TIDMLGO
RNS Number : 9365W
LGO Energy PLC
15 February 2017
For Immediate Release
15 February 2017
LGO ENERGY PLC
("LGO" or the "Company")
Notice of General Meeting
LGO has today posted to Shareholders a circular, notice and
related documents ("the Documents") convening a General Meeting of
the Company to be held at 200 Strand, London, WC2R 1DJ on Tuesday 7
March 2017 at 10.30 am. The Documents are available on the
Company's website www.lgo-energy.com and copies of the Document
will be available free of charge during normal business hours on
any weekday (except public holidays) from the registered office of
the Company at Suite 4B, Princes House, 38 Jermyn Street, London
SW1Y 6DN from the date of this announcement until the date of the
General Meeting.
The meeting has been called to seek Shareholder approval for (i)
a capital reorganisation (share consolidation), (ii) electronic
communication with shareholders, and (iii) authority for the
allotment of shares. A letter from the Chairman extracted from the
circular and outlining the background behind the resolutions is
attached in
Appendix II below. Details of the resolutions can be found on the Company's website.
Neil Ritson, LGO's Executive Chairman, commented:
"Having completed the refinancing in December 2016, the Company
is now able to return to growing the value of the business. There
is also an opportunity to deal with administrative corporate
matters, to streamline how the Company communicates with its
Shareholders and to align the Company with best practice amongst
our peers."
Enquiries:
LGO Energy plc +44 (0) 203 794 9230
Neil Ritson
James Thadchanamoorthy
Beaumont Cornish Limited +44 (0) 20 7628 3396
Nomad and Joint Broker
Roland Cornish
Rosalind Hill Abrahams
FirstEnergy Capital LLP +44 (0) 20 7448 0200
Joint Broker
Jonathan Wright
David van Erp
Appendix I
Expected Timetable of events
Publication of this document 15 February 2017
and posting to Shareholders
Latest time and date 10:30 a.m. on 3 March
for receipt of Forms 2017
of Proxy
General Meeting 10:30 a.m. on 7 March
2017
Appendix II
Letter from the Chairman of the Company
I am writing to invite you to a General Meeting of the Company
to be held at 10:30am on 7(th) March 2017 at 200 Strand, London
WC2R 1DJ. The formal notice of the General Meeting is at the end of
this Document.
The purpose of this Document is to provide Shareholders with
details of the authorities sought at the General Meeting and to
explain why the Directors are recommending to Shareholders to vote
in favour of the resolutions to be proposed at the General
Meeting.
There is little doubt that the oil and gas sector has been hard
hit in recent years, by the major fall in oil prices and increased
volatility in the commodity markets. Whilst there has been a
gradual recovery in prices during the second half of 2016 and a
stabilisation since OPEC reached agreement on medium-term quotas,
oil prices today are about half of what they were in 2014.
In addition to operating under these conditions, LGO has had an
especially difficult 15 month period due to the specific
circumstances surrounding its 2015 loan facility and the loss of
well GY-678 in October 2015. Notwithstanding the significant
challenges faced by the Company, the Board believes a fundamental
turnaround has been achieved in which the Company's reputation and
licence to operate in Trinidad has been preserved. By repaying its
senior debt to BNP Paribas and paying its trade creditors in
Trinidad, the Board believes that LGO has shown it has quality
assets and a dedicated management team.
Having refinanced its 2015 debt position into an affordable,
sustainable facility, LGO is now able to look to the future. Its
core assets at the Goudron Field and South West Peninsula in
Trinidad provides a sustainable foundation for the portfolio as
well as exciting high value growth options, subject to funding. The
Goudron Field is profitable at significantly lower oil prices than
are being realised at present and will benefit from rising oil
prices.
The Board remains fully committed to a return to our original
ambition of growth of shareholder value and is convinced that the
current strategy will deliver the desired recovery and growth of
the Company. LGO has a bright future and we encourage the Company's
shareholders to support the resolutions and to actively engage with
the Board's plans to develop the Company to be a significant
onshore production company operating in Trinidad.
