Trinity Exploration & Pr... Share Discussion Threads

[che7win] 24/11/2017 16:09

Oil rising is relentless, TRIN only goes up when oil is falling it seems!

[mark10101] 24/11/2017 13:02

Thanks Ross, certainly with the way the spread is atm they are look for sells rather than buys.

[mark10101] 24/11/2017 12:39

Is the offer still over 16p?

[mark10101] 24/11/2017 11:16

WTI looking keen to test $60 before Christmas. Hopefully all coming together very nicely for TRIN.

I ran some number from the West Coast Asset sale and at the time we sold at a premium to valuation as TRIN as a whole as stated in the RNS at the time and I was wondering how things have changed.

The sale cost per barrel of 2P reserves was $1.70 with TRIN as a whole at the time valued at $1.55. Now it is $2.80 (ignoring the 2C that will be converted to 2P)

Also the sale cost per barrel produced was $23,400 with TRIN as a whole being valued at $13,800 at the time. Now TRIN is valued at $22,200.

With oil approaching $60 we have a good chance of securing a sale again even if not at a premium.

[mark10101] 24/11/2017 11:04

WITJ, as ever a great post. Does look like December 1st is becoming a pivotal date. Given that TRIN management have been invited to sit on comitteses and it has not been rushed out, I hope for a well thought out and supportive new regime.

[whiskeyinthejar] 24/11/2017 10:36

I notice Trinidad's Select Committee on Energy meets December 1st. Finance minister Imbert is the chairman, so perhaps he'll have something to say then. It's webcasted live by the way.



This is what the Energy Committee said last December:

"The MEEI acknowledged that the SPT regime needed to be re-examined in terms
of its structure and thresholds. It was evident that the current arrangements with respect to the SPT rates was unprofitable for small operators to engage in oil production when its price crosses the US$50 threshold. In this regard, the Committee indicated that consideration should be given to SPTs benchmarked according to profit increases rather than price increases above US$50 only. "



The word "only" seems to suggest they recommended SPT will become an oil price AND profit tax. Makes sense to me as royalties ensure Trinidad always gets a cut of every barrel regardless of oil price.

Lots of oil companies don't pay profit taxes as they aren't profitable and some oil and gas companies had negotiated a lower royalties rate on some fields. For example, Columbus pays less than 10% royalties on Goudron:


So TRIN already pays 12.5% royalties but as Mark says this is being extended across all gas, condensate and oil from December 1st.

Fun fact. I notice that Imbert originally did an engineering degree at Manchester, but did law degrees afterwards. His last degree specialization in 2016 was Oil and Gas Tax Law from Robert Gordon Uni in Aberdeen. It shows he's keen anyway.

Anyway, I think maybe the topic of tax reform will at least come up at the Energy Committee next week.

[mark10101] 24/11/2017 10:11

Soupdragon, yes funny how Law is so down on us with virtually 0 net debt and we could possibly already be in a positive net debt position, but has a go at T&T for now backing RR with their history and debt....

[soupdragon55] 24/11/2017 09:05

LW425, probably because Range are massively in debt to the tune of $40m which might be due next year (definately due in 2020) and they can't pay.
Its a good decision by Trinidad as their interest is to protect the stream of royalties from oil producers, not let anyone come in and go bust in the short term.

Not all foreign investment are good for a country. Governments have to act in the interests of their people not companies.

[mark10101] 23/11/2017 22:19

Law I am sure we do not have the full picture given the amount of information contained in the RNS. In the same way as the East Coast asset sale fell through to the benefit of share holders it is quite possible this will be viewed in the same way going forward. 1st December could be an interesting day should they choose to announce the new tax regime as it is when the introduce the 12.5 tax on gas.

[lw425] 23/11/2017 22:07

i personally find it highly disturbing that the regulator blocked a perfectly legitimate disposal. selfish and quite alarming.

no respect for foreign investors

[mark10101] 23/11/2017 21:43

Law, have a look at page 8 of the September presentation, it is a graph Bruce was very keen to talk about at the London presentation. It show a steady rise and that was with half the activity that we are doing in this half of the year. They are aiming to hit 3000bopd without the wells from what I understand, and now we keep the West Coast Assets I would think we will hit it in the next few months given we are at 2700 in October compared to 2400 earlier in the year. I am happy for this pace of growth if it means we avoid dilution.

[markth126] 23/11/2017 21:41

I think someone wants to be in at a lower price then they'll be ramping the hell out of it!! This is an investment not a gamble! Not many aim companies like this one!!

[jbarcroftr] 23/11/2017 21:33

The directors are substantial shareholders so I doubt they are planning a rights issue I also think there are share options at 35 p

[lw425] 23/11/2017 21:05

No Mark. Without further drilling the existing wells will start to decline. Why do you think the Whitman Howard production forecasts were so low? They ar not conservative but take into account new drilling but also reduced flows on existing wells.

[mark10101] 23/11/2017 20:58

TRINs production is rising and we have approx 1.5 years we can grow production cheaply even if we srop the Q1 production. With yours and my view that oil is more likely to surprise to the upside than the downside why not pay all the debt off with ash flow and the 12m in the bank. Seems better than yours or the LN dilution. Who knows maybe we sell the West Coast assets early next year.

[lw425] 23/11/2017 20:43

Pay attention young man.

Loan notes convert at 6p.

Dilution would be at 10p + pay off state debt + bring forward 2019 drilling.

Otherwise there is NO reason to buy now and share price WILL drift down to low teens.

Production is NOT risk free and there are always decline risks that could not be forseen

then you would be up the creek without a paddle due to the DEBT

we dont want another EDG do we.

so clear it all, NOW.

get rid of it

i want a clean balance sheet. it's too messy right now

[mark10101] 23/11/2017 20:35

I love it, so we dilute ourselves deliberately by more than what the LN would do to avoid the effects of the LN.....

[lw425] 23/11/2017 20:28

Most retail muppets probably didn't even know the loan notes existed when the share price spiked to 20p

But they know now

You are welcome!

[mark10101] 23/11/2017 20:26

Law, you exhibit more signs of insanity with your mood swings....

I doubt many would have held through the 19p’s recently offered if they thought the probability was high that the LN’s would ever come into play. There is 7m of government debt left to go ( I expect 5m by end of Q4 if they continue to over pay) and with 12m in the bank we have options before ever allowing the LN to come into existence. Certainly if oil continues to motor on. Even the West Coast assets should bring in $100k for us in December, every little helps.

But hey that is investing, we have to take all of the information currently available and decide if we buy, sell or hold. Short TRIN if you can se something we can’t.

[lw425] 23/11/2017 20:21

ok this is what needs to happen.

the TRIN BOD need to appreciate that no institution will touch this with the loan notes hanging over the equity like a bad smell at 6p

so this is what i propose.

a LARGE placement at 10p. 120m new shares raising 12m.

this would enable TRIN to clear the state debt, pay off the loan notes and bring forward 2019 drilling.

so cap at 10p would be 40m but a debt free trin.

in the long run its best for all concerned.