Trapoil Acquires pct 15 Interest in Athena Oil Field

Trapoil, the independent oil and gas exploration and appraisal company focused on the UK Continental Shelf (“UKCS”) region of the North Sea, announces that on 16 March 2012 it agreed to acquire a 15 per cent working interest in the Athena Oil Field (“Athena”) from Dyas UK Limited (“Dyas”), subject to Department of Energy and Climate Change (“DECC”) and Dyas’ partners’ approvals, for a total cash consideration of approximately £34.5 million.

Trapoil’s management currently estimate the net acquisition cost to the Company to be approximately £26.9 million, as described below, payable in three stages.

The acquisition will be transformational, cash generative and, together with tax synergies and anticipated hedging, will generate enhanced returns to Trapoil. First production from Athena is currently anticipated in early Q2 2012.

The acquisition yields good projected returns in excess of 50 per cent. when tax synergies and anticipated hedging activity are taken into account.

Trapoil is not exposed to costs up to the current anticipated development cost. The Company’s net abandonment liability is anticipated to be £5.5 million.

With completion of this acquisition, Trapoil will have achieved within one year its two principal IPO objectives of creating a dynamic exploration programme backed by cash flows from producing assets with high levels of tax synergy.

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Offshore Nieuws  Staff, March 19, 2012; Image:  Trapoil