Touchstone Exploration has agreed to acquire Trinity Exploration and Production, a crude oil exploration, development and production company operating in Trinidad and Tobago, in an all-stock deal worth around $30.1m.
Trinity Exploration and Production holds producing assets both onshore and offshore along the east and west coasts of Trinidad. It is publicly traded on the AIM market of the London Stock Exchange (LSE).
On the other hand, Touchstone Exploration is a Canadian upstream company, which is presently engaged in onshore operations in Trinidad and Tobago. The firm is listed on Toronto Stock Exchange (TSX) as well as on the LSE.
Under the terms of the deal, Trinity Exploration and Production’s shareholders will exchange each of their shares in the company for 1.5 shares of Touchstone Exploration.
In the combined firm, existing Touchstone Exploration’s shareholders will hold a stake of around 80% while Trinity Exploration and Production’s shareholders will own the remaining 20%.
Trinity Exploration and Production generated net daily average crude oil sales volumes of 2,790 barrels per day (bbls/d) in 2023, and 2,669bbls/d for the three months ending 31 March 2024.
As of 31 December 2023, the company had an estimated total proved plus probable reserves of 12.91 million barrels (MMbbl).
Trinity Exploration and Production operates seven onshore oil blocks, which produced 1,495bbls/d in 2023. This accounted for 53% of its net annual average crude oil production.
The firm’s west coast assets, comprising the Point Ligoure-Guapo BayBrighton Marine and Brighton Marine licenses, are offshore and yielded net crude oil volumes of 352bbls/d in 2023. These represent 13% of Trinity Exploration and Production’s annual net production.
Since 2013, the company has operated and produced offshore from the east coast of Trinidad. Currently, it produces crude oil from three platforms in the Trintes field within the Galeota block whose average crude oil production in 2023 was 943bbls/d.
Trinity Exploration and Production’s assets are said to complement Touchstone Exploration’s existing holdings.
The deal is projected to yield a combined producing portfolio ranging from approximately 11,700 to 12,400 barrels of oil equivalent per day (boe/d), based on the 2024 average daily production guidance from each company.
Additionally, the combined estimated proved plus probable reserves are expected to total approximately 80.3 million barrels of oil equivalent (MMboe) as of 31 December 2023.
Touchstone Exploration president and CEO Paul Baay said: “We believe this acquisition represents a compelling strategic opportunity which will deliver enhanced scale, balance sheet strength, and growth opportunities.
“The business combination will create an upstream oil and natural gas company of increased scale in Trinidad, enhancing our ability to deliver growth in reserves, production and cash flows for the benefit of our combined shareholders and local stakeholders.
“The combined group will be able to invest in multiple development programmes and accelerate the growth potential of the enlarged asset base, thereby giving us the potential to materially enhance long-term value.”
The closing of the deal hinges on regulatory, stock exchange, and Trinity Exploration and Production’s shareholder approvals, following which it is likely to occur by the end of Q3 2024.
