Trinity Exploration & Pr... Share Discussion Threads

[nocents] 06/5/2024 11:19

Actually I, and some others, certainly saw 100p and over as possible this year without the deal, if Buenos Ayres proved very productive if drilled 2024 or some or all of Galeota was sold. Particularly the latter seemed feasible.
So we did see over £1 this year as possible without this deal. But now we are 1.5 times what TXP is valued at ( i.e Trin at about 58p atm.) and assuming the deal is voted through which seems probable, we ride on the back of any Cascadura gas yield, already set up for storage and sale, and Coho-1. Not to mention Trin’s explorations and 150 re-workovers. TXP will be 20% diluted but reap far more than this from Trin’s cash, profit, tax exemption, and assets ( which can even be sold by TXP to yield free tax-exempt cash). Cost savings , inc. directors’ and 5 NED’s remuneration , will be significant.
TXP will have a M. Cap of over £100m which puts it in the sights of new larger investors. I think sensible Trinnies should see the synergies and growth potential of the new company when they vote.

[pavey ark] 06/5/2024 10:17

A few fairly random points this morning:

1. I take it that the largest shareholders were tipped that "something" was going on or TXP picked up on disquiet but either way this explains the lack of action by the major shareholders...... the board were smart enough (for once ) to see that their time was up.

2.The new shares are 19.9% of the TXP total .....at first I thought this a strange figure but I take it that companies can issue under 20% without shareholder approval.

3. Trying hard not to look at TXP drilling, financial forecasts etc but it looks like we have gone from a dull uneventful year with TRIN to a bit more activity/interest from TXP.
I think that most people have decided that this is a done deal so what happens if we get even a small amount of good news from TXP and the share price returns to 50p+......does TRIN go to 75p+ ?

We now have a self fulfilling prophecy here.....TRIN shares rise BECAUSE of smallish uptick in TXP which then makes the deal even more likely to go through.....no deal and the price falls back.
If the TRIN shares don't rise immediately on a rise from TXP then TXP holders will/should sell TXP and buy TRIN.

4. Where does this leave the TRIN price ?.....hmmm if, as everyone expects, the deal goes ahead the the question is....where does this leave the TXP price?

50p looks a rather easy target and if the upcoming results/updates are positive then 60p is very possible.......but TRIN is a bit of a steal so we have to add that in.

I could see the year end TRIN equivalent price being at or over 100p ........something none of us imagined possible before this deal.

[aqc888] 05/5/2024 00:15

Given the success of any merger is dependent on the integration of the businesses, one would hope txp management start spending more time in Trinidad than Calgary.

[che7win] 04/5/2024 22:08

TXP haven't raised funds in 1.5 years and can increase debt with steady cashflow which they agreed for their drilling plans this year. TXP shareholders aren't overly happy, I certainly wasn't when I initially read about this acquisition. Especially as we ramp up production quickly in Cascadura.I had exited TRIN and switched to TXP because I didn't like the off shore risk.I see this acquisition as timely for TRIN shareholders just as growth of production ramps up for TXP.However, I think the deal makes the enlarged groups prospects better together.If TRIN shareholders don't agree to this deal, the share price will fall back to pre takeover levels. TXP share price should recover as the market reacts to the upside prospects, this making the takeover price look better as we move into the following weeks/months.

[nocents] 04/5/2024 17:36

Curious comment.
I am well aware of the rise. And aware that we were at £1.25 just over a year ago. I was encouraging others to read thecrather positive analysis introduced by Ab. It is a fair intro to TXP.
Yes the board are in Calgary. Not a problem. Never has been. Now they can recruit in T and T. They used to drill the Alberta Sands pre 2013 and moved 100% to Trinidad.
You should know better than to trust an AIM director’s marketing propaganda-dear me. Just as well you weren’tvin BLOE or even 4D Pharma.! Both sets of directors convincingly drew millions of quid in and both were con-jobs. Don’t trust presentations …don’t we know that??
Having said that, Paul Baay is dynamic about growing Touchstone, always has been. But don’t believe any hype until it is produced. And even then look at JSE’s Montara storage mess-up.
Caveat emptor.
But I am positive.
I have a fortunate background with TXP but they are a company like anybother, and they will take the buttons off your shirt with fundraises if needed, and they have issue like Trin. Trin give them oil, cash and tax shielding. Wow! Good deal for TXP methinks.

[nocents] 04/5/2024 13:42

Great Oak Bloke analysis.
All Trinnies and Touchies should read and seriously digest it.
It is a long time since I have felt that I have been in a real investment case. I particularly like the FCF assertions and the much larger market cap. It does look like a win for TXP certainly , and to a degree for Trin. Still a long way until late September though.