1 Corporate and Operational Update
Background to the resolutions
In March 2015, LGO secured a senior lending facility from BNP
Paribas ("BNPP") in the form of a pre-paid swap and drew down
approximately US$11.8 million to fund the drilling of 7 development
wells to the deeper C-sand reservoir in the Goudron Field in
Trinidad.
As you may already be aware in October 2015 LGO's subsidiary in
Trinidad, Goudron E&P Limited, suffered a significant operating
issue with well GY-678 in the Goudron Field. Well GY-678 was the
last of the planned 15 well C-sand drilling campaign, and the
seventh well being funded by the BNPP facility. The loss of that
well and the downhole equipment, combined with a steep drop in oil
price, had immediate dramatic impacts on the Company.
As a consequence of the GY-678 incident, and exacerbated by the
low and falling oil price, the covenants on the BNPP facility,
principally relating to liquidity, were breached and BNPP moved to
restrict access to the Company's accounts holding funds already
drawn against the facility to pay for the drilling programme. All
payments for capital and creditors from those accounts were
immediately halted by the bank. As a result, the Company had to
deploy capital available from across the LGO Group, and new shares
in the Company were issued, where possible, to reduce and pay
creditor liabilities and to fund some low cost production
enhancement work at the Goudron Field.
During 2016, as a result of these capital constraints, the
production at the Goudron Field declined from late 2015 levels, but
was maintained through carefully selected recompletions, at an
average level of 425 barrels oil per day for the year to 31
December 2016. Goudron is a low cost onshore operation and has the
additional advantage of reduced royalty payments as oil prices
fall. As a consequence Goudron remains profitable at current
production rates even at oil prices below US$25 per barrel.
By December 2016 LGO had progressively reduced the balance
outstanding to BNPP to approximately US$3 million and was able to
refinance the remainder of the facility with a new funding facility
("Funding Agreement") by Lind. The repayment of the BNPP Facility
allowed GEPL to access funds in Trinidadian dollars that had been
restricted by BNPP during the default period. GEPL deployed these
funds to complete the payment of all creditors in Trinidad and to
initiate the delayed drilling of infill production wells in the
Mayaro Sandstone formation of the Goudron Field.
The first tranche ("First Tranche") funding of US$1.825 million
from Lind is for a 24 month period during which LGO can, at its
election, repay at a monthly rate of US$94,500 in cash or by
issuing shares at the prevailing market price on each monthly
payment date, though to date, LGO has elected to pay cash using
internally generated cash flows. Lind has the right to convert the
outstanding balance into equity at a price of 0.15p. Lind also has
the right, at their election, to increase the funding by US$750,000
during the term of the First Tranche. Any subsequent draw down, to
a maximum aggregate total of US$8.6 million over the life of the
Funding Agreement, is by mutual agreement of the parties. In turn,
LGO has the right to buy-back the balance owed on the Funding
Agreement at any time on agreed terms.
The Funding Agreement with Lind includes provisions to grant
options to Lind to subscribe for ordinary shares in the Company and
allow the conversion of the balance of the facility to equity at a
fixed price of 0.15 pence per share. At the date when the Funding
Agreement was put in place, LGO was not in a position to issue all
the shares required without further shareholder approval. Therefore
it was agreed between the Company and Lind to defer the issue of a
portion of the options granted and also limit the conversion rights
of the facility until such time as LGO, through a General Meeting,
could complete its contractual obligations to issue shares under
the Funding Agreement with the approval of shareholders.
To comply with the terms of the Funding Agreement, options for a
further 83.26 million ordinary shares are required to be granted in
the first quarter of 2017 (based on the Company's current issued
share capital) and shareholder authorities maintained to cover the
possible conversion of the balance of the facility, which requires
approximately 1,097 million shares. The shareholder authorities
sought at the General Meeting includes these obligations.
