Trinity Exploration & Pr... Share Discussion Threads

[mdw1] 02/8/2018 10:37

Couldn’t agree more MM; what a disgrace the BOD are!

[mount teide] 02/8/2018 09:56

melody - spot on - the start date for the production development drilling programme and a schedule with the proposed number of wells in each of the three half year intervals through to end of 2019 would be a start.

"Ten wells by end of 2019", commencing in H2/2018 (the first well could be spudded on 31st December 2018 and still see the company compliant with that statement! ) - is all the market has to work with at present - news wise this is pretty thin gruel considering the size of the funds raised and the discount to recent share price highs!

[melody9999] 02/8/2018 09:35

funds have been raised - we now need some positive news - perhaps on utilisation of funds - to get the share price moving in the right direction.

[whiskeyinthejar] 01/8/2018 14:17

I got a response to my complaint regarding allocation from Hargreaves. They say they will update me fully by the end of week. We'll see then.

[dunderheed] 01/8/2018 08:52

1626, yes I've got to admit wasn't sure if 1625 was being ironic lol!!

[mount teide] 01/8/2018 08:36

Most Nominated Advisors have no management experience whatsoever of the businesses they are supposedly acting as advisor for.

I have yet to come across a representative of a single Nominated Advisor who holds any professional qualifications in the industry/sector of the Companies they 'represent'.

Along with Auditors and PR Firms, Nomads are mostly self serving organisations who get paid extremely well by Company Boards with shareholders funds to largely work hand in glove with the Board for their mutual benefit - that the Regulator of the financial services industry is also funded by the Industry, from shareholders funds, only compounds the problem.

Investors should place NO faith whatsoever in ANY of them to look after anyone's interests but their own - for some limited protection equity investors should place a very heavy weighting on the experience, qualifications and career track record of the senior management of the Companies they are researching for investment purposes.


AIMHO/DYOR

[wwick] 01/8/2018 07:38

An example of how others communicate when raising cash: "having consulted with the Company's Nominated Adviser, consider the Subscription by the Related Party to be fair and reasonable insofar as Savannah's shareholders are concerned." - yesterday by Savannah Resources....if Carlsburg did capital raising...

[marvelman] 31/7/2018 15:08

That won't happen

[marvelman] 31/7/2018 13:53

Yes indeed Mark, 2Prismo has hit the nail on the head...certainly my aching head.

[2prsimo] 31/7/2018 13:13

The "lack of excitement" comes purely and simply from the fact that most TRIN holders have been mugged off by a recent significant placing!! How does one get "excited" if you paid 22-27p for your shares!!

[mark10101] 31/7/2018 11:54

Yet you have a significant investment in TRIN and can not grant the management, who significantly diluted themselves in this recent raise, any grace that they may too see the huge potential the current oil climate in T&T offers.....

I get the excitement at TXP, but I just don’t get the lack of excitement regarding TRINS position. There is a guy on the LSE TXP board that keeps stating cash is king, I totally agree with him for the period we now approach, TRIN now has significant debt free cash.

As the creator of this thread can we draw a line under the promotion of TXP on this board. We wish you luck and hope all T&T oilers flourish in the coming months. I hope your genuine and significant holding in TRIN allows you to focus on the possitive here which is what I am sure TRIN holders are more interested in discussing.

[mount teide] 31/7/2018 11:31

mark - I said I believed the TRIN placing/dilution was largely unnecessary considering the financial position and cash flow currently being generated.

Wall Street has thrown hundreds of billions of dollars at the US Shale Oil industry - telling it to continue drilling despite latest estimates suggesting it will require much higher oil pricing for a protracted period for it to be able to pay that money back. Why?


With production from an additional 7 wells between now and year end TXP should be generating circa 2,250 bopd entering 2019.

The intention for 2019 is to continue to substantially increase production from development drilling - a target of an additional 1,000 bopd in 2019 is very realistic - this would have the potential to generate considerable incremental free cash - circa $25M of cash flow in 2019 at present oil pricing.

If any of the 5 Ortoire prospects prove equal to Shell's nearby huge Carapal Ridge gas discovery, (never mind potentially better, as management's technical analysis leads them to suggest), then each prospect could be worth circa £100m to £150m minimum in the event of success using just $1.5-$2.0/boe. Each prospect at £125m would be worth circa 100p/share.

Regardless as to the success or otherwise of the Ortoire exploration programme, it is reasonable to assume that TXP should be able to grow to circa 4-5k bopd over the next 2-3 years from the planned development drilling programme, which is likely to also deliver the additional benefit of a substantial increase in reserves. In which circumstances a potential valuation of £100m m/cap minimum (80p/share) by 2020/2021 could well prove very conservative.

