Touchstone Exploration Share Discussion Threads

[dunderheed] 10/5/2024 11:21

Last paragraph 37301, I was just considering that nightmare scenario re 2P only last night?
So many are building increases in 2P due to Casca well succeses.
It would not surprise me if we did get a downwards revision but I would be very very disappointed.
I just hope we finally get clarification on plateau production rates and sound (mechanical / damaged well) reasons why potentially lower than initially forecast and nothing to do with other potential reservoir reasons, in the next set of financial reports. As ever all IMHO and DYOR.

[flyinghorse1] 10/5/2024 11:17

Baay is a deal maker, the last thing he will want is experts pointing out all the flaws/pros/cons. He gets away with it on land , but offshore is a whole different deal, you need your wits about you, knowledge of cost structures /implications and have competent people around you who can run these offshore assets.

Baay just sees the prize/glory with out much heed to to future difficties (IMHO)

Time will tell how it pans out.
Good luck to all

[flyinghorse1] 10/5/2024 11:13

Spangle-You can push 2P to 2C easily and it sits in 2C with little value, just a paper exercise.
You would likely value a company on predominantly 2P, so what you have to look at is the 2P producing,and especially the if the PUD(Proven undeveloped)is really 2P, or just a 2C imposter sitting in 2P.
There are also SPE/COGHE rules that state if it sits in 2P and not developed in 5 years it need to move to 2C, but very few companies do this. Dont think Trinity have drilled of the Galeota platforms since 2013 from memory so over 10 years ago.

I did /do have and issue with TXP 2P declarations despite being a shareholder (stated before few times) so yes the current TXP asset performances concerning and will that lead to a year end adjustment.

[dunderheed] 10/5/2024 11:12

Great posts both from FH1 and S93 and I am certainly erring with S93 on DD but I really do follow FH1's conscious/ subconscious implications regarding TXP "competences"?
Bizarrely I find myself thinking that I would not be surprised if either were right - except my expectation on normal acquisition works- as a minimum would be S93 is 100% right!
All IMHO and DYOR.

[flyinghorse1] 10/5/2024 11:00

If Trinity were land based only -great. The offshore component and the money needed to maintain and develop it further has been a lead weight round Trinitys neck (IMHO), so now the combined outfit (TXP/Trin) have to carry that weight forward unless they can unload it.
I expect a sustained low TXP share price for quite a while post acquisition , but happy to be proven wrong.
I think I am entitled to express my disgruntlement with this deal as a TXP holder , especially as we as share holders have no say in it(apparently).

[sirmark] 10/5/2024 10:57

Mkt cap of just £89mln is so disproportionate compared to the assets and revenues coming.

Also before the headroom on the finance deal got approved they would have run the numbers for the acquisition and they are more than happy...so there's some additional comfort that an objective eye has run and approved the numbers.

[spangle93] 10/5/2024 10:51

Flyinghorse -

Totally understand where you are coming from.

However, unless someone powerful in the background is guiding them (or making them an offer they can't refuse) with either a carrot or a stick, such that due diligence is perfunctory, it's beyond comprehension that the board would not consider the questions you ask in 37290, as well as plenty more.

If you really want a downside motivation, then Coho doesn't seem to be delivering on its independently assessed 2P reserves, Cascadura production is hardly the beacon of sustainability that Discord was expecting, and the last 3 appraisal wells have been successes on logs, only to (largely) fail when tested. Surely that changes the perceived chance of success on all the remaining 20+ targets in Ortoire?

I'm ambivalent on the deal - I think they are picking up the assets for a reasonable price, but have misgivings like yourself as to their competence to cut costs to achieve synergies (if they defend having a board of 9 people costing $1MM a year, excluding Mr Baay's more than generous remumeration, for a company with operations in one country and a market cap of £154MM, then they missed the management class on effective use of a sharp pencil!) or to realise and deliver benefits that TRIN couldn't.

Consequently perhaps spreading the risk across other assets with reliable production isn't to be discounted lightly


PS ref "I think Trinity just reduced the Galeota 2P."
Didn't their IER change the catagorisation of part of the resource to 2C, pending an economic plan of development. It's still not positive, but it's better than the field suddenly being deemed uneconomic or assessed as much smaller

[sirmark] 10/5/2024 10:49

81,825 mine before it prints :)

[dunderheed] 10/5/2024 10:47

Johnoxxx what does it matter, it maybe a negative view but it is pertinent and FH1 looks to have a wealth of experience in o&g stocks, IMHO.

To add to the points made though, does Galeota not get some other form of shallow waters relief under specific PSC model? Now I am dredging an old man's memory there, so probably got it completely wrong, ahem.

[johnoxxx] 10/5/2024 10:32

Great posts K.S and che7win, flying horse appeared out of no where and very very distressed and repetitive about this deal. Seems strange? By your posts Flying, I’m guessing you’re not a TXP holder?