Trinidad
The 15 well C-sand program, conducted in two campaigns in 2014
and 2015, was in part designed to provide the necessary information
for the design of an enhanced oil recovery ("EOR") scheme. That
data has been synthesised and interpreted with all other field data
and is at the heart of an application to the Ministry of Energy and
Energy Industries ("MEEI") in Trinidad to conduct a waterflood EOR
pilot scheme in the C-sands at Goudron using available produced
water and up to 8 existing wells. That application is being
finalised and will be progressed expeditiously during 2017. There
are several successful local analogue projects such as at the Beach
Marcelle and the Navette Fields and LGO is confident that a
waterflood EOR scheme at Goudron offers considerable potential.
That potential is best established first through a low cost pilot
before embarking on a larger scheme.
In June 2016 Deloitte LLP's reserves audit team in Calgary
reviewed the reserves and resources data for the Goudron Field and
reported increases in all categories from proven reserves, through
probable and possible reserves to contingent resources, and the oil
in place. Based on the additional drilling and production since the
previous LR Senergy report in June 2015, Deloitte's reserves
auditors identified proved (1P) gross oil reserves in the Mayaro
Sandstone and C-sand reservoirs of 1.6 million barrels ("mmbbls"),
an increase of 3% compared to the June 2015 resource report
conducted by LR Senergy. The gross proven and probable reserves
(2P) increased by 4% to 11.8 mmbbls. Proved, probable and possible
reserves (3P) increased by 9% to 25.6 mmbbls.
The first resource report commissioned by LGO prior to acquiring
the field in 2012 estimated gross upside (3C) contingent resources
of 63.2 mmbbls, related to a future waterflood EOR scheme. The 2015
report by LR Senergy did not consider contingent resources,
however, the 2016 Deloitte report includes an estimate of gross 3C
resources of 63.4 mmbbls, which is very close to the 2012
estimate.
The oil in place within the Goudron Field estimated by Deloitte
using all available data, including the 15 new wells, also rose
relative to the LR Senergy estimate by over 20%. Estimated oil
originally in place ("STOIIP") within the Goudron Field is now
reported to be up to 975 mmbbls, with a most likely (P50) estimate
of 555 mmbbls.
Consent has been granted by the Trinidadian Environmental
Management Agency for a further 45 wells at the Goudron Field. A
programme of approximately 20 new wells targeting infill locations
in the Mayaro Sandstone reservoir are planned to a maximum depth of
approximately 1,900 feet. The wells are estimated to cost
US$500,000 per completed well, with initial production targets
conservatively set at an average of 45 barrels of oil per day
("bopd") per well, although some wells are predicted to have higher
production capacity based on the large body of historic data.
In December 2016 GEPL contracted the services of Sadhna
Petroleum Services Company Limited ("Sadhna") to conduct the
initial two wells of the Mayaro Sandstone infill programme on a
turnkey basis. Sadhna will deploy a newly built Chinese rig, Range
Drilling Rig#18, to carry out the work which will be supervised by
a team from LGO and Bedrock Drilling Limited. These two wells will
be funded out of existing cash resources.
At the time of writing all permissions have been obtained and
well site preparation has started on the drilling sites for the
first two Mayaro Sandstone infill wells. Drilling will commence as
soon as practical once the site preparation is complete. Sites for
a further 8 wells have been selected for possible drilling in 2017,
but will depend on available funding.
Elsewhere in Trinidad, LGO has developed a dominant lease
position in the South West Peninsula ("SWP"), an area of
underexplored land adjacent in the highly prolific East Venezuelan
Basin with contiguous hydrocarbon geology to that found in nearby
Venezuela. LGO, through its wholly owned subsidiary Leni Trinidad
Limited ("LTL"), holds exclusive rights to approximately 11,000
gross acres of prospective petroleum rights, including the shallow
Bonasse and Icacos oil fields.
LTL holds all relevant exploration data in the SWP and has
acquired, with Beach Oil Field Limited ("BOLT"), a proprietary soil
geochemical survey and, in collaboration with the MEEI, a high
resolution airborne gravity and magnetic dataset. The data and the
lease position when taken together give LTL a significant
competitive advantage in this underexplored region, where only one
deep well, FRM-1, has been drilled and shallow oil fields have been
discovered. This single deep well was drilled in 2008 to a depth of
approximately 11,700 feet and discovered oil in the Lower Cruse
formation before being abandoned following an accident.