A single Ortoire success prospect in addition to the planned development of the existing assets/production could easily see a 180p target - close to a 10 bagger from today.

These calculations/projections/comments are based on $70-$75 oil - should oil average the $95 average seen between 2008 and 2015, then the potential returns could be considerably higher since most of TXP's costs are largely fixed.

The ultra high impact Ortoire exploration prospects are low cost and according to management's technical evaluation "low risk". TXP say that each of the 5 prospects has the potential to exceed the nearby Carapal ridge - that suggests from Jan 2019 TXP will be targeting 5X Carapal Ridge at 108 mmboe = ie in excess of 500 mmboe or $1b-$$1.5b (£700m-£1b) value at just $2-$3/boe.

TXP has an alternative option to a placing over the next 6-12 months - namely to reduce their production development programme to just 17 - 22 wells between now and the end of 2019 - this would still be close to double that of TRIN's recently announced development programme through to end of 2019.

My own view is that a TXP placing over the next 6 months is unlikely, particularly if the oil price continues to strengthen.

Would i support a modest placing to separately fund the ultra high impact, low cost Ortoire exploration programme - you bet! - the reserves potential of each of the 5 targets is so large, it would probably be a no brainer for most shareholders - particularly with T&T having the only world class LNG export terminal built in the Western Hemisphere in the last 40 years to 2010, but a 3-5 mile pipeline tie-in away.

At the end of the day investing is all about risk/reward - in a strong and rising oil price environment the economics strongly favour drilling over sitting on cash - as the still loss making US shale industry continues to demonstrate, by borrowing hundreds of $billions from Wall Street to continue drilling.

Last time i looked TXP with a net debt of circa £5.4m and a debt to capital ratio of circa 34% was below that of BP(38% with net borrowings of £40bn) and equal to the 34% average of the major multi nationals - some might say very good company for a business with a £25m market cap to be mirroring !


AIMHO/DYOR

[grannyboy] 31/7/2018 11:29

Well if no one took a chance there would be very little oil about..

[grannyboy] 31/7/2018 11:17

Well you have to see 'some' potential in these otherwise why would you be invested...but if you can't see that with just ONE of the Ortoire wells being a success, it could nearly reach the total production of trin..

[mark10101] 31/7/2018 11:04

Hi MT, interesting post, I can certainly see the interest in TXP, but find it hard how you see such blue sky for TXP yet not for TRIN who is in a superior position. All your excitement and lack of detailed analysis could be applied to TRIN. You appear relaxed about dilution in the coming months in TXP yet claim it has been disaterous here. The latest raise by TRIN was also done at near 1000% to the oil bear market low of 2017, just over 1 year ago!

As they say each to their own. I see massive potential in the coming months here at TRIN but risks at TXP. I am not going to post much going forward and look forward to the autumn where I think the recent raise at TRIN will be seen in better context.

[mount teide] 31/7/2018 10:23

Mark - some thoughts - First let me say I am no 'spreadsheet Phil', preferring the Warren Buffet investment approach of looking at the quality of the assets, experience and track record of the management and sector fundamentals.


IMO the principal investment risk/reward difference between TXP and TRIN over the next 12 months is the outstanding potential of TXP's Ortoire Block exploration prospects recently announced at the AGM and due to be drilled from January 2019.

Each of the 5 prospects has potentially very large reserves and are described as "low risk" and "world class" by TXP's technical management for the various reasons the COO and CEO covered in their AGM presentations.

In the event of success each prospect could be worth many, many multiples of the current TXP market cap.

With regard to development drilling - TXP is planning to drill by year end 2019 - up to 30 wells from Jan 2018 - mostly from existing cash flow. This is likely to more than double production. Whereas TRIN is planning to drill 12 wells during the same time period. I estimate TXP is currently generating gross annual revenue from each new well of $2.75m against a drill cost of circa $0.75m at current oil prices.

Placings: In the Copper sector post the H1/2016 recession bottom, 4 separate material placings to accelerate development and exploration drilling has not stopped a very large copper sector investment of mine - Asia Met(ARS) - from appreciating up to 1,500% in valuation - indeed the last placing earlier this year was taken in its stride at a 1,100% premium to the recession low. Having access to that placing money enabled Asia Met to fast track a number of work streams on its exceptional exploration assets that continue to add considerable value - underpinned by the double whammy effect of a recovering copper sector and strong copper market fundamentals.

