Columbus Energy Resources PLC (LON:CERP) has a new name, new management and new strategy. Leo Koot, an experienced and well respected CEO, has joined the company to reassess and revitalise the assets in Trinidad, bringing in new personnel. Management overheads have already been cut and a programme of in-fill wells has been put on hold. Instead, a series of low-cost interventions should increase production in the short term, moving the company towards a virtuous cash flow circle; we should see the results of the initial work programme in Q417. Any cash flow can be recycled into further development and potentially fund a material exploration programme, which could be game changing (SWP holds an estimated 1.3bnbbls OIP across a number of targets).
New name, CEO, MD Trinidad, CFO and strategy
Leo Koot is a trained Petroleum Engineer (training at Shell (LON:RDSa)) and well-regarded CEO, having successfully built TAQA’s North Sea operations from scratch to over 65,000bopd and $1.7bn in annual revenues. To take the position at CERP (formerly LGO Energy), he clearly sees potential in the assets. The new MD of Trinidad (Stewart Ahmed) has 32 years’ experience and has particular expertise in waterflooding. Their combined expertise has already made a material difference.
Goudron production increase targets cash breakeven
Goudron is currently producing between 380-420bopd, which is not enough to cover production and central costs. However, with management costs falling, only a small increase in production will be required to generate free cash flow. A water injection programme has been accelerated, smart pumps are being installed and a well stimulation programme is planned. Additionally, CERP is awaiting government renewal of the BOLT licence, where it is targeting future exploration.
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