Touchstone Exploration Inc. has entered an agreement to purchase onshore producing assets from Trinity Exploration and Production Plc for $20.8 million prior to adjustments, according to a news release.
As part of the agreement, Touchstone will acquire a 100% working interest in five blocks located in the Southern Basin of the republic of Trinidad and Tobago. The blocks—Fyzabad-2, WD-2, WD-5/6, WD-13 and WD-14—have an estimated average field production of about 1,490 barrels of oil per day, the release said.
Three of the blocks adjoin Touchstone’s Fyzabad Block, while the remaining two are contiguous with Touchstone’s WD-4 Block. The company said the acquisition will add three years of development drilling inventory to its portfolio.
Touchstone plans to fund the acquisition through cash on hand and its existing bank facility. In addition, Touchstone is negotiating terms of the expansion of its bank facility and, depending on the outcome of those discussions, will complete the funding of the acquisition with additional debt and/or equity. FirstEnergy Capital Corp. acted as Touchstone's financial advisor.
In conjunction with the signing of the agreement, Touchstone has paid a $2.08 million deposit to Trinity which is not refundable if the acquisition fails to close due to a breach of the agreement by Touchstone, according to the release. The acquisition is conditional upon the approval of Trinity shareholders and is subject to regulatory approvals and the satisfaction of closing conditions.
The acquisition is expected to close by January 2016 and will be effective as at the completion date, the release said.
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