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Monitor to Acquire up to 90% Stake Iin Onshore Trinidad Oilfields & Local Drilling Company.
Highlights:
Monitor signs HOA to acquire up to a 90% interest in three production licences in producing onshore oilfields in Trinidad;
Following the Acquisition Monitor will be a fully-funded oil production company with a significant daily production profile and identified exploration upside;
Independent experts Forrest A. Garb and Associates, Inc1 have assessed that the producing fields contain oil reserves of:
o Proved plus probable (2P) of 4.8 million barrels
o Undeveloped Prospective Resources of 19.9 million barrels;
Current production at the Project is approximately 700 bopd and, Monitor has a planned work programme to lift production to more than 3500 bopd;
Acquisition comes with established drilling inventory (9 rigs), personnel and operations all in place on site.
Australian-based oil and gas company Monitor Energy Limited (ASX: MHL) (“Monitor” or “the Company”) has entered into a binding Heads of Agreement (“HOA”) with SOCA Petroleum (“SOCA”) to acquire its rights for up to 90 per cent interest in a company whose wholly owned subsidiaries hold production licences for three blocks in producing onshore oilfields in Trinidad (see Figure 1) and a major local drilling company.
The production acreage and operating wells of the Project cover the Morne Diablo, Beach Marcelle and South Quarry oilfields, with the total acreage covering 13,253 gross acres on the southern coast onshore Trinidad. Current production from the fields is approximately 700 bopd, however Monitor considers that a minimal work program could lift production to more than 3500 bopd within 36 months based on known reserves. The production increase
excludes exploration upside with independently identified possible recoverable resource from the Herrera formation which is producing on adjacent blocks.
“This is truly a company making transaction, we are acquiring a controlling interest in a company that has not only a pure crude play in an established oil environment, but also one of five onshore drilling companies in Trinidad,” said Monitor Energy Managing Director, Jon Roestenburg. “There is significant potential for value enhancement, as we move from 1P to 2P and 3P, plus this is a relatively low risk exploration, drilling and production operation.”
“Onshore Trinidad is a low operating cost, high profit margin environment with oil production sold at the wellhead and transported to the Pointe-a-Pierre Refinery, which has capacity for all additional planned production,” he added.
1 Forrest A. Garb & Associates, Inc is an international petroleum consulting firm based in Dallas, Texas USA.
In addition to the onshore acreage the proposed acquisition also includes an interest in the parent of a wholly owned drilling company located in Trinidad, which owns five onshore drill rigs, three production rigs, one swab rig, full workshop and pipe yard and storage tanks and facilities – representing substantial current and replacement value.
Fellow ASX listed oil and gas company Range Resources Ltd (ASX: RRS) is joining Monitor in this venture and is progressing agreements to acquire the other 10 percent equity share of SOCA, as announced by Range on 12 July 2010.
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