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Range acquires Trinidad assets

London-listed independent picks up stakes in producing offshore licences under deal with Trinity

Range Resources has agreed to acquire producing assets off Trinidad & Tobago being offloaded by Trinity Exploration & Production in a $4.55 million cash deal.

The London-listed independent will gain stakes of 100% in the Brighton Marine and 70% in the Point Ligoure-Guapo Bay-Brighton Marine exploration and production licences off the Caribbean country’s west coast under the newly minted transaction.

Trinity is disposing of the non-core assets to focus on exploitation of its onshore and offshore holdings on the east coast of Trinidad with net proven and probable (2P) reserves of 18.7 million barrels.

It said in a statement the sale *strengthens the company's balance sheet and working capital position”.

"Trinity's West Coast portfolio played a significant role in the early evolution of the company. However, greater shareholder value can now be delivered by focusing our financial and management resources on driving forward a focused onshore and offshore portfolio with a robust reserve base, substantial production growth opportunities and significant further resource potential,” the London-listed player’s chief executive Bruce Dingwall said.

Trinity has seen a $24.2 million impairment over the past three financial years on the west coast assets, mainly due to a drop in 2P reserves because of the oil price decline, and suffered losses of $2.1 million on the assets last year.

For its part, Range will be acquiring assets with net 2P reserves of 2.6 million barrels and combined current production of 200 barrels per day.

It stated “the west coast assets are profitable at current production levels and oil prices as a result of recent optimisation and cost reduction exercises undertaken by Trinity”.

Furthermore, they are located near to shore in easily accessible shallow water, with full infrastructure and facilities in place, and there is “significant potential to increase production through low risk workovers of existing wells”.

There are also “longer-term opportunities to grow reserves and production through further development and exploration activity”, the company stated, citing a low acquisition cost of $1.75 per barrel of 2P reserves.

Trinity chairman Kerry Gu said: “Expansion of our existing portfolio of producing assets in Trinidad will not only provide additional production, cash flows, reserves, drill targets and enhanced oil recovery potential, but it is also expected to result in further improvements to the cost structure across our Trinidad business.”

It marks Trinity’s second acquisition of upstream assets this month, having recently struck a deal to acquire a 23% stake in the Perlak oilfield in Indonesia from Hengtai Weiye Oil and Gas for $3.2 million.

The latest deal is due for completion in the fourth quarter, subject to customary regulatory approvals.