LTL recently signed a Sale and Purchase Agreement ("SPA") with
BOLT to acquire the entire shareholding in BOLT and thereby place
the operatorship of the leases held by BOLT in LTL's hands. Once
this SPA closes, anticipated to be in March 2017, LTL will initiate
work to reactivate the Bonasse Oilfield which has been shut-in
since mid-2016 and has plans, in due course, to drill several new
wells at Bonasse which it considers to be underexploited.
Gross unrisked prospective resources of over 1.3 billion barrels
of oil have been estimated in over 8 prospects and leads within
LGO's SWP lease interests and in the medium term, LTL plans to
complete the evaluation of the SWP leases and to propose the
drilling of at least one new deep well to test the potential of the
Cruse and Herrera Sandstones which, in addition to the results of
FRM-1, are known to be oil bearing due to rock samples recovered
from mud volcanoes in the SWP. Deep drilling in the SWP requires
new funding, potentially through a conventional farm out, in due
course.
Spain
During 2016, the Company maintained production operations at the
Ayoluengo Field in northern Spain and continued its dialogue with
the Spanish authorities on extending the existing La Lora
Concession ("Concession") for a further two 10-year periods. LGO's
Spanish subsidiary, Compañía Petrolífera de Sedano, S.L.U. ("CPS"),
was advised by its Spanish lawyers that it had a very strong case
for an extension, notwithstanding that the hydrocarbon laws in
Spain had changed extensively over the preceding 50 years of the
Concession, which was originally awarded in 1967.
CPS prepared and submitted to the Spanish authorities a thorough
legal, technical and commercial case for the continuation of oil
operations at Ayoluengo, where additional primary oil production
employing the existing wells, and side-tracks from them, could be
viably obtained. Further potential for secondary or enhanced oil
recovery were also presented.
On 27 January 2017 the Spanish Cabinet of Ministers came to a
final decision, based on interpretation of applicable law, and
issued a Royal Decree declining CPS's application for an extension
and allowing the Concession to expire, effective at midnight 31
January 2017.
As a result of the Spanish decision CPS has suspended all
petroleum activities at the Ayoluengo Field, including the
employment contracts of operational staff and has now submitted a
formal letter of interest to the Ministry of Energy, Tourism and
Digital Agenda in order to obtain a new 30-year concession over the
Ayoluengo Field. We are currently unable to assess the timing of
any new award, but every effort is being made to expedite the
process. Under European Union and Spanish legislation the offer of
a new concession requires a process of public tender in which the
previous concession holder has preferential treatment. The Licence
expiry has a minimal impact on LGO's operating finances at this
stage. Prior to the Royal Decree the carrying value of the Spanish
assets was approximately GBP7 million.
Group Costs
The Board instigated a cost saving and cash preservation
programme in third-quarter 2015 which included the suspension of
fees to the Chief Executive Officer from September, the suspension
of non-executive director's fees from October, the immediate
reduction in all discretionary spend, including travel, and a 50%
reduction in the salaries of a number of senior staff from February
2016. The discretional spending restrictions remain in place.
It was announced on 9 January 2017 that the Board of Directors
was being restructured with immediate effect resulting in the
termination of the post of non-Executive Chairman and the reduction
in fees to the Chief Executive and the remaining non-executive
directors. Steve Horton stepped down as Chairman in January 2017
and Mr Neil Ritson, the Company's Chief Executive has agreed to
combine his role with that of Chairman and simultaneously reduce
his fee from GBP240,000 per annum to GBP200,000. This reflects a
total annual saving to the Company of GBP120,000. The Company's
non-executive directors; Michael Douglas and Gordon Stein, have
accepted a new fee arrangement of GBP24,000 per annum, including
their roles as chairman of committees, representing a further
saving for the Company.
