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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Trinity Exploration & Production Plc | LSE:TRIN | London | Ordinary Share | GB00BN7CJ686 | ORD USD0.01 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 39.00 | 38.00 | 40.00 | 39.00 | 39.00 | 39.00 | 0.00 | 08:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMTRIN
RNS Number : 6332R
Trinity Exploration & Production
25 September 2017
Dissemination of a Regulatory Announcement that contains inside information according to
REGULATION (EU) No 596/2014 (MAR).
Trinity Exploration & Production plc
("Trinity")
Interim Results
Balance sheet cleansed, increased profitability and production set to grow
Trinity, the independent E&P Company focused on Trinidad & Tobago, today announces its unaudited interim results for the six months ended 30th June 2017 ("the period"). H1 2017 was a pivotal period for Trinity with the completion of a refinancing and restructuring in January 2017 and a ramp up in operating activity. The Company's focus is now centred on safely increasing production, and this, along with its strong cash flows, low net debt and continued financial discipline provides a platform to grow profitable production from its significant reserve base.
H1 2017 Highlights
Hot Features
Premium
H1 2017 H1 2016 % Change
Average realised oil price (USD/ bbl) 46.3 32.8 41
Average net production (bopd)(1) 2,397 2,612 (8)
EBITDA (USD MM)(2) 5.5 1.5 267
Consolidated EBITDA (USD/bbl)(3) 12.6 3.8 232
Consolidated Break-even (USD/bbl) (4) 28.2 29.9 (6)
Cash Balance (USD MM) 11.5 5.1 125
Net Debt (USD MM)(5) (1.2) (34.3) (97)
Notes:
1. Average net production for H1 2016 is exclusive of the Guapo block which illustrates a like-for-like comparative. The year-on-year comparative inclusive of the Guapo block was 2,659 bopd which equated to an overall 10% decline
2. EBITDA: Operating profit before Depreciation, Depletion and Amortisation 3. Consolidated EBITDA/bbl: EBITDA / Net production 4. Consolidated operating break-even/bbl: See Appendix 1-Trading Summary Table 5. Net debt position is detailed in Appendix 2, unaudited Management view
H1 2017 Highlights
Financial Highlights
o Growing margins and increasing profitability within the current oil price environment
-- Increased consolidated operating netback by 232% to USD 12.6/bbl (H1 2016: USD 3.8/bbl); and
-- Reduced consolidated operating breakeven price by 6% to USD 28.2/bbl (H1 2016: USD 29.9/bbl).
o Strengthened balance sheet
-- Reduction in net debt by 97% to USD (1.2) million (H1 2016: USD (34.3) million); and
-- Increase in cash balance by 125% at period end of USD 11.5 million (H1 2016: USD 5.1 million).
Operating Highlights
o Safely growing production profitably
-- 8% year-on-year, like for like production decline to 2,397 bopd (H1 2016: 2,612 bopd) was mainly due to natural decline and a lack of production investment in 2016;
-- H1 activity set included:
- 5 Onshore Recompletions ("RCPs") (H1 2016: nil)
- 4 Onshore Reactivations (H1 2016: nil)
- 40 Workovers ("WOs") completed: 34 Onshore, 5 East Coast and 1 West Coast (H1 2016: 33);
- Resumption of Swabbing across 5 Onshore fields. (Swabbing is a process to mechanically remove liquids from the production zone of a gas or oil well)
-- H1 production performance:
- During Q1 there was a proportionate return to production investment while ensuring that financial discipline was maintained;
- An upward production trajectory in Q2 was stymied by Tropical Storm Bret in June, with a quick recovery in July, and continued into August;
-- Pioneered new technology on East Coast in June with the installation of an alternative low cost artificial lift; Mechanically Pumping Hydraulic Unit ("MPHU") on a slanted wellhead;
-- Increased activity was commensurately matched with increased HSE focus through training and audits;
-- Trinity received an HSE award for Safety Leadership Engagement from the national oil company; Petroleum Company of Trinidad and Tobago ("Petrotrin").
Corporate Highlights
-- Reduced downside exposure to commodity risk/low oil prices by hedging over 35% of production should the WTI oil price fall below USD 40.0/bbl in the period from 1st April 2017 to 31st March 2018, through the purchase of put options;
-- Board changes, with Jeremy Bridglalsingh, David Segel and Angus Winther joining the board on the completion of the refinancing and restructuring in January 2017 and Jonathan Murphy stepping down and James Menzies joining the Board after the AGM in June 2017; and
-- Retained the services of Walbrook PR Limited as financial PR advisor and Whitman Howard Limited as equity advisor.
Post Period End Highlights
o Continued upward trajectory in production
-- A further increase in operating activities across core assets during July-August 2017 restored production with average production of 2,609 bopd in August 2017; and
-- H2 2017 planned work programme consists of; at least 30 RCPs, 30 reactivations, 30 routine WOs and increased swabbing, which should enable the lower end of the initial production guidance (2,600-2,800 average bopd for 2017) to be achieved, and at a lower cost, and better economics, than originally planned.
o Sale of West Coast assets
-- On 11th August 2017 Trinity announced that it entered into a binding sale and purchase agreement ("SPA") to sell its interests in the West Coast licences and related fixed assets to Range Resources Trinidad Limited ("Range") for a cash consideration of USD 4.55 million. The transaction is expected to complete in Q4 2017.
Bruce A. I. Dingwall CBE, Executive Chairman of Trinity, commented:
"Having secured Trinity's future in January, H1 2017 saw a directional change in the organisation's activities with the focus on preparing the Company for growing production safely while maintaining financial discipline in order to maximise the returns from our high-quality asset base. I am proud of the effort the team has given to date and grateful for the support the Company has received from our key suppliers and stakeholders. Our progress thus far is testament to that combined effort.
With the challenges of the last two years behind us our attention is now on safely increasing levels of profitable production from our core Onshore and East Coast assets and on obtaining the regulatory approvals that will allow the West Coast sale to reach financial close thereby further strengthening our balance sheet. H2 2017 has already seen operational activity ramping up with RCPs and WOs headlining the programme. Work on new infill targets is progressing well and the results may support an expansion of drilling options going forward.
Asset integrity is a fundamental part of our business cycle. We are undertaking several key infrastructure projects during H2 2017 to underpin further growth. Combined, these activities provide scope to grow production from current levels to an initial target run-rate of 3,000 bopd in the near future.
On behalf of the Board I must thank all our staff and stakeholders for their hard work and support which has allowed Trinity to focus on profitable growth. H1 2017 has been transformational and we are intent on building our business based on a sure footing in this new oil price environment.
We look forward with confidence and in providing a further quarterly update in November."
Enquiries
Trinity Exploration & Production Tel: +44 (0) 131 240 3860
Bruce Dingwall, Executive Chairman
Jeremy Bridglalsingh, Chief Financial
Officer
SPARK Advisory Partners Limited (NOMAD Tel: +44 (0) 203 368 3550
& Financial Adviser)
Mark Brady
Miriam Greenwood
James Keeshan
Cantor Fitzgerald Europe (Broker) Tel: +44 (0) 207 894 7000
David Porter
Sebastien Maurin
Whitman Howard Limited (Equity Advisor) Tel: +44 (0) 207 659 1234
Nick Lovering
Walbrook PR Limited trinityexploration@walbrookpr.com
Nick Rome or Tel: +44 (0) 207 933
8780
Competent Person's Statement
All reserves and resources related information contained in this announcement has been reviewed and approved by Graham Stuart, Trinity's Technical Adviser, who has 35 years of relevant global experience in the oil industry. Mr. Stuart holds a BSC (Hons) in Geology.
