Columbus, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, provides the following update about the Beach Oilfield Limited ("BOLT") transaction and its aspirations for operations and exploration in the South West Peninsula of Trinidad ("SWP").

The Company has successfully restructured the BOLT transaction, on materially improved terms for the Company, and has entered into an Agreement for Lease with Singh's (Cedros) Estates Limited ("Singh Estates") to gain long term access to the South West Peninsula for oil and gas operations, including the Bonasse oilfield.

Leo Koot, Executive Chairman of Columbus, commented:
"Today's news is a major milestone for Columbus and further delivery of our strategy to build a core exploration, appraisal, development and potentially significant production hub in the South West Peninsula of Trinidad. We have successfully renegotiated the BOLT transaction on materially improved terms for the Company, we have entered into a new lease arrangement with the leaseholder, Singh Estates, and, most importantly, we have obtained 100% operational control over a large area (approximately 8,700 acres) in the South West Peninsula including mapped multiple prospects of 20-400 million barrels in place, which we intend on exploring, in addition to reactivating and maximising production from the Bonasse oilfield which is currently producing at a very low level.   In line with our ongoing focus on capital discipline, the payments due under the renegotiated BOLT transaction and new lease arrangement are fully funded from existing cash resources and are included in the Company's 2018 Budget.  

The changes to the over-riding royalty rates we have agreed, as well as the timing of their introduction and annual caps on those rates, means that a successful commercial development of the SWP following any exploration/appraisal success is now far more likely and will now be undertaken in a manner which works to the benefit of all interested stakeholders.  Our fully funded 2018 work programme in the SWP includes commencing a well reactivation programme in Q2 2018 on the Bonasse field, alongside undertaking further analysis of the good quality 3D seismic and other data, with the first well potentially being drilled, subject to satisfactory technical analysis, in the first half of 2019.  

I would like to thank BOLT and Singh Estates for their willingness to negotiate a deal that we believe offers the best chance for all parties to benefit from a revived and rejuvenated campaign on the SWP.   We look forward to working with Singh Estates, the Ministry of Energy and Energy Industries and other stakeholders to fully explore and develop the SWP.  This is a very exciting time for the Company and all involved and provides a unique opportunity to potentially deliver transformational growth of our business to the benefit of our shareholders and Trinidad & Tobago." 

Background

In 2015, Columbus and its local subsidiary, Leni Trinidad Limited ("LTL"), entered into the initial agreement with BOLT for the purchase of the "deep rights" held by BOLT in the SWP (oil and gas that lay below 7,000 feet). This included LTL purchasing a 25% equity interest in BOLT at that time.

In January 2017, the relevant parties amended the terms of the BOLT transaction.  It envisaged that LTL would acquire the remaining 75% of the shareholding in BOLT in return for: (i) a payment of US$50,000 to the shareholder of BOLT; (ii) Columbus making other payments to third parties of approximately US$134,000; and (iii) the adoption by Columbus of a loan held by BOLT of approximately US$1.1 million.

The rationale for acquiring BOLT was that BOLT was the lessee under a lease with Singh's (Cedros) Estates Limited (the "Existing Lease").  The Existing Lease provided BOLT with access to the petroleum underlying the leased lands on the SWP covering approximately 3,300 acres.