How is it doing
An interim agreement with Trinidad’s state oil firm Heritage Petroleum gives the companies until the end of June to finalise terms of a longer-term incremental production service contract (IPSC).
Goudron is one of five fields held by CERP in Trinidad.
The company’s most recently released financial results statement - interims for the six months to 30 June 2019 - stated oil sales totalling 92,154 barrels. The daily rate averaged 561 bopd albeit in the month of February it peaked at 1,019 bopd.
Net interim revenue amounted to £3.4mln. First half losses narrowed to £1.72mln.
Columbus described it as a ‘solid production base’ and noted that operationally it encountered technical challenges during the period.
Next steps in Trinidad
Columbus has a detailed work programme scheduled for the 2019-2021 period,
In late-October, the company confirmed it had spudded the Saffron prospect, located in South West Peninsula, after having received Ministry approval.
An update in January revealed that the Saffron well had been drilled successfully, encountering multiple oil shows.
By mid-February, CERP updated investors on the operation and more recently, in early April, the company said a more detailed update on the results is due to be released on 27 April.
At the end of March, Predator said the project remains on track for revenue, and, “encouragingly” the project economics are still attractive at US$20 per barrel oil (WTI crude).
Presently, it is preparing for a second phase of injection – using remote access for control, amidst coronavirus disruption.
“The next step is to inject CO2 at even higher pressures and on a continuous basis and Predator's CO2 provider is currently working to achieve this objective as quickly and safely as possible working under the current revised HSE protocols,” Predator said.
Predator has the right to acquire the project for US$4.2mln. The option has a deadline of September 30, 2020.
Dealing with coronavirus disruption
In April, CERP announced details of a number of cost-cutting measures aimed at cash and capital preservation amid the coronavirus (COVID-19) crisis.
CERP said its executive management won’t receive cash salaries for at least three months, while employee salaries will be reduced by 40% for at least three months, headcount will be reduced by 15% and the company will cease non-essential capital spending.
"Given the downturn in the oil markets and the global markets, in part caused by COVID-19, we have taken aggressive measures to cut costs and protect our cash position,” said Tony Hawkins, Columbus chief executive.
“I am mindful that these cost reduction measures will have a real cost for our employees and we will work hard to minimise this where possible. I would like to thank our employees who have shown flexibility and pragmatism at this very difficult time.”
The company had US$2.56mln of cash at the end of March, of which US$780,000 is restricted.
Expansion in South America
In October, Columbus entered into a 25-year production sharing contract onshore Suriname at Weg Naar Zee, a block owned by state oil firm Staatsolie.
The Weg Naar Zee project area spans some 900 square kilometres and includes both discovered resources and remaining exploration potential.
It is host to some 24mln barrels of discovered resources, with estimated recoverable quantities between 4mln and 10mln.
Historic exploration took place in 1968, between 1989 and 1991, then more recently between 2007 and 2013.
In Phase 1, slated to span three years, Columbus will conduct studies which will include historic well data along with a detailed reservoir evaluation, with minimum spend of US$250,000.
Extended well testing is also slated, for at least two of the known oil zones, with low-risk appraisal and rolling development commencing in the first six months of 2020.
Phase 2 will comprise of 2D seismic data and three exploration wells, to become five in Phase 3. These phases are optional and are estimated to cost US$500,000 each.
There is no upfront cost or payment attached to the agreement. The production sharing contract sees Columbus receive between 80% and 40% of the project’s ‘profit oil’.
Under the agreement, Columbus has 100% operating interest with Staastolie holding the right to farm-in to up to 50%.