Trinity Exploration & Pr... Share Discussion Threads

[wingspan] 15/11/2017 18:37

So we now sit precisely in the middle of the quarter...what is the average price of WTI from 01 Oct to today...at a time when we need all the cash we can get we are on the verge of being whacked by a step tax that makes literally no sense...(little bit like stamp duty thresholds in the UK on property). In part, this is why oil is only 11% of the barrel of oil equivalent output of Trinidad...the rest being gas where there is no SPT.

As Bruce said, 40,000 BOPD of native oil hits the Trinidad refinery (that has capacity for 160k(?))...the rest is imported. It makes no sense at all...but when you need every cent for your fiscal hole - what are you going to do?

I guess this is why Trinidad is looking to even up the field...preserves tax revenues, increases native use of the refinery without having to pay to import oil...while collecting royalties anyway on an increased pot. Possible win win...depends on political stomach to overhaul it.

[wingspan] 15/11/2017 18:24

Mark,

The tax is based on the calendar 3 month cycle. If the price of oil sold to Petrotrin during this period is above 50.01 (with approximately an 8% discount to WTI...hence 54.3ish) then the tax is applied to oil sold in the period...say WTI is an average of 55 dollars for the 3 months...here is what is applied: 55 X 0.92 = 50.6. 50.6 is greater than 50.01 = approx 20% tax (AIUI) with some discounts...so the equivalent price is 40.48 Dollars received once you have paid the tax.

It is of note reading this chat that you are largely unaware of this as a reality with the excited comments about oil going higher...be careful what you wish for.

I am a long term holder of TRIN - I am not de ramping...I just want you all to understand this.

[wingspan] 15/11/2017 18:13

Fidra - hat tip...

[wingspan] 15/11/2017 18:12

FSA - the company can make payments to the BIR and MEEI in line with their quarterly payments schedule while also overpaying this schedule...which is what they have done........the two do not contradict each other. You are either pretending to be thick while exploiting the ignorant or you really are just stupid...neither is palatable; my hunch is that you are -in fact- a bit of both...nasty and thick.

You are starting to run out of runway though...if you are not prepared to watch a fresh presentation by company management and narrowly interpret RNS's to maintain your position of ignorance then your line is not working anymore...because the overpayments ARE where the surplus cash has gone. OOOOoooooPS

AND btw...given that the Board and co are 45% of the company can you see them diluting themselves away at ultra low levels unnecessarily? The rub is that an intuitive capital raise is a good thing...can you tell me why? (I will give you a clue: it's something to do with the revaluation of reserves to 2P with a Board approved road to production on a sizable asset...)

If you really want to hit this board hard you are better off with the what ifs...what if oil sits around here for 9 months with the (what if?) SPT not overhauled, what if the Trinidad govt cannot afford to overhaul the SPT (though they can if they tax gas), what if they delay it because they are in the sweet spot...what if TRIN is selling oil for the next 9 months at 40 dollars a barrel with the hedge at 45 clean side-stepped? What if there is not sufficient money to pay off the CLN's and NAV falls from 33 p to 23 p following some savage 6 p a share dilution...now that is much more potent...Gasp!

Except for a number of things: the long term damage to Trinidad from killing home sourced barrels means they wont do that (what if they are stupid)...management is ready for SPT...its been managed before, Board has CLN's and Equity...management has no CLN's...SPT has been publicly stated as being overhauled, Oil is too volatile to sit on the nose of 55 dollars...up from there is good...down from there is good...and finally, increased production counters the effects of the SPT anyway...

If you want to scare people really then GO with the what ifs...

[mark10101] 15/11/2017 18:11

Also isnt the tax based on a 3 month period above $50?

[fidra] 15/11/2017 17:59

Actually when they spend 6m$ max drilling a well they get the money back in a year if it produces the 1000 bopd that Bruce says.And the margin stays the same 27%

[whiskeyinthejar] 15/11/2017 17:55

Dont forget there's allowances that they can set against SPT. So its not automatic at 50.01 sale price. SPT has a system of credits and discounts.

[fsawatcher] 15/11/2017 17:54

i off now coz got to cut lawn before dark

grass growin fast over here

[fsawatcher] 15/11/2017 17:52

" Also says trying to get rid of the speculators and get more long term holders."

you do know he mean gettin rid of yous

he want investors like artimes not pi

that why he gonna try and get placin done with ii

he want to drill impact wells coz it more excitin

spendin $25m every year to get extra 500bopd to pay bills not gonna get you past 20p

[wingspan] 15/11/2017 17:47

Mark,

I think that the reason the price may have weakened recently (other than motivated sellers) is because of the perverse nature of the SPT...as I am sure you know it is calculated on a calendar basis: so Oct Nov and Dec...if the price of WTI averages around 54.37 (assuming 8% discount) or above then ALL Trinidad oil companies suffer the tax...which equates (at it worst of 50.01) to selling oil at 50.01 * 0.8 = $40 a barrel.