[nocents] 04/5/2024 13:24

I would rather arrive where I would like to be( a fair share price. Not interested in the travelling or hoping. Would like to arrive at the destination of a decent share price asap!!! Sod the travelling or hoping. Arrival please!As quickly as it plummeted!! I know a fair bit about TXP 2014-2022. So I will be tuned in on plans and products. Destination asap . Hope? Yes, but the arrival is far more important. TXP shareholders have got a good deal and some may not know it as they don’t know the details!!
To get what Trin offers for that price. Bargain.
I expect considerable TXP voltility ‘twixt now and Sep. Roll on Sep. I say. Roll on gas pipelines from Cascadura. Roll on BA.
Sell Galeota TXP!!!

[andrewbyles] 04/5/2024 12:09

Here’s someone’s opinion:

[pavey ark] 04/5/2024 11:03

"A fair number of TXP holders wouldn’t mind if the deal doesn’t happen."

That would suggest that some TXP shareholders know very little about TRIN ........(I know very little about TXP.)

If nothing else happened TRIN would have $10m+ cash and 2650 bpd at the year end.....massive tax credits and Galeota.

I am assuming that the TXP shares that I then hold will rise in value when the obvious value is revealed.

I certainly don't want to get into a bun fight with TXP holders as I no longer care and I am not even going to look closely at any aspect of the company other than the share price......I have my sale targets set......"better to travel in hope than to arrive"

[nocents] 04/5/2024 10:52

It is a sign of weaknessto be influenced by trollop spoken on bb’s. They should have communicated anyway which was their failing!
If a company is influenced by free tittle tattle, well..woe is me. If you can’t stand the heat…….
The communication was clearly one-way as we never heard anything back.
Credit that they had an AGM in person though.
But my point is that they shouldn’t be reading bb’s if they don’t like what they read!!!
As per the takeover.
2 shares would have been more pari passu to the value, but it is what it is.
Seems likely to go through.
It will be of great interest as to what comes of the Cascadura gas flows. Don’t believe the hype. Wait for results.Q3 all being well.
I think it is a good deal for Txp. They are constany fund-raising so I don’t blame dilution-response from Txp holders. But it will provide decent cash( incl our dividend!?) , decent cash profit, decent bopd diversifying and almost tripling their own oil, Jacobin shallow production, BA assuming they still want to drill it.
I think we could see TXP share price volatility upmor down before Sep. but a lot depends on how PB handles the marketing, something he does make an effort with. We don’t want any big promises though. Trin and JSE are just 2 examples of how it can go wrong with driiling and storagge.

[pavey ark] 04/5/2024 10:51

I had a look and the TXP shareholders (ADVFN posters) are far from pleased with their management but the winder market simply had absolutely no faith in the TRIN management.

I intend to vote for the deal for the simple reason that I consider it the best way to realise the value in TRIN....and my shareholding.

Since the approach by TXP their share price has certainly outperformed TRIN (hardly difficult).
The G&A figure for TRIN is over $7m a year so a lump can be taken from this.

Regarding the TXP share price ..it responded to some good drilling results and was over 50p for most of April then fell away.....if ,as some TRIN holders are saying, this is a good deal for TXP then the TXP share price should respond.

Would like to see someone else coming in here but it looks like a done deal.

[nafafa] 04/5/2024 08:17

Orbit, that is a very good point. According to the presentation, it was TXP that approached Trin, not the other way around. We do not know how hard our Board negotiated but I would not be surprised if they threw in the towel, perhaps persuaded by the offer of generous redundancy payments. The negotiations deemed Trin to be valued at at least 75p a share, so that have should have established a share swap equivalent value floor to be applied when the deal goes through.

[orbit007] 04/5/2024 00:18

I will keep an open mind, until the vote and an eye on Truestone share price. It's in the shop window, so someone else may come in. I think you need to make the distinction between selling Trinity or its assets and the potential value that can be gained with whatever Touchstone are pedalling about upside with them...lets be clear, in the RNS info it says the share exchange ratio was agreed in Nov 23 when Touchstone share price was over 50p, that would be a materially higher value being ascribed to Trinity than the current share price of Touchstone implies.

I saw the decline rate has caused an issue with them recently on their prime asset, I don't really like how far their share price has fallen recently, I also think they pulled the trigger with that offer because they want to get it done before they lose anymore value. Trinity is a profitable company, it could continue on its own path..but that brings me to management....

I think our management have thrown the towel in, partly because they read this board and threw their toys out the pram at our critique of their performance. So we can't ignore the issue that they may just want shot at any price. Lets face it, this is being sold for £10m ex y/e forecast cash on current Truestone price, that seems a bit daft.

