Trinity Exploration & Pr... Share Discussion Threads

[zengas] 02/2/2017 15:09

Mirabeaus NEW 2017 discussion thread over here -

[aimmafia] 02/2/2017 15:02

Back ground sell going through

[wild billy boy] 02/2/2017 14:57

10.75p getting hit :)

[bjorn ironside] 02/2/2017 14:56

C'mon MMS

that 240K is delayed buy :)

[bjorn ironside] 02/2/2017 14:53

Up she goes again

[mirabeau] 02/2/2017 14:51

Hi everyone

Can we now use the other thread that I set up an hour or so ago. Nowt to do with me, it was a democratic decision

cheers

ps oh, ok cheers MAWC..obliged

[zengas] 02/2/2017 14:49

bones

there's no significant differences that I can see to Trin at $50/b and why I used the SA operators. This quarter the government is debating lowering taxes again and putting possibly a windfall tax on prices beyond that in this new environment.

All opex, royalties and over-riding royalties are included in the $18/b onshore and $29.50/b offshore breakeven and as far as i'm aware includes G&A. With much of the cash going into re-investment expenditure anyway, I don't see any sizeable taxation that is not inline with any of the other companies. As I said earlier Andes for example has a lot of debt to service of which the interest costs alone basically acts as an additional tax/drain on it's income.

Trin have managed to bring the cost per barrel breakeven down by over $34/b in the last 24 months which is a considerable feat so they are already more streamlined and efficient than before.

[mawc] 02/2/2017 14:36

Mirabeau - your buy at 10.36p is showing on ISDX (or whatever they are calling it this week). Along with a few other buys. TRIN.GB ticker

[aimmafia] 02/2/2017 14:14

Yes. Not many shares left at 10.5 - tick up is imminent. small resistance at 11 i should imagine

[okuta] 02/2/2017 14:14

Mirabeau - Good Man to You , well done , thanks for the new thread .

[runwaypaul] 02/2/2017 13:39

quite a few chunky delayed buys rolling through and fullask getting hit now

[1lilac] 02/2/2017 13:35

free float must be diminishing now.

[woodpeckers] 02/2/2017 13:19

many thanks Mirabeau, good of you.

[mirabeau] 02/2/2017 12:49

Big Fella

You can delete that article now I've put it into the header

Cheers

[wild billy boy] 02/2/2017 12:44

Nice 1 Mirabeau

Much appreciated

[the big fella] 02/2/2017 12:40

This also may be of interest to newbies:

The Share Talk article published on 18th January:


" 5: I note Trinity is still significantly undervalued compared to its peers in Trinidad, in one case nearly 10% on fundamental grounds with the debt issue significantly reduced. However will Trinity close this gap? "

(and the reply) -
" The market and investors need to be made aware of where Trinity stands today in regards to the balance sheet, asset base and management structure to make a strong differentiation from the past. This should help educate the market to enable a fair valuation to be had.
It is not for us to provide peer valuations but if investors look at metrics such as enterprise value (EV)/2P reserves and EV/production (bopd) the relative valuation gap and thus opportunity should be clear."

Too true in my opinion re looking at the valuation metrics. I think there are short termers in sub 3p and some overhang from the placing making a healthy profit hence the supply for now, but for how long.

Here's my answer to that question and why I've bought in.

282.5m shares @ 8p = £22.5m m/cap.

They have slashed breakeven costs on both off and on shore production.
Long term net debt is only $9.7m and short-medium term it's actually a net cash position of $4.5m but at current production it should be paid down easily.
Break even off shore $29.50/b and might fall some more (incl royalties, opex etc).
Break even on shore = $18/b.

Their quoted assumption was getting $45/b when the WTI oil price was $50/b.
Assuming 10% discount to the latest price - then we should be getting $50/b now.

Doing 1400 bopd onshore at $50/b less $18/b breakeven gives $32/b or $16.4m/yr.
Off shore at 1200 bopd at $50/b less $30/b breakeven gives $20/b or $8.76m/yr.
That's currently $48m revenue and $25m+ currently back after all costs so over $2m month.

If they progress that to the 3,000 bopd target pro rata from on and offshore that would take revenue to $60m and $30m/yr back at $2.5m month. Where can you get such an undervalued opportunity such as this that is already up and running to such a degree ?

Valuing 20.7 mmbo P2 at just $5/b = $103.5m (£80m).
19.8m 2C at $1/b = further $19.8m (£15m).

Valuation currently of £22.5m versus £95m of both production/reserves value = fair value of 33p. The valuation post restructuring is totally and unequivocally cheap – Where else do you get such significant revenue, net backs, production, both P2 and 2C discoveries so cheaply?.

As others have rightly said, there are some other oil Cos with lesser reserves, little or no production at values far in excess of Trin.

Imo it should be worth 25p which is a respectable m/cap of £70m considering the strong revenue generation and cash it is throwing off and still at a 25% discount to the per barrel valuation metrics used above.
If they eventually move the 2c to 2P at some future point you could add a further $4/b or $79m (£60m) value ie another 21p and an overall potential of around 54p longer term.

Looking down the road with the available cash being thrown off, what can it be put to use to ? Further production possibilities to go beyond 3,000 bopd and exploration for more reserves over and above the current 2P and 2C so could be a good turnaround here ?

If anyone remembers the old Emerald Energy restructuring, it was an eventual 25+ bagger from its restructured low and sold for £530m in 2009 so there could be lots to come here once this overhang is cleared.

[mirabeau] 02/2/2017 12:37

Jungmana

My pleasure

M

[jungmana] 02/2/2017 12:33

Mirabeau- thanks for the new thread. New TRIN definately deserves new thread.

[astorcourt] 02/2/2017 12:11

Tick up Mirabeau those who want new thread

[mirabeau] 02/2/2017 12:08

Would you like me to set up a new thread or are people happy with this one?

I know some people would like to see the calcs of Zengas included in the header

I don't mind, it's hardly Einsteinian in its complexity!