[fidra] 15/11/2017 17:43

mark10101 I would agree with that.There may be no need,and if oil stays here or above this level.I doubt if they will need more than 6-8m$

He was probably being prudent and HONEST.

He says each well will cost about $5.0m/6.0m and expects to do 3 Each well when connected up will give 1000 bopd.

Also says trying to get rid of the speculators and get more long term holders.

[fsawatcher] 15/11/2017 17:40

mark1010101

i dont watch presentation that are not rns' coz they not allow to tell market stuff that aint been told to all

this is wot they say 2 days ago

" Liabilities continue to reduce with quarterly repayments to the Board of Inland Revenue and Ministry of Energy and Energy Industries continuing to be made in line with the ratified payment plan "

now yous sayin the company doin sommat different or yous not understand wot they tellin ya?

if they doin stuff one way but rns stuff nuther way , i fink that sommat for fca innit?

[mark10101] 15/11/2017 17:31

Fidra, I think Bruce would want to see the share price double before raising funds. 10% dilution to bring in $10-15m would be accepted by most if the CLN were paid off first. Having said that if oil ends up in the $60’s and the new tax reigime is more favourable for oil then I can’t see we would have a need to do a placing, just wait a couple of months and the money would come in.

[mark10101] 15/11/2017 17:23

FSA, given you are yet to share your wisdom of a better placed oiler, We can only assume the advice you give for free is the rubbish it appears to be.

If you have time watch this presentation, it clearly states government debt is now paid down to $7m.

Operating margins are only matched by the financial services and leaves our oil industry peers way behind.

[whiskeyinthejar] 15/11/2017 17:20

They aren't doing any "explo drillin". They don't need to explore, the oils already in place.

Bruce also said they have right to sell offshore oil abroad, but arent. I assume the transport costs etc don't make it worthwhile. But might help interest a potential buyer that they don't have to sell to Petrotrin.

[fidra] 15/11/2017 17:18

He also expects to pay down govt debt middle next year >Thats about a year early.

The close tonight was manipulated by those with an agenda,in the extended auction .

Prior it was trading at 17.5p

See where we are tomorrow

He talks of a small placing later next year or year after for offshore drilling.

[marvelman] 15/11/2017 17:16

Very good posts FSA. Forensic analytics. You are doing all our work for us. I am realising how lazy I have been but still cannot see whats not to like about this balance sheet and business model particularly with regard to their assets.You have made many of us think hard about this company and I have come out of the exercise feeling at least as confident as I was before you stirred the pot...many thanks.

[wingspan] 15/11/2017 17:15

Fsa - oops...have you worked your errors out yet? You is gonna get der

[fsawatcher] 15/11/2017 17:07

lowest close for 6 weeks

16.5p

last time closed at 16.5p woz oct 3rd 17

this goin backwards while oil goin forwards

that not sign you wants to see

sommat goin on ? ?

i fink placin coming coz they aint got cash to do explo drillin

placin at 12p to they mates sound alright ? ? ? ii's do like deep discount

[fidra] 15/11/2017 17:01

Bruce also states that there is at the moment no discount to the WTI for Calypso oil.

He also states that money due is paid 6 weeks after month end from the state oil company.So at the end of September they still have 6 weeks revenue to arrive.

[fsawatcher] 15/11/2017 16:59

they might be overpaying other debt but they aint over payin the gov debt

this is wot they told you 2 days ago

" Liabilities continue to reduce with quarterly repayments to the Board of Inland Revenue and Ministry of Energy and Energy Industries continuing to be made in line with the ratified payment plan "

can you read ??

'ratified payment plan'

you need to know wot is gov debt and wot is other debt

dont mix it together nows

that not goin to speed it up

[lw425] 15/11/2017 16:55

In summary.

Cash in bank did increase.

Debt now appears to be falling rapidly.

Production increasing without any new drilling.

$4.5m to come from sale of minor asset by year end

New drilling early in New Year.

New energy tax regime in Dec.

[markth126] 15/11/2017 16:47

Watch the presentation, they are overpaying the debt due!

[lw425] 15/11/2017 16:47

To be fair to Mark if the Nov presentation states state debt down to $7m that is good news as that is well ahead of schedule.

They must be making a fair wad each month and that's without any new drilling.

This explains where the excess cash has gone.

We also know they are getting $4.5m in a few weeks from the sale of the asset.

Nothing wrong with debt providing it gets paid off. In this case it appears to be paid off at a faster rate than I had anticipated.

If this trend continues then the equity will rerate. No point pretending otherwise.

Well done Mark!