The Board has put in place a further programme of anticipated
cuts to its General and Administration ("G&A") costs which is
designed, over time, to bring the G&A in line with future
earnings. Areas such as staffing levels, staff salaries, office
rentals and advisory costs are being closely scrutinised and
targets have been set for further reductions.
During this period, when Board fees were deferred to preserve
cash resources, a substantial contractual debt totalling GBP396,675
was created. The directors affected; Mr Ritson (GBP238,641), Mr
Douglas (GBP43,750), Mr Thadchanamoorthy (GBP50,826) and Mr Jenkins
(GBP63,458), have agreed, as announced on 21 December 2016, to
convert that debt to ordinary shares at a price of 0.15 pence per
share, a 35% premium to the price at the time of that agreement in
December. LGO is seeking authority to allocate shares to fulfil
these obligations.
Outlook
It is the LGO Board's firm view that the assets owned by the
Company in Trinidad provide significant value for its shareholders
and that value will be most effectively realised through the
continued exploitation of those assets. The return to development
drilling at Goudron, the C-sand EOR pilot project, and the further
development of the SWP properties are seen as key to developing
both immediate and longer-term value.
In support of this above investment opportunities, LGO is
seeking the authority to issue shares for the purposes of growing
the business.
2 Capital Reorganisation
The Company currently has 8,367,599,626 Existing Ordinary Shares
in issue. The Directors consider that it is in the best interests
of the Company's long term development as a public quoted company
to have a more manageable number of issued ordinary shares and to a
level which is more in line with other comparable AIM-traded
companies.
The Capital Reorganisation, which comprises a consolidation and
sub-division of shares, has been structured in such a way so that
each of the New Ordinary Shares created pursuant to the General
Meeting shall have a nominal value of 0.05p each, being the nominal
value of the Existing Ordinary Shares. This is achieved by a
consolidation of every 20 Existing Ordinary Share into one
Consolidated Share followed by an immediate sub-division of each
Consolidated Share into one New Ordinary Share of 0.05p each and
one Deferred Share of 0.95p each. .
The Deferred Shares will not entitle their holders (a) to
receive notice of or attend and vote at any general meeting of the
Company; (b) to receive any dividend or other distribution; or (c)
participate in any return of capital on a winding up other than the
nominal amount paid up on such shares following a substantial
distribution to holders of ordinary shares. No share certificates
will be issued in respect of the Deferred Shares and no application
will be made to the London Stock Exchange for them to be traded on
AIM. The Deferred Shares are effectively valueless.
Further details of the proposed Capital Reorganisation are set
out in Part II of this document.
As a result of the creation of the Deferred Shares, the Articles
will need to be amended to reflect this.
The Capital Reorganisation and the amendment of the articles of
association are subject to Shareholders' approval at the General
Meeting, notice of which is set out at the end of this
Document.
Application will be made for the New Ordinary Shares, which will
number approximately 418 million, to be admitted to trading on AIM,
and dealings are expected to commence at 8.00 on 8 March 2017.
3 Electronic Communications
As a result of the Companies Act 2006 (as amended) ("Act"),
companies are now permitted to send or supply documents and
information to shareholders in electronic form and via a website
(subject to shareholder approval).
The main advantages to the Company of using electronic
communications are:
-- reduced printing and postal costs for the Company;
-- the speed of the provision of information to Shareholders as
Shareholders will be able to access communications from the Company
on the day of publication rather than having to wait for postal
delivery; and
-- the environmental benefits from a reduction of paper for printing shareholder communications.
Under the AIM Rules, Shareholder approval is required to enable
the Company to communicate with members by electronic form and/or
website communications. The Company is therefore seeking
Shareholder approval to enable the Company to make use of
Electronic Communications.
In addition, under the Act and the AIM Rules, Shareholders must
agree individually to be sent or supplied documents or information
in electronic form or via the Company Website and, before the
Company can send or supply documents or information to a member by
making it available on the Company Website, members must be asked
individually by the Company to agree that the Company may send or
supply documents or information to them by means of the Company
Website or by email.