[andrewbyles] 03/5/2024 23:42

Whilst at first glance the takeover price is disappointing, the merger with Touchstone is a great deal for Trinity shareholders and represents our best chance to, in the first instance, recover our investment and, in the second, make a profit.

I imagine that it was difficult for Trinity to reach an agreement with Touchstone, but they’ve done well to do it. Whilst I appreciate that the directors will likely get a significant chunk of notice pay, they’ve voted themselves out of their jobs and, I suspect especially for Jeremy, have made the difficult decision to effectively vote many of their employees out of their jobs too (Trinity managed to make it through the coronavirus pandemic without making redundancies and were pleased about that; hopefully, though as the enlarged Touchstone expands production new jobs will be created).

The merger obviously makes sense. The cost savings alone could easily amount to $2 million per year (the salaries of 7 directors, the salaries of a several senior managers, the expenses of those employees, the costs of an HQ, the auditing and accounting costs, the lawyers’ fees, the brokers’ fees and the PR people’s fees). The combined group has a real opportunity to flourish and there’s a good chance that will soon be reflected in the share price (which is at four year low), especially as the merger will also coincide with Touchstone bringing on line additional production and some of Trinity’s assets finally being ready for exploitation.

I intend to vote for the merger.

[sleepy] 03/5/2024 22:45

Above post assumes that TXP have not said they won’t increase their offer (which I believe to be the case and is important under the Takeover Code)

[sleepy] 03/5/2024 22:38

Having invested for decades without having bought a small oil company i started to buy shares in TRIN this year. I am concerned about the competence of the TRIN board and that they may not have got a good/best deal for shareholders.

I think TRIN is subscale and can see logic in putting TRIN and TXP together (also very happy to accept a better offer from someone else)

My understanding is that what is currently proposed would result in TRIN shareholders having about 20% of the enlarged company. Is this reasonable/fair? TRIN shareholders could achieve a 25% interest with an offer of 2 TXP shares for 1 TRIN share.

The proposal requires a 75% vote in favour. Assuming 80% of shareholders vote then it could be defeated by holders of about 8 million shares. The largest shareholder has 4m shares. There may well be others who would support an attempt to improve the offer and with £2 million, not a large amount of money to some people, and the support of the largest TRIN shareholder then TXP could be forced to renegotiate their offer (or let it lapse which I sense that they would be reluctant to do)

[aqc888] 03/5/2024 18:43

Is everyone sure tax losses can be transferred to a different company?

[davidblack] 03/5/2024 16:50

Perenco probably already have targets on Galeota but maybe currently too close to their boundary with Trinity.

That’s not ideal as all you end up doing is proving up your neighbours ground if you strike oil.

Merging the two areas via a JV on new production, with Perenco taking the leadership, probably is something that they might want?

The problem for any junior company and certainly Trinity given it was a Tier 1 asset on their balance sheet is that it’s so very difficult to give up control on. Txp don’t have that issue.

[nocents] 03/5/2024 16:43

Perenco already produce from the same offshore block as Galeota. Galeota would be little effort for them. Not that they are interested or not, no idea.
Certainly would make sense, but business CBA perhaps. They are involved with bigger players like BP.
But who knows?

[davidblack] 03/5/2024 16:12

Perenco probably don’t want the onshore, much easier to have a quiet chat with TXP and do a JV where TXP chips in a modest amount to a bigger offshore area play.

That would make the Ministry much happier players with focus in charge.

A competent onshore player with the land assets and a serious offshore player running the show in the water.
Txp probably would be delighted too they now have a lot of ground onshore and two workforces to integrate.

[nocents] 03/5/2024 16:00

I have no proof nor evidence. But until there is a statement regarding a counterbid, it will all remain theory, hypothesis, even wishful thinking. Not that these things don’t happen and no disrespect intended as your argument is sound Orbit. In my experiences of takeovers, the effort involved often precludes a rival. The business CBA factor.
Perenco can afford it but can they afford to be bothered?

[orbit007] 03/5/2024 15:25

Taxation losses at 31 December 2022 available for set off against future taxable profits amounts to
approximately $227.5 million (2021: $234.6 million), with tax losses recognised of $24.9 million at the end of
2022. These losses do not have an expiry date and have not yet been confirmed by the Board of Inland
Revenue (“BIR”) or His Majesty's Revenue and Customs (“HMRC”). Tax losses carried forward by companies
engaged in petroleum production business in Trinidad and Tobago are restricted to set off against 75% of
the otherwise chargeable profits in a year.