In long term, highly cyclical commodity markets the post recession recovery stage(average 5-8 years with high volatility) was probably best described by Warren Buffet as: "A rising tide that lifts all boats" ie its easy to make money when you've survived a long brutal recession where you've cut your costs to the bone to survive, and now with a largely fixed price business, find the product you're selling has entered a new long term rising price environment generated by a half decade waterfall reduction in exploration drilling investment that has seen the Oil and Gas reserve replacement ratio in 2017 drop to an unprecedented 11% from a previous decade low of 50% in 2012!

IMO TXP is the mirror image of Asia Met in the O&G sector but about a year behind in its recovery - ask the highly knowledgeable ARS investors who filled their boots at circa 1-2p in late 2015/early 2016 about the impact of the risk of placings on their investment and the answer you would get back might be ; "it did't stop me from turning £10k into £100k-£150k with plenty more upside potential as the company continues to add value from exploration operations, as commodity market pricing strengthens further over the years ahead, before reaching its next cycle high probably around 2023-25"

What has changed regarding the TXP business since the oil market went into recession in 2013 and bottomed in H1/2016:

The long term, highly cyclical oil & gas market commenced a new recovery stage
Operating and employment costs have been dramatically reduced to survive
Targeting the deeper plays has seen a 100% increase in production per new well
Drilling costs have fallen by circa 42%
A production development inventory of 208 drill locations has been identified
Annual programme of 20-24 Recompletions fully offset annual field decline rates
5 ultra high impact, low risk exploration prospects targeting very large reserves have been identified on the Ortoire Block
Oil price has risen well over 100% since the Q1/2016 recession lows.
Most Multi National and National oil companies have cut O&G exploration budgets to the bone over the last 5 years.
2017 was yet another record low year for discovered conventional volumes globally and the replacement ratio hit an all time low of just 11%.

TRIN has experienced many similar macro and operational changes/long term benefits - the main difference BEING that TXP has stolen a march over TRIN and the other T&T on-shore producers with the scale and pace of its post recession production development programme and the hugely transformational potential of its near term ultra high impact, low risk, low cost on-shore exploration drilling programme.

By comparison I see TRIN as a low risk investment offering very good upside potential over a 2-3 year outlook - whereas I see TXP and ARS as slightly higher risk investments but with totally transformative near term development and exploration upside potential.

All three businesses have excellent management with a proven track record of success operating in long-term, highly cyclical markets that are still in the early stages of recovery - imo this hugely underpins the investment case.

Asia Met's management rode the last commodity cycle recovery/boom stage in 2000-2008 via a junior miner called Oxiana Metals that they developed from a £3m market cap South East Asian and Australian based minnow at the recession low point in 2000, into a company that was valued at $6bn on takeover some 7 years later. They are following exactly the same model with Asia Met - as the CEO said recently "what we are doing is not rocket science" - I increasingly see TXP as the Asia Met of the small cap oil and gas sector.

Kaz metals is another commodity sector example - fell 95% during the recession through to H1/2016, has since risen nearly 1,100% at the recent peak - the good news for Kaz shareholders? Today it is still valued at less than half it's inflation unadjusted previous commodity cycle peak in 2010.

Moral of the story - NEVER UNDERESTIMATE THE INVESTMENT RETURN POTENTIAL OF LONG TERM, HIGHLY CYCLICAL MARKETS AFTER THEY ENTER A NEW RECOVERY STAGE!



AIMHO/DYOR

[marvelman] 31/7/2018 08:47

MT...good to know and thank you for your candour

[mark10101] 31/7/2018 08:31

MT, given you have in-depth knowledge on TRIN and TXP can you lay out your risk/reward analaysis given TRIN and TXP now have the pretty much the same enterprise value (£33m TXP against £40m TRIN). My understanding is TXP have less reserves and 1000bopd less production. Also as the enterprise value suggests they have debt.

It seems to me that significant risk lays ahead for TXP at this level, certainly for those who find it hard to stomach fund raising. TRIN have a $30m war chest at a time when significant opertunities are forecast for the T&T environment.

[mount teide] 31/7/2018 08:14

marvelman - 'May I ask if you are still holding a position in TRIN?'

Recently reduced to 700,000 shares - will be retaining this as a core long term holding.

As posted previously, while I believe TXP offers better risk/reward over a 12 month view - if TXP were not around, then TRIN would be my principal small cap oil investment for the next 2-3 years - during which I believe TRIN will do very well.

AIMHO/DYOR

[nafafa] 31/7/2018 07:42

Except the business is now de risked and can bring forward investment. Might even get to pick up the balance of shares I was after for 15p, or less, which would be an added bonus!