Canada’s Calgary, Alberta-headquartered Niko Resources Ltd yesterday estimated it will make US$1 billion from its natural gas reserves in T&T. In a statement released with the company’s results for the year ended March 31, (2014), Niko said: “The company’s estimated reserves as at March 31, 2014 included 197 billion cubic feet (Bcf) of proved natural gas reserves and 235 Bcf of proved plus probable natural gas reserves related to its interest in Block 5c in T&T that was sold subsequent to March 31, 2014.”
After adjusting for the sale of the company’s interest in Block 5(c) in T&T, which closed in the current quarter (from April to June, 2014) “the estimated aggregate after-tax net present value of future net revenue attributable to the company’s estimated proved plus probable reserves (discounted at 10 per cent and estimated using forecast prices and costs) as at March 31, (2014) is approximately US$1 billion, “ the statement said.
Niko sold its 25 per cent interest in Block 5c to a subsidiary of the British Gas Group of the UK. The BG Group already had the remaining 75 per cent interest in the block off the east coast of Trinidad. In its message to shareholders, Niko’s board of directors said that in the second quarter of fiscal 2014, the company adopted a new business strategy that incorporates three principles, the first of which is to “focus on value generation in the D6 Block” in India.
The second principle is to “reduce the company’s exposure to future drilling commitments in its exploration portfolio while, if possible, maintaining optionality to benefit from the exploration potential in the portfolio, “ and the third principle is to “continue to restructure the company to create the necessary financial strength and flexibility to realise the inherent value of the company’s assets.”
In the third quarter of fiscal 2014, Niko closed on its US$340 million debt facility while simultaneously raising approximately US$30 million (net) in equity.
“Through this financing, the company rebalanced its debt obligations, extended the majority of its debt maturities out to calendar 2017, finalised a settlement agreement for its long-term drilling contracts, and added US$174 million in cash to the company’s balance sheet, thus providing funding and time for execution of the company’s new strategic focus,” the statement said.