About Trinity (www.trinityexploration.com)
Trinity is an independent oil and gas exploration and production Company focused solely on Trinidad & Tobago. Trinity operates producing and development assets both onshore and offshore, in the shallow waters off the West and East Coasts of Trinidad. Trinity's portfolio includes current production, significant near-term production growth opportunities from low risk developments and multiple exploration prospects with the potential to deliver meaningful reserves/resources growth. Trinity operates all of its nine licences and, across all of the Group's assets, management's estimate of 2P reserves as at the end of 2016 was 21.3 mmbbls. Group 2C contingent resources are estimated to be 21.1 mmbbls. The Group's overall 2P plus 2C volumes are therefore 42.3 mmbbls.
Trinity is listed on the AIM market of the London Stock Exchange under the ticker TRIN.
OPERATIONS REVIEW
The refinancing and restructuring completed in January 2017 allowed our operational team to refocus its efforts from maintaining base production to incrementally growing production to accelerate value extraction from the asset base. With minimal spend on asset integrity and base well maintenance in 2016, revitalisation of production in a safe and efficient manner required a methodical approach in Q1 2017. One impediment Trinity faced in Q2 2017 was the passage of Tropical Storm Bret in June 2017 which temporarily impacted our operations. The operations team met the challenge and production growth continued. Having created growth momentum in H1 2017, Trinity is positioned to progress with delivery of the planned H2 2017 activity set across its portfolio via a series of low cost, high return activities inclusive of RCPs, re-activations, WOs and swabbing.
Onshore operations
-- H1 2017 average like-for-like net production exclusive of the Guapo block was 1,278 bopd (H1 2016: 1,383 bopd). The 8% decrease in production volumes resulted mainly from natural decline rates.
-- H1 2017 work programme involved the completion of 5 RCPs, 34 WOs and 4 re-activations (H1 2016: 33 workovers and no reactivations);
-- H2 2017 planned work programme anticipates, at least, an additional 30 RCPs, 15 reactivations, 27 WOs and increased swabbing across all fields. Additional rigs have been procured to support the increased activity set. Further to this, work continues in parallel to expand the number of drill-ready infill well locations.
East Coast operations
-- H1 2017 average production was 909 bopd (H1 2016: 1,018 bopd). The 11% decrease in production was largely the result of natural production decline;
-- H1 2017 work programme comprised 5 WOs (H1 2016: nil), one of which was the installation of an MPHU in June 2017. This is the first offshore installation of an MPHU on a slanted wellhead and the well has since produced at a consistent rate and continues to be monitored. Priority on infrastructure projects during H1 2017 included; the Bravo crane upgrade and recertification works, replacement of the Galeota tank farm fire water pump, Trintes crane assessments and installation of additional diesel storage;
-- H2 2017 planned work programme anticipates 11 reactivations and 3 WOs to maintain and optimise base production levels. Infrastructure projects for H2 2017 comprise; Alpha crane boom change out and phase one of the installation of a new 10,000 bbl tank. H2 2017 activities also being progressed include:
- Continuation of the geological, geophysical and engineering review of the Trintes infill drilling
programme and the development plan for TGAL and wider Galeota Ridge
- Demobilisation of Trinity's slant drilling rig in preparation for; inspection, repair and upgrade for
future drilling.
West Coast operations
-- H1 2017 average net production was 210 bopd (H1 2016: 211 bopd). Production was maintained from the previous year as a result of a pipeline change-out programme completed in the Brighton Marine field in the latter part of Q4 2016, resulting in a production increase of c. 55 bopd which was realised in H1 2017;
-- H1 2017 work programme entailed 1 workover (H1 2016: nil) and the commencement of asset integrity infrastructure projects;
-- H2 2017 planned work programme anticipates 4 reactivations to maintain and grow production levels and the continuation of asset integrity related projects.
FINANCIAL REVIEW
Income Statement Analysis
H1 2017 H1 2016 D Change
Production
Average realised oil price
(USD/ bbl) 46.3 32.8 13.5
Average Net production
(bopd)(1) 2,397 2,612 (215)
Statement of Comprehensive USD'000 USD'000
Income USD'000
Operating Revenues 20,180 16,074 4,106
Operating Expenses(2) (excluding
DD&A(3) ) (14,695) (14,569) (126)
-------------------------------------- --------- --------- ---------
Operating profit before
DD&A 5,485 1,505 3,980
DD&A (3,551) (2,450) (1,101)
-------------------------------------- --------- --------- ---------
Consolidated operating
profit/(loss) 1,934 (945) 2,879
Exceptional items 25,123 1,064 24,059
-------------------------------------- --------- --------- ---------
Operating profit/(loss)
after exceptional items 27,057 119 26,938
Finance Cost (1,177) (1,763) 586
-------------------------------------- --------- --------- ---------
Profit/(loss) before income
tax 25,880 (1,644) 27,524
Income tax expense (2,452) 143 (2,595)
-------------------------------------- --------- --------- ---------
Profit/(loss) after income
tax 23,428 (1,501) 24,929
Currency translation 352 (25) 377
-------------------------------------- --------- --------- ---------
Total Comprehensive income/(expense) 23,780 (1,526) 25,306
Notes:
1. Average net production for H1 2016 is exclusive of the Guapo block which illustrates a like-for-like comparative.
2. Operating Expenses: Royalties, Production Costs, G&A and other operating expenses 3. DD&A: Depreciation, Depletion and Amortisation
Operating Revenues
Operating revenues of USD 20.2 million (H1 2016: USD 16.1 million). The USD 4.1 million increase was mainly as a result of an increase in average realised crude prices.
Operating Expenses
Operating expenses of USD (18.2) million (H1 2016: USD (17.0) million) comprised of the following:
-- Royalties of USD (5.9) million (H1 2016: USD (4.0) million)
-- Production costs ("OPEX") of USD (6.7) million (H1 2016: USD (8.7) million)
-- DD&A charges of USD (3.6) million (H1 2016: USD (2.5) million)
-- G&A expenditure of USD (1.6) million (H1 2016: USD (1.8) million)
-- Other operating expenses of USD (0.4) million (H1 2016: nil) include Fair Value
adjustments to Put Options related to commodity hedge
Operating Profit/ (Loss)
The operating profit (before exceptional items) for the period amounted to USD 1.9 million (H1 2016: USD (0.9) million loss) and was mainly driven by an increase in crude oil prices and a lower operating cost structure.
Exceptional items
Exceptional items of USD 25.1 million (H1 2016: USD 1.1 million) related to:
-- Unsecured creditor balances compromise following the successful creditor proposal filed and approved by the High Court of Trinidad and Tobago, which saw USD 15.5 million in Trade and other payables being written off
-- Citibank loan compromise, which allowed a USD 6.5 million write off on the USD 10.0 million debt
-- Board of Inland Revenue of Trinidad and Tobago ("BIR") agreement to write off USD 5.2 million of Interest on Taxes
-- Gain on extinguishment of financial liability of MEEI USD 0.2 million -- Net foreign exchange loss on compromised balances of USD (0.7) million -- Impairment of oil and gas assets of USD (0.7) million -- Restructuring costs incurred, net of amounts provided of USD (0.6) million -- Impairment of receivables of USD (0.3) million
Net Finance Cost
Finance cost for the period totaled USD (1.2) million (H1 2016: USD (1.8) million), made up of:
-- Unwinding of the discount rate on the decommissioning provision of USD (0.8) million (H1 2016: USD (0.8) million)
-- Interest on taxes of nil (H1 2016: USD (0.5) million) -- Interest on loans: USD (0.4) million (H1 2016: USD (0.4) million)
- Accrued interest on CLN H1 2017 of USD (0.3) million (H1 2016: nil)
- Interest expense on loan facilities from Citibank (Trinidad & Tobago) Limited USD (0.1) million (H1 2016: USD (0.4) million)
Taxation
Taxation charge for the period was USD (2.5) million (H1 2016: 0.1 million) which is made up of:
-- De-recognition of deferred tax assets of USD (2.8) million (H1 2016: nil) -- Decrease in deferred tax liability of USD 0.4 million (H1 2016: USD 0.0 million) -- Unemployment Levy of USD (0.1) million (H1 2016: USD (0.3) million) -- Supplemental Petroleum Tax: nil (H1 2016: USD 0.4 million credit)
As at 30th June 2017, the Group has unrecognised income tax losses of USD 205.1 million which have no expiry date.
