Further to the announcement made on 14 Decmber 2007, the Company is pleased to announce it has exercised its Option Agreement to purchase the entire share capital of Eastern Petroleum Australia Pty Ltd (“Eastern”). Eastern’s main asset is a 25% interest in the Icacos Permit which is a 1,900 acre Icacos Oilfield located on the Cedros Peninsula of Southern Trinidad, and lies within the East Venezuelan Basin. Leni Gas has also purchased a further 25% interest in the Icacos permit from Kroes Energy Inc. (“Kroes”) giving the Company a total interest of 50% in the field.
This field adheres to the Company's investment strategy to acquire current production with potential for improved production from the existing wells and low-cost exploration.
The field will be jointly owned with the operator of the field Primera Oil, an active participant in the Trinidad petroleum industry. The field has produced oil since its discovery by Premier Oil in 1965, mostly 28API gravity crude, from Miocene age sands of the Upper Cruse Formation at depths of typically between 450 ft and 3,000 ft. The leases expire variously between 2023 and 2028.
Current daily production for the total field is 31 barrels per day from only 3 of 14 wells. It is the intention to increase this level utilising regular well maintenance and modernisation techniques. Previously producing wells are planned to be reconditioned and others reopened to take advantage of renewed demand and pricing of oil. This acquisition brings Leni Gas’s current daily production to some 130 barrels.
Leni Gas has paid a total of US$1 million to be satisfied as to US$500,000 in cash on completion and US$500,000 by the issue of 4 million new Lenigas Ordinary Shares of 0.05p each upon the vendor obtaining all necessary permissions and assignments. The Company will have the benefit of oil production income which commenced on 12th January 2008.
David Lenigas, Executive Chairman, commented:
"The acquisition of 50% of the producing Icacos oilfield in Trinidad provides the Company with a foothold in one of the richest oil and gas bearing areas of the world.
The potential of the Icacos Field fits with the Company's stated strategy of production plus affordable exploration potential.
The Company has commissioned TRACS International Consultancy Limited to undertake an immediate review of the Icacos Oilfield with the view to establishing STOIIP and reserve estimates during the coming year."