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After paying more than $1.27 billion in taxes, Heritage Petroleum Co Ltd recorded a net profit of $682.7 million last year, according to its financial statement for the year ended September 30, 2021.

“Against the backdrop of strengthening demand for crude and higher market prices in 2021, Heritage and its subsidiaries (Heritage, the company) have continued to deliver strong earnings and cash generation for 2021,” its chairman Michael Quamina stated.

Heritage recorded revenue of $6.8 billion for the year which Quamina stated was driven by improved crude oil prices averaging 31 per cent higher than in 2020 and higher production levels.

Year on year, overall crude production grew by five per cent to 41,200 bopd. Quamina said in the face of the ongoing pandemic and a volatile economic environment, this is especially noteworthy and testament to the Company’s commitment and ability to rise above the operational challenges presented by COVID-19.

Heritage also had another successful year of Replacing Reserves with a top quartile 109 per cent reserves replacement ratio through a strong focus on workovers, production optimisation and Improved oil recovery, he stated.

According to Quamina in addition to the “strong” revenue generation, “disciplined” cost management has contributed to profit before tax of $2 billion.

This represented a 97 per cent increase when compared to the $1.6 billion made in 2020.

Refinances USD loan

“As of the date of this publication, I am pleased to report that the Company would have successfully closed the refinancing of the Senior Secured debt of the Group via a tender offer for the TPHL 2026 Notes and the issuance of a new Heritage 2029, US$500 million bond and a new US$475 million Heritage Term Loan.

“The refinancing provided significant benefits to the TPHL Group, including lowering our weighted average cost of debt, extending our average life of debt maturities thereby freeing up near term cash for production winning Chairman’s Report for the year ended 30 September 2021 activities and curing the administrative defaults that arose as a result of the late publication of the TPHL Consolidated 2019 Financials,” Quamina stated.

Heritage Chairman argued that importantly, from a national perspective, the refinancing has resulted in all of the non-core assets of TPHL, including agricultural, residential and recreational lands being made fully available to be best utilised by the Government of T&T for the benefit of the citizenry.

Quamina stated that Heritage will continue to shape its sustainability agenda and its first soon to be published ESG Report, tells the narrative of the company’s journey and achievements over the period 2020 to 2021.

“As part of our commitment to accelerating progress on our key sustainability programmes (protecting the environment, building community capacity, supporting economic development and empowering future leaders), we have undertaken a comprehensive review of our operations and systems. Our ESG Report reflects our commitment to continuous improvement as we strive to become a more sustainable and resilient business,” Quamina stated.

Quamina added that many plans for stakeholder engagement and exercises in community relations, were curtailed because of the COVID-19 pandemic and the restrictions that were put in place to stop its spread.

He whoever said the company was able to pivot and change its proposals to suit the needs of our fenceline communities.

“We delivered food hampers where there was significant need and our ‘Here We Grow’ Programmme donated over 4,000 seedlings to promote home gardening. During this very challenging period, we also supported the Collation Against Domestic Violence,” he stated.

For the upcoming year Quamina said as the pandemic is ongoing, Heritage will continue to take steps to support and protect its employees and contractors.

“The strong financial results of 2021, as well as a sustained period of robust oil prices and the expected launch of our Drilling Programme in the current fiscal year, gives me the confidence that we are well placed to show continued growth in 2022 and progress our strategy,” Quamina stated.

“We are delivering for today while planning for the future,” he added.

Heritage Petroleum was incorporated in T&T on 5 October 2018.

Heritage is primarily engaged in exploration, development, production and marketing of crude oil.

The sole shareholder is Trinidad Petroleum Holdings Limited (TPHL).

Prior to Heritage’s formation, its exploration and production activities were conducted by the Petroleum Company of T&T Ltd (Petrotrin).

Petrotrin undertook a restructuring in 2018 and by virtue of the Miscellaneous Provisions (Heritage Petroleum, Paria Fuel Trading Co Ltd, Guaracara Refining Company Limited (Vesting) Bill, 2018 effective 1 December 2018, Petrotrin’s assets relative to exploration and production were vested in Heritage Petroleum.

Petrotrin’s assets related to terminalling and refinery operations were vested to Paria and Guaracara respectively.

The associated decommissioning and dismantlement obligations in respect of E&P, terminalling and refining operations were also transferred to the respective entities.

As a result, Heritage’s opening assets and liabilities originated as a result of the above, with the corresponding liability due to Petrotrin.

Heritage (as well as Paria and Guaracara) is a guarantor of the parent company’s, (TPHL’s), senior secured and unsecured debt obligations.

Collectively, Heritage, TPHL, Paria and Guaracara are the loan parties.

TPHL and the guarantors are currently in default of certain covenants of the credit agreement and Indenture, according to the financial statement.