Total Comprehensive Income/ (Expenses)
Total Comprehensive Profit for the period was USD 23.8 million (H1 2016: USD (1.5) million loss)
Cash Flow Analysis
Summary of Statement of Cash Flows
H1 2017 H1 2016 FY 2016
USD'000 USD'000 USD'000
Opening Cash Balance 7,615 8,200 8,200
----------------------------------------- -------- -------- --------
Cash Movement
Net cash (outflow)/inflow from
operating activities (5,458) (1,097) 8,987
Net cash outflow from investing
activities (650) (24) (266)
Net cash inflow/(outflow)from financing
activities 10,025 (1,967) (6,206)
----------------------------------------- -------- -------- --------
Increase/ (decrease) in cash and
cash equivalents 3,917 (3,088) 2,515
Less: Funds held for abandonment -- -- (3,100)
----------------------------------------- -------- -------- --------
Closing cash balance 11,532 5,112 7,615
========================================= ======== ======== ========
Opening Cash Balance
Trinity began the year with an initial cash balance of USD 7.6 million (2016: USD 8.2 million).
Operating Activities
Trinity's net cash outflow from operating activities was USD (5.4) million (H1 2016: USD (1.1) million). H1 2017 included USD 8.6 million in relation to the restructuring in the form of settlement payments to unsecured creditors (trade creditors, Petrotrin, BIR and MEEI) and quarterly payments (BIR and MEEI) in line with the creditors' proposal.
Investing Activities
Trinity incurred capital expenditures mainly on production related capex conducted on onshore assets and infrastructure related capex conducted on the west and east coast assets totaling USD 0.7 million (H1 2016: USD 0.0 million).
Financing Activities
H1 2017 saw the refinancing of Trinity through the placing of ordinary shares and issue of an unsecured CLN. The funding from these activities were used in settling outstanding debt and unsecured creditor balances in accordance with the proposal and settlement agreements. Net inflows from financing activities were USD 10.0 million which comprised of:
-- Issue of ordinary shares from the Placing (net of costs) USD 10.8 million -- Net proceeds from CLN USD 3.0 million -- Repayment of borrowings USD (3.5) million (H1 2016: USD (1.1) million) -- Finance costs USD (0.3) million (H1 2016: USD (0.9) million)
Closing Cash Balance
Trinity's cash balance at 30th June 2017 was USD 11.5 million (H1 2016: USD 5.1 million).
APPIX 1: TRADING SUMMARY
A summary of realised price, production, operating break-evens, Opex and G&A expenditure metrics is set out below:
Trading Summary Table
Details H1 2017 H1 2016 % Change Realised Price (USD/bbl) 46.3 32.8 41 Production (bopd) Onshore* 1,278 1,383 (8) West Coast 210 211 (0) East Coast 909 1,018 (11) -------------------------- -------------- --------------- --------- Consolidated 2,397 2,612 (8) Operating Break-even (USD/bbl Onshore 16.1 17.8 (10) West Coast 29.0 34.9 (17) East Coast 23.2 30.1 (23) Consolidated 28.2 29.9 (6) Metrics (USD/bbl) Opex/bbl - Onshore 10.8 12.0 (10) Opex/bbl - West Coast 24.0 29.1 (18) Opex/bbl - East Coast 17.6 23.0 (23) G&A/bbl - Consol 3.8 3.9 (3)
Note (*): Both years are exclusive of the Guapo block. Production inclusive of the Guapo block will be 1,430 bopd with consolidated production of 2,659 bopd with a resultant Onshore Operating Break-even USD 18.4/bbl) and Onshore Opex/bbl at USD 12.4/bbl
APPIX 2: NET CASH/ (DEBT) CALCULATION
Balance Sheet Extract H1 2017 H1 2017 H1 2016 FY 2016
USD MM USD MM USD MM USD MM
Unaudited
Unaudited(1) Mgmt. View(2) Unaudited Audited
A: Current Assets
Cash and cash
equivalents 11.5 11.5 5.1 7.6
Trade and other
receivables 3.7 3.7 9.6 5.5
Inventories 3.7 3.7 3.9 3.8
Derivative
financial
instrument 0.2 0.2 - -
Total Current Assets 19.1 19.1 18.6 16.9
====================== ====================== ===================== =====================
B: Liabilities
Non-current
Trade and other
payables 1.6 1.8 - -
Taxation payable 3.6 3.6 - -
Convertible loan
note 2.7 6.8 - -
Total Non-Current
Liabilities(3) 7.9 12.2 - -
Current
Trade and other
payables 4.2 4.3 28.6 34.0
Taxation payable 3.8 3.8 12.3 10.9
Borrowings - - 12.0 10.0
Total Current
Liabilities(4) 8.0 8.1 52.9 54.9
Total Liabilities 15.9 20.3 52.9 54.9
====================== ====================== ===================== =====================
(A-B): Net cash/(debt)
position 3.2 (1.2) (34.3) (38.0)
Notes:
1. States the amortised cost of the CLN and MEEI liabilities as stated in the Financials (see notes 2, 15 and 17 to the financial statements)
2. States the Face Value of the CLN and MEEI liabilities as opposed to amortised cost stated in the Financials
3. Non-Current Liabilities excludes Deferred tax liability & Provision for other liabilities 4. Current Liabilities excludes Provision for other liabilities
STATEMENT OF DIRECTORS' RESPONSIBILITY
The Directors confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:
-- an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal
risks and uncertainties for the remaining six months of the financial year; and
-- the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties that they face; and
-- material related party transactions in the first six months and any material changes in the
related-party transactions described in the last annual report.
A list of the current Directors is maintained on the Trinity Exploration & Production plc website www.trinityexploration.com.