If a Shareholder does not respond to the request within 28 days,
the Company may treat this as deemed consent to receiving documents
or information via the Company Website. The Company will notify the
member (either in writing, or by other permitted means) when a
relevant document or information is made available on the Company
Website and a member can always request a hard copy version of the
document or information.
Accordingly, you will find enclosed with this document a reply
form requesting your consent to receive documents and information
via a website and in electronic form. The reply form provides three
options for future communication by the Company. If we do not
receive a response from you within 28 days of the date of the
letter, then you will be deemed to have agreed that the Company may
send or supply documents and information to you via the Company
Website. Further, if you agree to the Company sending or supplying
documents or information to you in electronic form, please return
the reply slip in the letter to the Company and provide your
electronic address, for example, an e-mail address, for these
purposes.
4 Business to be transacted at the General Meeting
You will find set out at the end of this Document a notice
convening the General Meeting to be held at 200 Strand, London WC2R
1DJ at 10.30 a.m. on 7 March 2017.
The Resolutions to be proposed at the General Meeting are as
follows:
Resolution 1 is proposed as a special resolution to amend the
articles of association of the Company to create a new class of
Deferred Shares in order for the Company to propose Resolution 2 to
reorganise the share capital and reduce the number of ordinary
shares in issue whilst maintaining the current nominal value per
ordinary share of 0.05p each.
Resolution 2 is proposed as an ordinary resolution to implement
the Consolidation and Subdivision. The effect of this resolution,
if passed, is that the number of ordinary shares in issue will be
reduced by a ratio of 20:1 to a level comparable to peer companies
currently trading on AIM. The Deferred Shares created as a result
of this exercise will have no value. Further details of the
proposed Share Reorganisation is set out in Part II of this
document.
Resolution 3 and 4 are ordinary and special resolutions to
authorise the Directors to allot shares and grant rights to
subscribe for new ordinary shares up to an aggregate nominal amount
of GBP1,922,000 if Resolution 2 is not passed and the Share
Reorganisation is not implemented, or up to an aggregate nominal
amount of GBP96,100 if Resolution 2 is passed and the Share
Reorganisation is implemented to: (i) satisfy the Company's
obligations to Lind under the Funding Agreement (representing 14%
of the TVR) ; (ii) to settle accrued but unpaid fees to members of
the Board (representing 2% of the TVR); and generally to fund the
opportunities outlined in Part I of the Document and general
working capital requirements (representing 30% of the TVR).
The authorities to be granted pursuant to Resolutions 3 and 4
(inclusive) shall expire on the conclusion of the Annual General
Meeting of the Company to be held in 2018 (unless renewed varied or
revoked by the Company prior to or on that date).
Resolution 5 is proposed as a special resolution to give the
Company the option to use electronic communications to send or
supply documents or information to members by making them available
on a website or other electronic means.
5 Action to be taken by Shareholders
Shareholders will find enclosed with this Document a Form of
Proxy for use at the General Meeting. The Form of Proxy should be
completed and returned in accordance with the instructions printed
on it so as to reach the of Proxy for use at the meeting must be
completed and returned so as to be received by the Share Registrars
Ltd, The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR as
soon as possible and in any event not later than 10.30 a.m. on 3
March 2017. Completion and the return of the Form of Proxy will not
prevent Shareholders from attending and voting at the General
Meeting should they so wish.
6 Recommendation
It is important for the Company to be able to meet its
contractual obligations and to provide for working capital to
support the investment opportunities outlined above. As a
consequence the Board is seeking the authority to issue shares for
the purposes of sustaining the underlying business and create
opportunities for value growth. It is only with the support of
Shareholders, coming from the approval of these authorities, that
the Board can feel confident that it will be able to maintain the
Company's licence-to-operate.
The Board unanimously believe that the proposals set out in the
Resolutions are in the best interests of the Company and its
Shareholders and unanimously recommend you to vote in favour of the
Resolutions as they intend to do in respect of their own beneficial
holdings in the Company, amounting in aggregate to 48,308,970
Ordinary Shares.
