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AIM-quoted Leni Gas & Oil plc (LSE:LGO) announced today it has signed a sale and purchase agreement to divest its assets in Spain for €8 million to an unnamed private buyer.
The transaction will be in cash and the buyer paid €200,000 non-refundable deposit to obtain exclusivity to complete the transaction by 27th July 2012.
“The sale of Spain provides LGO with a strong balance sheet and enables the Company to focus on significantly increasing its oil production in Trinidad which will now be the focus of operations,” said Neil Ritson, Chief Executive of LGO.
Leni expects to acquire 100% interest in the Gouldron Field, onshore Trinidad, after having signed a field reactivation contract back in 2009.
The Asset
The asset being sold off to the undisclosed buyer is the Ayoluengo acreage, which was acquired by Leni in 2007 for €2.6 million.
The field, first operated by Chevron in 1964, is the largest onshore oilfield in Spain producing 5,900 barrels of oil per day until it slowed down to about 2,500 bopd during the 1980s.
Leni currently produces 225 bopd from the said field, which has a P50 estimate of about 104 million barrels of untapped oil.
Eyes on Trinidad
The disposal follows the completion of the Incremental Product Service Contract to obtain full operatorship of the Goudron field in Trinidad, announced last week.
In a statement released on 10th July 2012, Leni said the company has completed the first five workovers on the Goudron Field and confirmed an average production potential of 10 bopd is achieavable for each of the wells.
“Proceeds from the transaction will be used in the Company’s existing operations, notably in Trinidad where an active work programme on the Goudron Field is now underway,” Leni said.
The transfer of 100% interest in the Goudron Field is now in its final arrangements following approval of the Trinidad and Tobago Ministry of Energy and Energy Affairs, Leni said last week.
The 11.4-square kilometre Goudron Field has proven reserves of 1.9 million barrels of oil with estimated 3P reserve of 21.8 mmbbls, giving a production potential in the range of 1,000 to 4,000 bopd.
“We are very excited to be able to participate in the vibrant onshore oil development activities in Trinidad to which LGO’s expertise and capital can be effectively applied,” Mr. Ritson closed.
Company Spotlight
Established in 2006, Leni Gas & Oil plc holds several assets in low risk regions, including the Gulf of Mexico, Malta, Hungary, and Trinidad, besides the now being disposed asset in Spain.
The company joined the Alternative Investment Market in 2007 raising £3.85 million during the initial public offering.
More than 30 million shares switched ownership at 10:30 AM GMT at a price of 0.87 pence a share, 12.3% higher than yesterday’s close of 0.78 pence, following the news.