By order of the Board
Bruce A. I. Dingwall, CBE
Executive Chairman
Trinity Exploration & Production plc
Condensed Consolidated Statement of Comprehensive Income
for the period ended 30th June 2017
(Expressed in United States Dollars)
----------------------------------------------------------------------------------------
Notes 6 months 6 months Year ended
to 30th to 30th December
June 2017 June 2016 2016
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
Operating Revenues
Crude oil sales 20,120 16,074 35,303
Other income 60 -- --
------------ ------------ ------------
20,180 16,074 35,303
Operating Expenses
Royalties (5,906) (4,043) (9,326)
Production costs (6,759) (8,699) (15,569)
Depreciation, depletion and
amortisation 7 (3,551) (2,450) (9,539)
General and administrative
expenses (1,630) (1,827) (4,154)
Other operating expenses 2 (400) -- --
------------ ------------ ------------
(18,246) (17,019) (38,588)
------------ ------------ ------------
Operating Profit/(Loss) before
Exceptional Items 1,934 (945) (3,285)
Exceptional items 4 25,123 1,064 (1,675)
Finance Cost 6 (1,177) (1,763) (4,733)
------------ ------------
Profit/(Loss) Before Taxation 25,880 (1,644) (9,693)
Taxation (Charge)/Credit 5 (2,452) 143 2,829
------------ ------------ ------------
Profit/(Loss) for the period 23,428 (1,501) (6,864)
Other Comprehensive Income/(Expense)
Currency Translation 352 (25) (112)
------------ ------------ ------------
Total Comprehensive Income/(Expense)
for the period 23,780 (1,526) (6,976)
============ ============ ============
Earnings per share (expressed
in dollars per share)
Basic 18 0.09 (0.02) (0.07)
Diluted 18 0.07 (0.02) (0.07)
Trinity Exploration & Production plc
Condensed Consolidated Statement of Financial Position
for the period ended 30th June 2017
(Expressed in United States Dollars)
-------------------------------------------------------------------------------------------------
Notes As at 30th As at 30th As at 31st
June 2017 June 2016 December 2016
ASSETS $'000 $'000 $'000
(unaudited) (unaudited) (audited)
Non-current Assets
Property, plant and equipment 7 48,202 58,600 59,632
Intangible assets 8 25,362 25,823 25,406
Abandonment fund 1,135 -- 1,072
Performance bond 253 -- --
Deferred tax asset 12 2,665 2,375 5,496
------------ ------------ ---------------
77,617 86,798 91,606
------------ ------------ ---------------
Current Assets
Inventories 3,730 3,894 3,787
Trade and other receivables 9 3,658 9,587 5,449
Derivative financial instrument 10 200 -- --
Cash and cash equivalents 11,532 5,112 7,615
------------ ------------ ---------------
19,120 18,593 16,851
Assets held-for-sale 7,696 11,039 --
------------ ------------ ---------------
26,816 29,632 16,851
------------ ------------ ---------------
Total Assets 104,433 116,430 108,457
============ ============ ===============
Equity
Capital and Reserves Attributable
to Equity Holders
Share capital 13 96,676 94,800 94,800
Share premium 13 125,362 116,395 116,395
Share warrants 71 71 71
Other Equity 15 590 -- --
Share based payment reserve 12,247 12,178 12,244
Reverse acquisition reserve (89,268) (89,268) (89,268)
Merger reserves 75,467 75,467 75,467
Translation reserve (1,645) (1,583) (1,997)
Accumulated (deficit) (172,429) (190,518) (195,857)
------------ ------------ ---------------
Total Equity 47,071 17,542 11,855
Non-current Liabilities
Trade and other payables 17 1,640 -- --
Taxation payable 5 3,634 -- --
Convertible loan note 15 2,729 -- --
Deferred tax liability 12 2,503 3,161 2,927
Provision for other liabilities 16 26,348 28,858 38,318
------------ ------------ ---------------
36,854 32,019 41,245
------------ ------------ ---------------
Current Liabilities
Trade and other payables 17 4,210 28,555 34,009
Taxation payable 5 3,794 12,331 10,928
Borrowings 14 -- 11,950 9,950
Provision for other liabilities 16 106 1,863 470
------------ ------------ ---------------
8,110 54,699 55,357
Liabilities held-for-sale 11 12,398 12,170 --
------------ ------------
20,508 66,869 55,357
------------ ------------ ---------------
Total Liabilities 57,362 98,888 96,602
------------ ------------ ---------------
Total Shareholders' Equity and Liabilities 104,433 116,430 108,457
============ ============ ===============
Trinity Exploration & Production plc
Condensed Consolidated Statement of Changes in Equity
for the period ended 30th June 2017
(Expressed in United States Dollars)
------------------------------------------------------------------------------------------------------------------------------------
Share Share Share Other Share Reverse Merger Translation Accumulated Total
Capital Premium Warrant Equity Based Acquisition Reserve Reserve Deficit
Payment Reserve
Reserve
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
--------- ---------- -------- ------- --------- ------------ --------- ------------ ------------ ---------
Balance at
30th June
2016
(unaudited) 94,800 116,395 71 -- 12,178 (89,268) 75,467 (1,583) (190,518) 17,542
Share based
payment
charge -- -- -- -- 66 -- -- -- -- 66
Translation
difference -- -- -- -- -- -- -- (302) -- (302)
Total
comprehensive
expense
for the
period -- -- -- -- -- -- -- (112) (5,339) (5,451)
Balance at end
of 2016
(audited) 94,800 116,395 71 -- 12,244 (89,268) 75,467 (1,997) (195,857) 11,855
========= ========== ======== ======= ========= ============ ========= ============ ============ =========
Share based
payment
charge -- -- -- -- 3 -- -- -- -- 3
Other equity
net of
transaction
cost -- -- -- 590 -- -- -- -- -- 590
Issue of
ordinary
shares 1,876 8,967 -- -- -- -- -- -- -- 10,843
Total
comprehensive
income
for the
period -- -- -- -- -- -- -- 352 23,428 23,780
Balance at
30th June
2017
(unaudited) 96,676 125,362 71 590 12,247 (89,268) 75,467 (1,645) (172,429) 47,071
========= ========== ======== ======= ========= ============ ========= ============ ============ =========
Trinity Exploration & Production plc
Condensed Consolidated Cashflow Statement
for the period ended 30th June 2017
(Expressed in United States Dollars)
---------------------------------------------------------------------------------------------------
Notes 6 months 6 months Year ended
to 30th to 30th 31st December
June 2017 June 2016 2016
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
Operating Activities
Profit/(Loss) before taxation 25,880 (1,644) (9,693)
Adjustments for:
Translation difference (735) 1,711 2,275
)
Finance cost 6 348 917 3,156
Share option expense 3 49 66
Finance cost - decommissioning provision 6 829 846 1,577
Depreciation, depletion and amortisation 7 3,551 2,450 9,539
Gain on disposal of Guapo-1 7 -- (963) (954)
Impairment of property, plant and
equipment 7 732 -- 2,420
Release of provision for restructuring -- -- (1,870)
Release of provision for claim -- -- (1,218)
Other provisions -- -- 712
Impairment of payables -- (447) (157)
Impairment of receivables 4 348 -- 1,071
Gain on extinguishment of financial
liabilities 4 (210) -- --
Unsecured creditors' claims -- -- 697
Compromised creditor balances 4 (26,568) -- --
4,178 2,906 7,621
------------ ------------ ---------------
Changes In Working Capital
Inventory 57 68 26
Assets held for sale 11 -- 1,926 1,896
Decrease/(Increase)Trade and other
receivables 451 (3,774) (746)
(Decrease)/IncreaseTrade and other
payables (7,577) (681) 1,741
(2,891) 445 10,538
Taxation paid (2,567) (1,542) (1,551)
------------ ------------ ---------------
Net Cash Inflow/ (Outflow) From
Operating Activities (5,458) (1,097) 8,987
------------ ------------ ---------------
Investing Activities
Purchase of property, plant & equipment 7 (650) (24) (266)
Net Cash Inflow/(Outflow) From Investing
Activities (650) (24) (266)
------------ ------------ ---------------
Financing Activities
Finance cost 6 (348) (917) (3,156)
Issue of shares (net of costs) 13 10,843 -- --
Issue of convertible notes (net
of costs) 15 3,030 -- --
Repayments of borrowings 14 (3,500) (1,050) (3,050)
------------ ------------ ---------------
Net Cash Inflow/(Outflow) From Financing
Activities 10,025 (1,967) (6,206)
------------ ------------ ---------------
Increase/ (Decrease) in Cash and
Cash Equivalents 3,917 (3,088) 2,515
============ ============ ===============
Cash And Cash Equivalents
At beginning of period 7,615 8,200 8,200
Less funds held for abandonment -- -- (3,100)
Increase/(Decrease) 3,917 (3,088) 2,515
------------ ------------ ---------------
At end of period 11,532 5,112 7,615
============ ============ ===============
Trinity Exploration & Production plc
Notes to the Condensed Consolidated Financial Statements for the period ended 30th June 2017
1 Background and Accounting Policies
Background
Trinity Exploration & Production plc ("Trinity") is incorporated and registered in England and trades on the Alternative Investment Market ("AIM"), a market operated by London Stock Exchange plc. Trinity ("the Company") and its subsidiaries (together "the Group") are involved in the exploration, development and production of oil reserves in Trinidad.
Basis of Preparation
These condensed interim financial statements for the six months ended 30(th) June 2017 have been prepared in accordance with IAS 34, 'Interim financial reporting', as adopted by the European Union ("EU"), on a going concern basis. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31st December 2016, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.