Yours faithfully
Neil Ritson
Executive Chairman and Chief Executive Officer
Qualified Person's Statement:
The information contained in this announcement has been reviewed
and approved by Neil Ritson, Chief Executive Officer and Director
for LGO Energy plc, who has over 38 years of relevant experience in
the oil industry. Mr. Ritson is a member of the Society of
Petroleum Engineers (SPE), an Active Member of the American
Association of Petroleum Geologists (AAPG) and is a Fellow of the
Geological Society of London (BGS).
Appendix III
Glossary of Terms
Glossary
1C denotes the low estimate scenario
of contingent resources
------------------- -------------------------------------------
1P denotes proven reserves
------------------- -------------------------------------------
2C denotes the mid estimate scenario
of contingent resources
------------------- -------------------------------------------
2P denotes proven plus probable reserves
------------------- -------------------------------------------
3C denotes the high estimate scenario
of contingent resources
------------------- -------------------------------------------
3P denotes proven plus probable plus
possible reserves
------------------- -------------------------------------------
barrel or 45 US gallons (a Blue barrel)
bbl or Bbl
------------------- -------------------------------------------
bbl barrel
------------------- -------------------------------------------
best estimate the most likely estimate of a parameter
(P50) based on all available data, also
often termed the P50 (or the value
of a probability distribution of
outcomes at the 50% confidence
level)
------------------- -------------------------------------------
BNPP BNP Paribas
------------------- -------------------------------------------
BOLT Beach Oilfield Limited
------------------- -------------------------------------------
bopd barrels of oil per day
------------------- -------------------------------------------
contingent those quantities of petroleum estimated,
resources at a given date, to be potentially
recoverable from known accumulations,
but the associated projects are
not yet considered mature enough
for commercial development due
to one or more contingencies
------------------- -------------------------------------------
CPS Compañía Petrolífera
de Sedano, S.L.U.
------------------- -------------------------------------------
C-sand sandstone reservoirs below the
pre-Mayaro unconformity and above
the pre-Lower Cruse unconformity
encompassing sandstones of equivalent
age to both the Gros Morne and
the Lower Cruse formations
------------------- -------------------------------------------
Cruse Formation rocks of early Pliocene age lying
below the pre-Mayaro unconformity
and stratigraphically underlain
by the Lengua Formation. Upper
and Middle Cruse members grade
laterally into the Gros Morne from
west to east in Trinidad
------------------- -------------------------------------------
EOR enhanced oil recovery
------------------- -------------------------------------------
G&A general and administrative expenses
------------------- -------------------------------------------
GEPL Goudron E&P Limited
------------------- -------------------------------------------
Herrera Formation rocks of middle Miocene age characterized
by thick turbidite sandstones in
Trinidad
------------------- -------------------------------------------
km kilometres (one thousand metres)
------------------- -------------------------------------------
lead potential drilling target that
is insufficiently well defined
by seismic or other subsurface
data to allow immediate evaluation
of economic viability. Additional
data or study is required prior
to classification as a prospect
------------------- -------------------------------------------
Lind Lind Partners, LLC
------------------- -------------------------------------------
LTL Leni Trinidad Limited
------------------- -------------------------------------------
m thousand (ten to the power 3)
------------------- -------------------------------------------
Mayaro Sandstone alternative name for the Goudron
Sandstones occurring at stratigraphic
intervals above the pre-Mayaro
unconformity in Trinidad
------------------- -------------------------------------------
mean or expected value, is the arithmetic
average of a set of values
------------------- -------------------------------------------
MEEI the Trinidad & Tobago Ministry
of Energy and Energy Industries
------------------- -------------------------------------------
mm million (ten to the power 6)
------------------- -------------------------------------------
mmbbls million barrels of oil
------------------- -------------------------------------------
oil in place stock tank oil initially in place,
or STOIIP those quantities of oil that are
estimated to be in known reservoirs
prior to production commencing
------------------- -------------------------------------------
P10 (high the probability that a stated value
estimate) in a probability distribution will
be equal to or exceed 10%
------------------- -------------------------------------------
P50 (best the most likely estimate of a parameter
estimate) based on all available data, also
often termed the P50 (or the value
of a probability distribution of
outcomes at the 50% confidence
level)
------------------- -------------------------------------------
P90 (low estimate) the probability that a stated value
in a probability distribution will
be equal to or exceed 90%
------------------- -------------------------------------------
possible reserves those additional reserves which
analysis of geoscience and engineering
data suggest are less likely to
be recoverable than Probable Reserves.
