920 2347
Andrew Benbow +44 (0) 20 7920 2344
Seymour Pierce +44 (0) 20 7107 8000
Jonathan Wright/Stewart Dickson (Corporate Finance)
Richard Redmayne/Jeremy Stephenson (Corporate Broking)
FirstEnergy +44 (0) 20 7 448 0200
Hugh Sanderson/David van Erp (Corporate Finance)
In accordance with the AIM Rules - Note for Mining and Oil and Gas Companies, the information contained in this announcement has been reviewed by Brian Thurley, a geologist with over 38 years' experience who has a degree in Geology from the Royal School of Mines, Imperial College, London.