The results for the six months ended 30th June 2017 and 30th June 2016 are unaudited and do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31st December 2016 were approved by the board of directors and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified.
Going Concern
In making their going concern assessment, the Directors have considered the Group's budget and cash flow forecasts. On the 11th January 2017 the Group was able to secure a refinancing solution enabling the Company to retire its existing senior debt facility (see note 14), reduce outstanding payables to unsecured trade creditors, significantly modify repayment terms to state creditors namely the Board of Inland Revenue ("BIR") and the Ministry of Energy and Energy Industry ("MEEI") (see notes 5&17) and provide sufficient additional capital through the issuing of ordinary shares and a convertible loan note ("CLN") to continue operating (see notes 13 and 15 respectively). As part of the refinancing significant balances were compromised with the senior debt holder and with the Group's unsecured creditors in accordance with the senior debt settlement and unsecured creditor settlement agreements.
Subsequent to the refinancing the Group meets its day-to-day working capital requirements through revenue generation and positive operating cash flows. The Group's forecast and projections, taking account of reasonable possible changes in oil price and sales volume, show that the group should be able to operate within the level of its current cash resources. For these reasons, the Board of Directors have a reasonable expectation that the group has adequate resources to continue operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis of preparing the financial statements.
Accounting policies
The accounting policies adopted are consistent with those of the previous financial year, as set out in the consolidated financial statements for the year ended 31st December 2016, except for income taxes in the interim periods which are accrued using the tax rate that would be applicable to the expected total annual profit and loss and the other policies outlined below. The business is not affected by seasonality.
There are no IFRS or IFRS Interpretations Committee ("IFRIC") interpretations that are effective for the first time for the financial year beginning on or after 1st January 2017 that would be expected to have a material impact on the group.
Estimates
The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the Condensed Consolidated Financial Statements for the year ended 31st December 2016.
Non-current assets (or disposal Groups) held for sale
Non-current assets (or disposal Groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal Groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continued use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal Group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.
Compound Financial Instruments
Compound financial instruments issued by the group comprise convertible notes that can, in certain circumstances, be converted to share capital at the option of the holder, and the number of shares to be issued does not vary with changes in their fair value. The liability component of a compound financial instrument is recognised initially at the fair value of a similar liability that does not have an equity conversion option. The equity component is recognised initially as the difference between the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound financial instrument is measured at amortised cost using the effective interest rate method. The equity component of a compound financial instrument is not re-measured subsequent to initial recognition except on conversion or expiry.
Trade and other payables
Trade and other payables are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.
Derivative financial Instruments and hedging activities
The company has not applied hedge accounting and all derivatives are measured at fair value through profit and loss.
Financial assets at fair value through profit or loss financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.
2 Financial risk management
Financial risk factors
The group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.
The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group's annual financial statements for 2016, which can be found at www.trinityexploration.com. On 1st April 2017 a put option was put in place which hedged a portion of the Group's production against downside movement in crude oil price below $40.00/bbl. The introduction of a put option is the only new change in any risk management policies or management since the year end.
Liquidity risk
Compared to year end, there were changes in the contractual undiscounted cash out flows for certain financial liabilities as follows:
- Borrowings of $10.0 million due to Citibank Trinidad and Tobago Limited was fully settled in accordance with the senior debt settlement agreement.
- Outstanding trade payables were compromised and settled in accordance with the unsecured creditor settlement agreement.
- Taxes due to the BIR were significantly modified following the restructuring of the Group in January 2017. Interest on taxes of $5.2 million were compromised and a repayment term over 10 quarters were agreed.
- Payables to the MEEI were significantly modified following the restructuring of the Group in January 2017. The terms of repayment of these financial liabilities has been substantially modified from the original financial liability, the transaction was accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability was recognised at fair value by discounting the future cash outflows at 10% discount rate with a gain recognised through the Condensed consolidated statement of comprehensive Income.
Fair value estimation
The table below analyses financial instruments carried at fair value, by valuation method.
The different levels have been defined as follows:
- Quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1).
- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (Level 2).
- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (Level 3).
The following table presents the group's financial assets and liabilities that are measured at fair value at 30 June 2017.
Level 1 Level 2 Level 3 Total
-------------- --------- --------- -------- ------
$'000 $'000 $'000 $'000
Assets
Put options 200 200
Total assets - - 200 200
============== ========= ========= ======== ======
The group had no financial assets and liabilities measured at fair value at 31st December 2016.
Fair value measurements using significant unobservable inputs (Level 3)
Put options
$'000
1st January 2017 --
Purchased put options 600
(Losses)/gain recognised (400)
Accretion --
Payments --
30th June 2017 200
============
For put options at fair value through the profit or loss, an assessment of oil price movement in terms of the volatility at 30 June 2017 was done recognising a loss of $0.4 million (2016: nil) included within 'Other operating costs' in the Condensed consolidated statement of comprehensive income.
Group's valuation processes
The group's finance department includes a team that performs the valuations of financial assets required for financial reporting purposes, including Level 3 fair values. This team reports directly to the Chief Financial Officer ("CFO") who in turn reports to the Audit Committee ("AC"). Discussions of valuation processes and results are held between the CFO, AC and the valuation team at least twice per year, in line with the group's interim reporting dates.
3 Operating segment information
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions. Management have considered the requirements of IFRS 8, in regard to the determination of operating segments, and concluded that the Group has only one significant operating segment being the production, development and exploration and extraction of hydrocarbons in Trinidad.
All revenue is generated from sales to one customer in Trinidad & Tobago: The Petroleum Company of Trinidad & Tobago ("Petrotrin"). All non-current assets of the Group are located in Trinidad & Tobago.
4 Exceptional Items
Items that are material either because of their size, their nature, or that are non-recurring are considered as exceptional items and are presented within the line items to which they best relate. During the current period, exceptional items as detailed below have been included in the Condensed Consolidated Statement of Comprehensive Income. An analysis of the amounts presented as exceptional items in these financial statements are highlighted below.
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
Secured creditor compromise (6,450) -- --
Interest on tax compromise (5,249) -- --
Unsecured creditors' compromise (15,532) -- --
Foreign exchange loss on compromised 663 -- --
balance
Impairment of property, plant &
equipment - FZ 2 732 -- 2,420
Impairment of receivable 348 -- 1,071
Restructuring 577 350 940
Gain on extinguishment of financial (210) -- --
liabilities
Gain on disposal of Guapo-1 -- (963) (954)
Other provisions -- -- 712
Unsecured creditor claims -- -- 545
Release of provision - potential
claim -- -- (1,218)
Provision for restructuring -- -- (1,870)
Impairment of payables -- (447) --
Translation difference (2) (4) 11
(25,123) (1,064) 1,657
========== ========== ==============
Exceptional items related to:
- Secured creditor compromise - $ 6.5 million gain under the senior debt settlement agreement where the
unpaid balance was compromised
- Interest on tax compromise - $ 5.2 million gain under the creditor settlement where interest
outstanding was waived with the Board of Inland Revenue ("BIR")
- Unsecured creditors' compromise - $ 15.5 million gain under the creditor settlements arising from
compromised balances with suppliers
- Foreign exchange loss on compromised balance - $ 0.7 million charge under the creditor settlements
arising from compromised balances with suppliers
- Impairment of property, plant & equipment - $ 0.7 million charge resulting from an impairment loss on the FZ 2 asset
- Impairment of receivable - $ 0.3 million charge resulting from impairment of deal cost VAT recoverable from 2013
- Restructuring - $ 0.6 million charge as a result of field restructuring costs incurred
- Gain on extinguishment of financial liabilities - $ 0.2 million gain due to the modification in payment terms with the MEEI. The old liability of $ 2.1 million was extinguished and a new liability of $
1.9 million was recorded at fair value, the difference being the gain recognised
5 Taxation Charge/ (Credit)
a. Taxation Charge 30th June 30th June 31st December
2017 2016 2016
Current tax $'000 $'000 $'000
* Current period
Petroleum profits tax 44 307 1,533
Corporation tax -- -- 27
Supplemental petroleum tax -- (418) (951)
Deferred tax
* Current period
Movement in asset due to tax losses 2,822 -- (3,036)
Movement in liability due to accelerated
tax depreciation (392) (32) (381)
Unwinding deferred tax on Fair Value (27) -- --
uplift
Translation differences 5 -- (21)
Tax charge/(credit) 2,452 (143) (2,829)
========== ========== ==============
The Group has a deferred tax asset of $2.7 million on its Condensed Consolidated Statement of Financial Position which it expects to recover in more than 12 months based on the expected taxable profits generated by Group companies.
