Columbus, the oil and gas producer and explorer focused on onshore Trinidad and Suriname, received Ministry on Energy and Energy Industry approval for the start of continuous injection of CO2 in the Trinity Inniss field.
The Company also announces a continuation, for the month of May 2020, of the cost control measures first implemented in April 2020.
Leo Koot, Executive Chairman of Columbus, commented:
"The Company is pleased to have received Ministry consent for the start of continuous injection of CO2 in the Trinity Inniss field. The CO2 project is an important enhanced oil recovery project for both the Company and Trinidad and I look forward to updating the market upon the commencement of continuous injection.
The Company has decided, for the month of May, to continue to manage some of its third party costs through the issuance of shares under the Lind Facility and the Contractor Shares scheme. However, we are conscious of the dilution this has on shareholders and so will, in the coming weeks, carefully review the effect of the share issuances and whether it makes sense to consider its use in the future."
Background - Trinity Inniss CO2 Project
As previously announced, the term of the Trinity Inniss Incremental Production Service Contract ("IPSC") was extended to allow for the implementation of the CO2 Pilot Project.
The Company's interest in the Trinity Inniss field benefits from an agreement with Predator Oil and Gas plc ("Predator"), whereby Predator will help plan and fund the CO2 EOR Pilot Project (the "CO2 pilot project"). As part of the agreement with Predator, the Company and Predator share 50:50 in any incremental oil production (after Predator recovers its costs associated with the project). Additionally, Predator has the right (until 30 September 2020) to purchase the Company's interest in the Trinity Inniss field for US$4.2m.
Corporate Update - Lind Shares and Contractor Shares
The Company will continue, for the month of May 2020, of the cost control measures first implemented in April 2020.
As announced on 15 April 2020, the Company has implemented various costs control measures, including the issuance of shares to Lind in lieu of cash payments and the issuance of Contractor Shares.
The Company has decided that it is the best of interests of its shareholders to continue these actions into the month of May 2020 and as such will:
· Issue 13,046,803 new ordinary shares to Lind in lieu of cash payments otherwise due in May 2020 (the "Lind Shares"). Such issuance is in accordance with the Company's rights under the 2019 Facility Agreement.
· Contractor Shares: issuance of 9,500,000 new ordinary shares to various contractors, as part of the Contractor Shares Scheme, which has been in place since mid-2018.
The other measures for managing company costs as announced on 15 April 2020, including no cash salaries for the Executive Management, remain in place.
Lind Shares and Contractor Shares
The Lind Shares and the Contractor Shares represent 2.51% of the 895,467,938 ordinary shares in issue prior to the issuance of the Lind Shares and Contractor Shares. The Lind Shares and Contractor Shares will rank pari passu in all respects with the Company's existing ordinary shares. An application will be made for the Lind Shares and Contractor Shares to be admitted to trading on AIM, ("Admission"), and it is expected that Admission will become effective and that dealings will commence on or around 20 May 2020.