LGO Energy will benefit from lower royalty rates in Trinidad after state oil company Petrotrin slashed its take of production.
The royalty rate on most barrels is being cut by 40% to below 10%. The move means LGO will earn 10% more per barrel on the oil it produces at prices under $50 per barrel
It is good news for LGO’s Goudron Field and will apply retrospectively to sales made from February 1.
“This will have a net revenue benefit at current oil prices and production levels of approximately 10% to Goudron E&P Limited (GEPL), LGO’s wholly owned Trinidadian subsidiary which operates the Goudron Field,” LGO said.
The benefit will increase at higher production levels and GEPL will reinvest the savings in additional well work to boost output.
LGO chief executive Neil Ritson, said: “We are delighted the mutual benefits of encouraging investment by reducing royalty rates at this time of lower oil prices have been recognised.”
“LGO has responded by increasing the level of ongoing investment, as recently reported, and this will be good for the company, its investors and for Trinidad generally.”