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
b. Taxation payable current
Petroleum Profits Tax/ Unemployment
Levy 86 1,464 2,233
Corporation Tax -- 539 508
Supplemental Petroleum Tax 3,708 10,328 8,187
Taxation payable 3,794 12,331 10,928
========== ========== ==============
c. Taxation payable non-current
Petroleum Profits Tax/ Unemployment 2,222 -- --
Levy
Corporation Tax 508 -- --
Supplemental Petroleum Tax 904 -- --
Taxation payable 3,634 -- --
========== ========== ==============
The Taxation payable has been split between current and non-current and represents the principal balance owed to the BIR. The amount agreed with the BIR and outstanding at the point of restructuring was $10.9 million of which $3.5 million has been repaid for the period ended 30th June 2017 with the remaining balance of $7.4 million repayable over 9 quarters commencing September 2017. The interest portion outstanding on taxes are classified within current and non-current trade and other payables see note 17.
6 Finance Cost
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
Decommissioning 829 845 1,577
Interest on taxes -- 428 2,215
Interest on loans 348 490 941
1,177 1,763 4,733
========== ========== ==============
7 Property, Plant and Equipment
Land & Oil & Plant &
Buildings Gas Property Equipment Other Total
$'000 $'000 $'000 $'000 $'000
------------ -------------- ------------- ------ -----------
Opening net book amount at 1st
January 2017 1,890 53,541 4,201 -- 59,632
Additions 1 622 27 -- 650
Disposal (9) -- -- -- (9)
Impairment(1) -- (732) -- -- (732)
Depreciation, depletion and amortisation
charge for period (76) (3,170) (305) -- (3,551)
Transferred to disposal group
held for sale (108) (7,401) (187) -- (7,696)
Translation difference (1) (84) (7) -- (92)
Closing net book amount 30th June
2017 1,697 42,776 3,729 -- 48,202
============ ============== ============= ====== ===========
Period ended 30th June 2017
Cost 3,125 273,230 12,884 336 289,575
Accumulated depreciation, depletion,
amortisation and impairment (1,427) (230,370) (9,148) (336) (241,281)
Translation difference (1) (84) (7) -- (92)
------------ -------------- ------------- ------ -----------
Closing net book amount 30th June
2017 1,697 42,776 3,729 -- 48,202
============ ============== ============= ====== ===========
Land & Oil & Plant &
Buildings Gas Property Equipment Other Total
$'000 $'000 $'000 $'000 $'000
----------- -------------- ----------- ------ ----------
Opening net book amount at 1st
January 2016 1,629 40,548 3,966 -- 46,143
Additions -- -- 24 -- 24
Depreciation, depletion and amortisation
charge for period (80) (2,058) (312) -- (2,450)
Transferred from disposal group
held for sale 279 15,988 226 -- 16,493
Translation difference (49) (1,457) (104) -- (1,610)
Closing net book amount 30th June
2016 1,779 53,021 3,800 -- 58,600
=========== ============== =========== ====== ==========
Period ended 30th June 2016
Cost 2,975 264,461 12,232 -- 279,668
Accumulated depreciation, depletion,
amortisation and impairment (1,147) (209,983) (8,328) -- (219,458)
Translation difference (49) (1,457) (104) -- (1,610)
----------- -------------- ----------- ------ ----------
Closing net book amount 30th June
2016 1,779 53,021 3,800 -- 58,600
=========== ============== =========== ====== ==========
Land & Oil & Plant &
Buildings Gas Assets Equipment Other Total
$'000 $'000 $'000 $'000 $'000
----------- ------------ ----------- ------ ----------
Year ended 31st December 2016
Opening net book amount at 1st
January 2016 1,629 40,548 3,966 -- 46,143
Additions -- 247 19 -- 266
Disposal -- -- (16) -- (16)
Impairment -- (2,420) -- -- (2,420)
Transferred from held for sale 399 26,361 831 -- 27,591
Depreciation, depletion and amortisation
charge for year (176) (8,722) (641) -- (9,539)
Translation difference 38 (2,473) 42 -- (2,393)
----------- ------------ ----------- ------ ----------
Closing net book amount 31st December
2016 1,890 53,541 4,201 -- 59,632
=========== ============ =========== ====== ==========
At 31st December 2016
Cost 3,095 275,081 12,815 336 291,327
Accumulated depreciation, depletion,
amortisation and impairment (1,243) (219,067) (8,656) (336) (229,302)
Translation difference 38 (2,473) 42 -- (2,393)
----------- ------------ ----------- ------ ----------
Closing net book amount 1,890 53,541 4,201 -- 59,632
=========== ============ =========== ====== ==========
(1) Impairment loss for one of the Cash Generating Units ("CGU") FZ 2 of $0.7 million was recognised during the period ended 30th June 2017. The recoverable amount was determined by estimating its fair value less costs of disposal. There were no impairment losses recognised in June 2016.
8 Intangible Assets
Exploration and
evaluation assets
$'000
At 1st January 2017 25,406
Translation difference (44)
At 30th June 2017 25,362
-------------------
At 1st January 2016 26,751
Translation difference (928)
-------------------
At 30th June 2016 25,823
===================
At 1st January 2016 26,751
Translation difference (1,345)
At 31st December 2016 25,406
===================
Exploration and evaluation assets related to the TGAL exploration well and field development plan.
9 Trade and Other Receivables
30th June 30th June 31st December
2017 2016 2016
Due within one year $'000 $'000 $'000
Trade receivables 1,967 2,767 2,849
Prepayments 1,001 870 1,140
VAT recoverable 506 4,009 1,315
Other receivables 184 1,941 145
3,658 9,587 5,449
========== ========== ==============
The fair value of trade and other receivables approximate their carrying amounts
10 Derivative financial instrument
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
Assets Assets Assets
Put Option-commodity price hedge 200 -- --
200 -- --
========== ========== ==============
A put option was implemented on 1st April 2017 which hedged a portion of the Group's production against downside movements in crude oil price below $40.00/barrel. (See note 2)
11 Assets held for sale
The West Coast assets and liabilities holding the Group's oil and gas interest in the Brighton Marine and Point Ligoure-Guapo Bay-Brighton ("PGB") fields owned and operated by its indirect subsidiary Oilbelt Services Limited have been presented as held for sale.
(a) Assets of the disposal Group classified as held for sale
30th June 30th June 31st December
2017 2016 2016
Property, plant & equipment $'000 $'000 $'000
---------- ---------- --------------
Net Book Value at 1st January
2017 -- 30,491 30,491
Disposal -- (1,926) (1,896)
Reclassified as property, plant -- (16,493) --
& equipment
Transferred from/(to) property,
plant & equipment 7,696 -- (27,591)
Translation difference -- (1,033) (1,004)
---------- ---------- --------------
Closing balance 7,696 11,039 --
========== ========== ==============
(b) Liabilities of the disposal group classified as held for sale
30th June 30th June 31st December
2017 2016 2016
Other provisions $'000 $'000 $'000
Decommissioning provision 1st
January 2017 -- 21,927 21,927
Reclassified as provision and -- (9,233) --
other liabilities
Transferred from/(to) provision
and other liabilities 12,398 -- (21,810)
Unwinding of discount rate -- 363 --
Disposal -- (112) (117)
Translation difference -- (775) --
---------- ---------- --------------
Closing balance 12,398 12,170 --
========== ========== ==============
In accordance with IFRS 5, the assets and liabilities held for sale criteria were met at the balance sheet date and the date that the Condensed Consolidated Financial Statements were authorised.