The total quantities ultimately
recovered from the project have
a low probability to exceed the
sum of Proved plus Probable plus
Possible (3P) Reserves, which is
equivalent to the high estimate
scenario
------------------- -------------------------------------------
primary recovery the first stage of hydrocarbon
production, in which natural reservoir
energy, such as gas drive, water
drive or gravity drainage, displaces
hydrocarbons from the reservoir,
into the wellbore and up to surface
------------------- -------------------------------------------
producing in relation to developed projects
(e.g. wells and facilities) those
that are actively involved in the
extraction (production) of hydrocarbons
from a discovered reservoir
------------------- -------------------------------------------
prospect potential or actual drilling target
that is well defined by seismic
or other subsurface data with sufficient
level of detail for the evaluation
of economic viability
------------------- -------------------------------------------
prospective those quantities of petroleum which
resources are estimated, at a given date,
to be potentially recovered from
undiscovered accumulations
------------------- -------------------------------------------
proven reserves those quantities of petroleum,
which, by analysis of geoscience
and engineering data, can be estimated
with reasonable certainty to be
commercially recoverable (1P),
from a given date forward, from
known reservoirs and under defined
economic conditions, operating
methods, and government regulations
------------------- -------------------------------------------
probable reserves those additional reserves which
analysis of geoscience and engineering
data indicate are less likely to
be recovered than Proved Reserves
but more certain to be recovered
than Possible Reserves. It is equally
likely that actual remaining quantities
recovered will be greater than
or less than the sum of the estimated
Proved plus Probable Reserves (2P)
------------------- -------------------------------------------
PRMS Petroleum Resources Management
System of the SPE
------------------- -------------------------------------------
recompletion the is conversion of a well to
oil, gas and other subsurface resources
production from one zone or zones
(formations, horizons) to others
------------------- -------------------------------------------
reserves those quantities of petroleum anticipated
to be commercially recovered by
application of development projects
to known accumulations from a given
date forward under defined conditions
------------------- -------------------------------------------
reservoir a subsurface rock formation containing
an individual natural accumulation
of moveable petroleum
------------------- -------------------------------------------
sandstone a clastic sedimentary rock whose
grains are predominantly sand-sized.
The term is commonly used to describe
consolidated sand or a rock made
of predominantly quartz sand
------------------- -------------------------------------------
secondary a second stage of hydrocarbon production
recovery during which a fluid such as water
or gas is injected or re-injected
into the reservoir through injection
wells located in rock that has
fluid communication with production
wells. The purpose of secondary
recovery is to maintain reservoir
pressure and to displace hydrocarbons
toward the wellbore
------------------- -------------------------------------------
SPA Sale and Purchase Agreement
------------------- -------------------------------------------
SPE Society of Petroleum Engineers
------------------- -------------------------------------------
stb stock-tank barrel, a barrel of
oil at standard temperature and
pressure
------------------- -------------------------------------------
STOIIP or stock tank oil initially in place,
oil in place those quantities of oil that are
estimated to be in known reservoirs
prior to production commencing
------------------- -------------------------------------------
SWP the South West Peninsula of Trinidad
------------------- -------------------------------------------
turbidite a geologic deposit resulting from
a turbidity current, which is a
type of sediment gravity flow responsible
for distributing clastic sediment
from the shelf to the deep ocean
floor
------------------- -------------------------------------------
US$ United States of America dollar
------------------- -------------------------------------------
water re-injection a common form of secondary oil
or water flood recovery in which water is injected
or re-injected into the reservoir
formation to maintain reservoir
pressure and to displace oil towards
producing wells
------------------- -------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
END
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