Columbus Energy, the oil and gas producer and explorer focused on onshore Trinidad with the ambition to grow in South America, provides an update on business, operational and financial activities during Q1 2019.

Key Highlights in Q1 2019:

SWP:  

• Company has chosen a well location for the SWP, to be funded from available resources, and is undertaking the necessary pre-drill activities to commence drilling in Q3 2019, subject to receiving relevant Governmental approvals. 
• Detailed technical work undertaken by EPI Group, independent geoscience specialists, on the SWP and follow-up drilling locations, the works largely complete with the final report due mid Q2 2019.

Inniss-Trinity CO2 Project: 

• Company continues to progress the Inniss-Trinity CO2 project with its partner Predator Oil & Gas Holdings plc ("Predator") and has commenced site preparation activities.

New Country Entry: 

• Company is in exclusive discussions for award of a concession in a South American country, after a successful three-month tender process. Potential for low-cost entry into a discovered onshore oilfield with a detailed work programme for 2019-2021 submitted as part of the Company's bid. Announcement of new concession forecast for late Q2/early Q3 2019.
• A number of additional M&A opportunities being considered, consistent with Company's strategy roadmap.

Operations: 

• Net cashflows from operations increased marginally during quarter despite lower production and lower average oil prices. Average production of 602 barrels of oil per day ("bopd") in Q1 2019 (Q4 2019: average of 670 bopd).  
• Peak production of 1,000 bopd achieved in late January, production exceeding 860 bopd on three occasions during quarter confirming the combined field potential when economic and commercial conditions allow a more aggressive well work programme.
• Rig usage and opex costs being managed carefully to reflect current commercial circumstances and oil price environment. Focus remains on profit and not production growth.

Financial:  

• Cash balance of US$2.06 million (un-audited) at 31 March 2019 (31 December 2018: US$2.60 million, un-audited). Excess cashflow from operations largely used for technical work on the SWP and debt reduction during quarter.
• Average realised sales price from operations in Q1 2019: US$55.67/bbl (US$57.58/bbl in Q4 2018) - peaking at US$58.17/bbl in March 2019. 
• Increased cashflow positive position achieved from operations, delivering US$0.40 million (Q4 2018: US$0.37 million) - despite 14% reduction in Gross Revenues (in Q1 2019 compared to Q4 2018). 
• Outstanding Lind debt facility reduced to US$0.26 million at 31 March 2019 (US$0.40 million at end December 2018). 
• New US$3.25 million Lind facility, announced in July 2018, allowed to lapse in January 2019 without drawdown.

Spain:

• The initial stages of decommissioning of the La Lora Concession has recently commenced, consisting of removal of above ground facilities. Costs expected to be met from sale of equipment and scrap.

Leo Koot, Executive Chairman of Columbus, commented:
"It has been a very busy few months on many fronts as we have sought to ensure we are in a position to start unlocking the exciting SWP opportunities, expand our footprint into other countries, whilst managing our operations in Trinidad during a period when market and commercial conditions were not conducive to the continued chase for extra barrels of production. We have also been working with Predator and the relevant Trinidad authorities on securing the necessary approvals to enable the planned CO2 project on Inniss-Trinity to commence in late Q2/early Q3 2019.

Nearly two years since I started with Columbus, we are now almost ready to start unlocking the huge potential that exists in the SWP, an asset located just a few miles from Venezuela and part of the biggest hydrocarbon basin in the world.  During the past two years, we have successfully re-negotiated the commercial terms of the SWP licences in a manner which makes them far more attractive than the commercial terms we have for the other assets in our portfolio. Specialist independent technical consultants have also been working with our team to de-risk the SWP portfolio and identify well locations which will allow us to carry out a suitably risked drilling campaign over the next 6-24 months. I am delighted to confirm that the first well location has been chosen and we are undertaking the necessary pre-drill activities to allow us to commence this well in Q3 2019, subject to the necessary regulatory approvals. This well will be funded from available resources and will hopefully provide the stepping stone to an exciting and transformational drilling and development campaign in this prolific area over the coming months and years.  

At the same time, we have been working to secure a concession in a new country for over a year and have recently successfully come through a three-month tender process. This would be a low-cost entry into an established hydrocarbons province. The Company has submitted a proposed three-year work programme for the concession and we hope to announce the signing of that contract late Q2/early Q3 2019. This entry into another country will start the process of expanding our footprint and reducing our exposure to just one country of operation. We believe our team have the skills to enable us to unlock a number of opportunities in that country and the region.    

As I mentioned in early January, we have been managing our operations in Trinidad in a different manner, focussing on optimising profit as opposed to simply growing the total production numbers. With lower oil prices and the impact of SPT between US$50-US$60/bbl, we have taken action to reduce our rig activity and we have also reduced operating costs in a number of other areas. Despite the lower production and resultant lower revenues, we have slightly increased our cash netback from operations and will look to continue to maintain a tight ship until the economic conditions and commercial terms allow us to pursue real production growth again. There are more effective ways of spending operational profits at such times and during Q1 2019 the technical work on the SWP, the Inniss-Trinity CO2 project and M&A activities took precedence over production growth. 

The next quarter will be busy as we prepare for the SWP drilling campaign and progress other M&A opportunities. In Q1 2019, we made a number of offers for interesting opportunities in four countries and will seek to unlock those opportunities still in play if they make good sense for our shareholders. We believe we can bring new funding for the right opportunities in a manner which will be value-accretive for our shareholders, should these funds be required. These are exciting times and I believe Columbus is in a good place to take advantage of the various opportunities that our team have identified through our extensive networks."

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