12 Deferred Income Taxation
The analysis of deferred tax assets is as follows:
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
Deferred tax assets:
-Deferred tax assets to be recovered
in more than 12 months (2,665) (2,375) (5,496)
-Deferred tax assets to be recovered -- -- --
in less than 12 months
Deferred tax liabilities:
-Deferred tax liabilities to be settled
in more than 12 months 2,503 3,161 2,927
-Deferred tax liabilities to be settled -- -- --
in less than 12 months
---------- ---------- --------------
Net deferred tax (assets/)liability (162) 786 (2,569)
========== ========== ==============
The movement on the deferred income tax is as follows:
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
---------- ---------- --------------
At beginning of year (2,569) 848 848
Movement for the year 2,407 (32) (3,417)
Translation difference -- (30) --
Net deferred tax (asset)/liability (162) 786 (2,569)
========== ========== ==============
Deferred tax assets and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net. The deferred tax balances are analysed below:
Movement 30th Movement Movement 30th
1st January June 31st December June
2016 2016 2016 2017
$'000 $'000 $'000 $'000 $'000 $'000 $'000
------------ --------- --------- --------- -------------- --------- ---------
Deferred tax
assets
Acquisition (33,436) -- (33,436) -- (33,436) -- (33,436)
Tax losses
recognised (31,257) 85 (31,172) (3,121) (34,293) -- (34,293)
Tax losses
derecognised 62,233 -- 62,233 -- 62,233 2,831 65,064
------------ --------- --------- --------- -------------- --------- ---------
(2,460) 85 (2,375) (3,121) (5,496) 2,831 (2,665)
============ ========= ========= ========= ============== ========= =========
Deferred tax Movement 30th Movement Movement 30th
liabilities 1st January June 31st December June
2016 2016 2016 2017
Accelerated
tax depreciation 14,374 -- 14,374 -- 14,374 (395) 13,979
Non-current
asset impairment (33,214) -- (33,214) -- (33,214) -- (33,214)
Acquisitions 19,580 -- 19,580 -- 19,580 -- 19,580
Fair value
uplift 2,568 (147) 2,421 (234) 2,187 (29) 2,158
------------ --------- --------- --------- -------------- --------- ---------
3,308 (147) 3,161 (234) 2,927 (424) 2,503
============ ========= ========= ========= ============== ========= =========
Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through future taxable profits is probable. Deferred tax assets of $2.8 million have been derecognised (2016: $3.1 million was recognised) based on unavailable future taxable profits. Deferred tax liabilities have reduced by $0.4 million (2016: $0.4 million) as the carrying values of property, plant and equipment and intangible assets which gave rise to the temporary differences have been written down to their recoverable amount.
The Group has unrecognised income tax losses amounting to $205.1 million which have no expiry date.
13 Share capital
Number of Ordinary Share premium Total
shares shares $'000
$'000 $'000
As at 1st January 2016 94,799,986 94,800 116,395 211,195
Share Capital Reorganisation 187,600,000 1,876 8,967 10,843
As at 30th June 2017 282,399,986 96,676 125,362 222,038
============ ========= ============== ========
The Company effected a Share Capital Reorganisation "SCR" on the 11th January 2017 whereby each existing Ordinary Share was divided and converted into one new Ordinary Share of a nominal value of $0.01 each and one Deferred Share of a nominal value of $0.99 each. The deferred shares have no voting or dividend rights and on a return of capital on a winding up has no valuable economic rights. Subsequent to the SCR the company raised $11.7 million before expenses by issuing 187,600,000 new ordinary shares at a placing price of GBP0.0498. The nominal value of the new ordinary shares are $0.01 each issued at a premium of $0.05 per share.
Share Capital and No. of Ordinary Deferred Share
Share Premium Shares Shares Shares Premium Total
$'000 $'000 $'000 $'000
As at 1st January
2016 1.00 94,799,986 94,800 -- 116,395 211,195
Share capital reorganisation 1.00 (94,799,986) (94,800) -- -- (94,800)
New ordinary shares
following the SCR 0.01 94,799,986 948 -- -- 948
Deferred ordinary
shares following
SCR 0.99 -- -- 93,852 -- 93,852
New ordinary shares
issued 0.01 187,600,000 1,876 -- -- 1,876
Ordinary share premium 0.05 -- -- -- 9,849 9,849
Cost of raising equity -- -- -- (882) (882)
------------- --------- --------- --------- ---------
282,399,986 2,824 93,852 125,362 222,038
============= ========= ========= ========= =========
Note: $:GBP rate
1.255:1
14 Borrowings
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
----------- ---------- --------------
Current -- 11,950 9,950
Non-Current -- -- --
----------- ---------- --------------
-- 11,950 9,950
========================= ========== ==============
Movements in borrowings are analysed as follows:
$'000
6 months ended 30th June 2017
Opening amount as at 1st January 2017 9,950
Repayment (3,500)
Compromised balance (6,450)
Closing amount as at 30th June 2017 --
--------
6 months ended 30th June 2016
Opening amount as at 1st January 2016 13,000
Repayments of borrowings (1,050)
--------
Closing amount as at 30th June 2016 11,950
--------
On the 23rd January 2017 the borrowings from secured lender Citibank Trinidad and Tobago Limited was repaid in full via the senior debt settlement agreement whereby an amount of $3.5 million plus interest was paid in lieu of full settlement on the outstanding balance owed of $10.0 million and the entire financial liability was extinguished. The compromised balance of $6.5 million was recognised within exceptional items through the Condensed Consolidated Statement of Comprehensive Income.
15 Convertible Loan Note ("CLN")
On 11th January 2017 the Company issued at a 50% discount 6,550,000 one dollar, unsecured CLNs. The notes mature 7 years from the issue date at their nominal value of $6.55 million plus quarterly accrued, aggregated and compounded interest at a rate of 7.25% per annum. As at 30 June 2017, the nominal value plus accrued interest amounted to US$ 6.8 million. Repayments or conversion prior to the maturity date can be made in certain circumstances:
-- Early Redemption
Subject to the settlement of the debts owed to the BIR and the MEEI (see note 2, 5 b & c, 15) the Company can before the second anniversary of the CLN's issue date, redeem all or a portion of the CLN giving 5 business days' written notice to the Noteholder. The Noteholders do not have the option to convert under this arrangement.
-- Redemption
The Company can, after satisfying the debts owed to the BIR and the MEEI or after two years from the issue dates (whichever is the latter), elect to redeem all the CLN before the maturity date. The redemption date in this scenario must not be less than 20 days from the Early Redemption Notice. The Noteholders can serve a Conversion Notice.
-- Conversion
Each Noteholder can after the second anniversary of the issue date serve a Conversion Notice. The principal amount plus the outstanding interest shall be converted into new fully paid ordinary shares at a Conversion Price of $0.08125.