[che7win] 10/5/2024 10:22

It's a great deal for TXP shareholders, I'm very happy.I expect the sum of the parts two accelerate our growth actually.Value accretive immediately, then more synergies over the next 6 months as costs are reduced.We get talents from TRIN and assets as 5hr broker has stated up as high as 300p.The TRIN balance sheet must be approaching 10m dollars currently and an extra 1m per month. Pays for itself in less than one year. We have combined acreage approaching 200,000 acres and many prospects across both companies.The we have the tax losses we can tap into. I see the value of the deal, so I'm very positive.

[king suarez] 10/5/2024 10:20

1) There has been a change to SPT such that the Trinity assets are only paying SPT when the realised oil price averages above $75

2) Trinity assets are currently producing $10m to $12m of cash flow (after sustaining capex) which means this deal pays for itself in around 2 years (not counting the c$5m net cash TXP also receive from TRIN)

3) The offshore stuff has been steadily producing c1k bopd for many years at v low decline, so is stable. Why does it need significant capital expenditure to keep doing so in your opinion? And why would it be close to abandonment if production is steady and profitable at the current oil price?

3) How large are the abandonment costs?

4) When do you see production stopping and why?

Thanks

[flyinghorse1] 10/5/2024 10:07

I think TXP need to ask themselves if they have examined the deal thru the lens of :
1)If Galeota is not commercially developable and:
2)The existing Galeota infrastructure and pipeline are slowly heading to large abandonment cost and:
3)West coast offshore is also heading toward abandonment
Is the deal attractive ?
As this is a very likely scenario, unless oil price heads to $150/bbl to prolong the life of these aging assets and SPT abolished, both unlikley I think.
IMHO/DYOR

[flyinghorse1] 10/5/2024 09:55

I find it hard to believe no TXP holders are up in arms about this proposed deal. Interesting on Trinity BB its mentioned that the share allocation ratio is 19.99% to Trin so that it apparently allows TXP to issue additional share capital with out getting shareholder approval. Fait au complet.

I have serious misgivings about the venture into East coast offshore (Galeota) and its implications to TXP.
They know not what they are doing , so it reinforces my overall view of TXP board, their decision making process,unfortunately.

Im pretty sure the majority of the Trinity holders will bail out of TXP (I dont see any time restriction on them selling stock) when the deal is done further depressing the TXP price, as most are currently bound in by agreements with Trin (ie being directors or past investors or board members), with no clean way of exiting the mess they got into.
IMHO/DYOR

[eggchaser] 10/5/2024 09:50

Simark - I can't see they would or could lie about their increased holdings so I agree with you around a market to market transaction... it's not like the shares have not been disposed of to facilitate this?

[sirmark] 10/5/2024 09:12

Agreed unless it was a market to market trade.

[retsius] 09/5/2024 16:42

How can they acquire those shares in a market that has shown nothing but sells for months.
No indication at all.

[sirmark] 09/5/2024 16:21

Missed your post zho

[sirmark] 09/5/2024 16:20

Edale Capital LLP and persons connected

Picked up an additional 2mln shares now holding 12mln over 5% ... follow the money, the institution now seeing the wall of cash on the horizon and wanting a piece of it !!

[zho] 09/5/2024 15:02

It looks as if Edale have increased from 4.3% to 5.1%.

[flyinghorse1] 09/5/2024 15:02

I guess Trinity are unlocking the value by passing the parcel to TXP.
Could not make it up.
Trinity directors and those giving unequivocal relinquishment of their shares realise the road ahead for Trinity is closed so must be delighted with this out come.
Im sure all their options etc will vest on change of control etc.
Whats not to like as a Trin holder, unless your a TXP holder , I suspect this will take a long time to unwind with a lot of indigestion on the journey before we see the TXP share price rise.
There will now be more opportunities now for P R Baay to make questionable decisions.
Lets just hope Perenco buy the whole lot once deal thru.

[awise355] 09/5/2024 14:24

Continuous selling is depressing

[dunderheed] 09/5/2024 11:57

Respectfully they've been looking for a jv for years and as FH1 mentioned there was talk of what I thought, was a potential, preferred partner type arrangement, with PetroFac (could have got that wrong as relying on memory lazily!) that didn't seem to come to anything but, I do (personalky, lol) feel there is potential with Galeota if you have the cash and more importantly, experience to lever on this, something which Trin may have been lacking? All IMHO and DYOR of course.

[che7win] 09/5/2024 10:55

I think a JV would be preferred way to unlock value for Galeota.

If Trinity management reckon there’s around 777 million barrels of oil in Greater Galeota and it’s producing around 1000 bopd, then it shows the upside. There’s further exploratory work which could increase this field size in future.

Nice to have a bolt on business with cashflow that we can use on Cascadura in immediate future.
Cashflow of $10-$12m 2023 after capes $18m capex.