The fair values of the CLN's liability and equity component were determined at the issuance of the note. The CLN recognised in the Statement of Financial Position was calculated as follows:
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
--------------- --------------- -------------------
Nominal value of convertible loan
note issued(1) 6,550 -- --
Issued at a 50% discount (3,275) -- --
--------------- --------------- -------------------
Fair value of convertible loan
note 3,275
Expenses incurred (245) -- --
--------------- --------------- -------------------
Fair value of convertible loan
note (net of costs) 3,030 -- --
Equity component (590) -- --
--------------- --------------- -------------------
Liability component at initial
recognition 2,440 -- --
Interest accrued(2) 289 -- --
--------------- --------------- -------------------
Closing balance 2,729 -- --
=============== =============== ===================
Notes:
1. The amount repayable on the CLN is the nominal value of $6.6 million plus accrued interest.
2. Interest is calculated by applying the effective interest rate of 23.7 % to the liability component.
For accounting purposes, the CLN was initially recognised and measured at its fair value of $3.3 million. The fair value of the liability component was determined using a market interest rate of 22.4% for an equivalent non-convertible bond at the issue date. The liability is subsequently recognised on an amortised cost basis until extinguished on conversion or maturity of the notes. The remainder of the proceeds is allocated to the conversion option and recognised in shareholders' equity net of transaction cost, and not subsequently remeasured.
16 Provisions and Other Liabilities
Non-Current: Potential Decommissioning Employee Total
Claim cost Retirement
Benefit
$'000 $'000 $'000 $'000
6 months ended 30th June
2017
Opening amount as at 1st
January 2017 -- 37,970 348 38,318
Unwinding of discount -- 829 -- 829
Transferred to disposal
groups held for sale (note
11) -- (12,398) -- (12,398)
Unwind of employee retirement
provision -- -- (348) (348)
Translation differences -- (53) -- (53)
---------- ---------------- ------------ ---------
Closing balance as at 30th
June 2017 -- 26,348 -- 26,348
========== ================ ============ =========
6 months ended 30th June
2016
Opening amount as at 1st
January 2016 1,270 18,561 -- 19,831
Unwinding of discount -- 483 -- 483
Transferred to disposal
groups held for sale
(note11) -- 9,233 -- 9,233
Translation differences -- (689) -- (689)
---------- ---------------- ------------ ---------
Closing balance as at 30th
June 2016 1,270 27,588 -- 28,858
========== ================ ============ =========
Year ended 31st December
2016
Opening amount as at 1st
January 2016 1,270 18,561 -- 19,831
Transferred from other payables -- -- 118 118
Transferred from liabilities
held for sale -- 21,810 -- 21,810
Revision to employee retirement
benefit -- -- 230 230
Unwinding of discount -- 1,577 -- 1,577
Release of provision (1,218) -- -- (1,218)
Decommissioning contribution -- (1,939) (1,939)
Translation differences (52) (2,039) -- (2,091)
-------- -------- ------ --------
Closing balance at 31st
December 2016 -- 37,970 348 38,318
======== ======== ====== ========
Current: Restructuring
Litigation claims Cost Total
$'000 $'000 $'000
6 months ended 30th June
2017
Opening amount as at 1st
January 2017 470 -- 470
Litigation claims compromised (364) -- (364)
Closing balance as at 30th
June 2017 106 -- 106
================== ============== ========
6 months ended 30th June
2016
Opening amount as at 1st
January 2016 -- 1,930 1,930
Translation difference -- (67) (67)
------------------ -------------- --------
Closing balance at 30th June
2016 -- 1,863 1,863
================== ============== ========
Year ended 31st December
2016
Opening amount as at 1st
January 2016 -- 1,930 1,930
Release of provision for
restructuring -- (1,870) (1,870)
Provision for litigation
claims 470 -- 470
Translation difference -- (60) (60)
------------------ -------------- --------
Closing balance at 31st December
2016 470 -- 470
================== ============== ========
17 Trade and Other Payables
30th June 30th June 31st December
2017 2016 2016
$'000 $'000 $'000
Non-current:
Due to BIR Interest on taxes(1) 970 -- --
Due to MEEI(2) 670 -- --
---------- ---------- --------------
1,640 -- --
========== ========== ==============
Current:
Trade payables 419 17,061 19,379
Accruals 1,503 2,320 2,677
VAT payable 129 184 187
Other payables 903 3,116 4,772
Due to BIR Interest on taxes(1) 775 4,944 6,994
Due to MEEI(2) 481 930
4,210 28,555 34,009
========== ========== ==============
Notes:
1. Due to the BIR is interest on taxes totaling $1.8 million. Principal taxes of $7.4 million is shown in note 5 b&c
2. Financial liabilities due to the MEEI of $2.1 million were substantially modified based on the new terms of repayment. This transaction was accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability of $1.9 million was recognised based on fair value (see note 2). During the period $0.7 million was repaid with a nominal value of $1.4 million outstanding at 30th June 2017
On 6th January 2017 the High Court of Trinidad and Tobago approved the unsecured creditors' proposal allowing the Group to settle its outstanding liabilities with unsecured creditors in accordance with the unsecured creditor settlement agreement. A total of $15.5 million in unsecured creditors and $ 5.2 million in interest on taxes due to the BIR were compromised in accordance with the unsecured creditor settlements see Exceptional items note 4.the settlement
18 Earnings per Share
Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of ordinary shares adjusted to assume the conversion of all dilutive potential ordinary shares.
Earnings - Total Weighted Average Earnings
Comprehensive Number Of Per Share
Income/(Loss) Shares '000 $
For The Period
$'000
Period ended 30th June 2017
Basic 23,780 270,936 0.09
Impact of dilutive ordinary
shares: -- 92,892 (0.02)
Diluted 23,780 363,828 0.07
----------------- ----------------- ---------------
Period ended 30th June 2016
Basic (1,526) 94,800 (0.02)
Impact of dilutive ordinary -- -- --
shares:
----------------- ----------------- ---------------
Diluted (1,526) 94,800 (0.02)
----------------- ----------------- ---------------
Year ended 31st December
2016
Basic (6,976) 94,800 (0.07)
Impact of dilutive ordinary -- -- --
shares:
Diluted (6,976) 94,800 (0.07)
----------------- ----------------- ---------------
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. The Company has two categories of dilutive potential ordinary shares: convertible loan notes and share options. The convertible notes issued during the year are considered to be potential ordinary shares and have been included in the determination of diluted earnings per share. This is calculated as the CLN nominal value $6.55 million plus accrued interest after the second anniversary $1.0 million divided by conversion price of $0.08125. Share options are considered potential ordinary shares. They have not been included in the determination of diluted earnings per share as the exercise hurdle would not have been met.
19 Contingent Liabilities
-- The farm-out agreement for the Tabaquite Block (held by Coastline International Inc.) has expired. There may be additional liabilities arising when a new agreement is finalised, but these cannot be presently quantified until a new agreement is available.
-- A Letter of Guarantee has been established over the PGB Block where a subsidiary of Trinity is obliged to carry out a Minimum Work Programme to the value of $8.4 million. The guarantee shall be reduced at the end of each twelve month period upon presentation of all technical data and results of the Minimum Work Programme performed. Trinity has submitted the technical data for reducing the performance guarantee and is still awaiting a response.
-- The Group is party to various claims and actions. Management have considered the matters and where appropriate has obtained external legal advice. No material additional liabilities are expected to arise in connection with these matters, other than those already provided for in these financial statements.
20 Events after the Reporting Period
On 11th August 2017 Trinity, entered into a binding sale and purchase agreement ("SPA") to sell its interests in the Brighton Marine and the PGB Exploration and Production Licences and related fixed assets to a subsidiary of AIM quoted Range Resources Trinidad Limited ("Range") for a cash consideration of $4.55 million. Together, the West Coast Assets constitute all of Trinity's West Coast Asset portfolio. The sale is subject to customary regulatory approvals, including Petrotrin and the MEEI. Under the terms of the transaction, Range has agreed to deposit the full consideration of $4.55 million into escrow to be released on completion. The transaction is expected to complete in the fourth quarter of 2017. The transaction is not considered to constitute a 'material disposal' which would trigger the conversion of the CLNs and the funds received will be used for general corporate purposes.
On 25th August 2017 Trinity announced the grant of options over 25,415,998 ordinary shares (representing 9.0% of the company's issued share capital) to the Executive Directors and other key employees under its Long Term Incentive Plan. The performance targets relating to these options are detailed in that announcement.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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