Trinity Exploration & Pr... Share Discussion Threads

[wwick] 27/10/2019 17:31

"Yet the company still ended the quarter with less cash than anticipated." Please explain what was anticipated and by whom? Expectations are important and I have set mine out for year end. Thank you

[oilinvestoral] 27/10/2019 17:13

That's fair enough but the point being made was TRINs cash flow at 50.1/ bbl not 56/ bbl. also the capex assumption in Q3 are 2 months worth of capex and NOT quarterly CAPEX. I fully agree that at 56/bbl WTI TRIN should FCF but at 50/bbl the jury is out ! As per slide 6 of their presentation!

[wwick] 27/10/2019 17:02

Deep breath please. Eight wells "is a proxy" for a range of possible activities. In 2019 the range of activities includes 5 vertical wells and 1 HAW. Jeremy has said they will be generating FCF this year, earlier than previously hoped. Is this the case? Check yourself. - - At the end of 2018 cash balance was US$10.2 million. At the end of H1 2019 cash balance was US$17.8 million. That is a cash build of US$7.6 million over half a year with no drilling when the average WTI was US$56.3 and production averaged 3,008 bopd. - - What will H2 look like? We have Q3 results and so these along with H1 can be used to forecast H2, and the full year. Let us look in broad terms, from H1, cash generation was US$3.8 million per quarter. We could use this to forecast cash at the end of Q3, US$21.6 million, but we know that the actual cash was US$15.6 million due to the capex on 4 wells. The difference between our forecast (21) and actual (15) is US$6 million, or US$1.5 million on average per well (proxy). With two more wells in Q4 what will year end cash look like? Q3 cash + 3.8 (production) - 3 capex = US$16.4 million. - - - Is US$16.4 million (2019) greater than US$10.2 million (2018)? - - - Check! this could be misguiding if production is not sustained (cash build due to lack of investment). We have Q1,2 & 3 production = 3020 2996 2816. For Q4 we know October was 3017 and the target is to exit the year at 3400, so I approximate Q4 will be c. 3200. The average of the four quarters is 3010 (compared with 2871 for 2018). So in summary I expect cash to be up by many millions while investment has grown production year on year by more than 20% compared with 2017.

[nocents] 27/10/2019 16:37

Let’s try to drum up some enthusiasm for O and G tomorrow eh??

[nocents] 27/10/2019 15:44

That is true.Unlike with many AIM companies I can by experience vouch for the fact that you ain’t gonna be taken for a ride here.
The journey has been more than excruciating however. No exaggerration. So many come and gone.
Polishing my drone.
Cruise on order under pcp finance.
Getting desparate(?)

[oilinvestoral] 27/10/2019 15:09

There's a lot to be positive about in TRIN it's a shame the Trinidad government isn't helping but the company is delivering what they said they would.

[nocents] 27/10/2019 15:00

On a more humanistic and personal basis...I am really just trying to keep some balanced and realistic optimism going for the mid-term.
It seems investors generally want a quickie 5% plus and leg it these days.
This tunnel has been so damn long.
I’m holding the torch and looking for tge passage to daylight.

[oilinvestoral] 27/10/2019 14:47

Exactly Nocents You could do the Calculations yourself and then deduct the capex for 8 wells and see how that affects the cash position that will confirm if company is throwing off FCF at $50/ bbl Oil price. Or alternatively you could study the Q3 results . Remember drilling never started until fairly late in July. Yet the company still ended the quarter with less cash than anticipated. I know the weather had an impact but .....

[oilinvestoral] 27/10/2019 14:41

Nocents they are not ignoring capex ! Slide 6 includes capex

[nocents] 27/10/2019 14:41

Trin asserted strongly how FCF positive they were. I don’t see how they could have actively ignored capex inc. drilling program.
One would need to work out ave WTI for quarter...add $3 . Multiply by actual bbls sold and not stored.....deduct royalties + 25% ppt from Jan + 23%( ish) ave SPT minus credits due ....unemployment tax + insurances due + G and A .
costs . This would give a real number pre-driiling. But then they could be cash flow negative you say. What if the rising barrels from new drilling compensated? Jeremy is not one for getting things wrong. I am yes.
How can a company assert with such vigour that they are FCF positive even at $50.01 if it is after costs but before capex??
Who is right here?? Probably not me((?!) But I am hopeful

[oilinvestoral] 27/10/2019 14:07

Free cash flow is after operational expenditure and after capital expenditures. Free cash flow is the extra cash that can be used for dividends, share buybacks etc. If the oil price tanks they could reduce the number of wells and still be cash flow positive .If anything this situation clarified how atrocious SPT In Trinidad is !

[nocents] 27/10/2019 13:53

Well yes. But it means I had misunderstood the role of capex. I saw FCF as post capex and drilling.
October will see ave. Of about $54 a barrel + 3 makes $57. So far this quarter is not dreadful.
WTI Nov/Dec predicted $57-58.
Q1 2020 mid Jan should see 3,400 barrels year end.
I am confised still though as I was told the increasing barrels from drilling would keep Trin FCF positive regardless of drilling capex and WTI price.
Their FCF positive stance was heavily hesvily asserted at meeting. I would call it inintentionally misleading if it can turn out “ capex-negative”; through drilling at any stage.
I was there. I know how heavily the FCF positive under all( yes all) conditions was pushed. Drilling capex or not.
Being cash flow negative was not a feasible position. Drilling was already planned.
Confused.com.org.co.uk.gov

[oilinvestoral] 27/10/2019 13:35

It's not misleading! Their chart is very clear in fact, Not many companies are this open and honest with regards to FCF. Most companies like to report / provide profitability projections! I commend Bruce and TRIN for being this clear and open with us shareholders. You need to understand the difference between profit and free cash flow! Trin is profitable at even $40/bbl. However if they want to continue drilling 8 wells/ annum they will not be FCF positive at that oil price. I believe this is the reason why we haven't seen a dividend because they want to be able to continue drilling even if the oil price crashes! They are a very conservatively run company I hope that clears / clarifies it

[oilinvestoral] 27/10/2019 13:31

Otemple the other chart is "potential" ! So yes if they continue to drill HAW wells, cut operational costs, reform SBT etc etc etc we will become CF positive in the coming months or years even at 50.01/bbl! The proof of the pudding is in the eating mCash went down due to drillex (drilling expenditures). This confirms cash flow is negative at current prices while we are heavily investing. I just didn't realise the extent until I saw slide 6!

[nocents] 27/10/2019 13:16

Was confused.
Now lost.
I thought I had understood.
FCF positive under ALL circumstances cannot relate to WTI or before capex-drilling or not
Or why assert it at all. It would make it an irrelevant and improper and dare I say misleading assertion.

[otemple3] 27/10/2019 11:49

That is before the methods they are using to mitigate e.g. operational efficiency, scada, haw, hedging. It needs to be read in conjunction with the other chart

[oilinvestoral] 27/10/2019 11:39

Pavey ArkPlease see slide 6 in the presentation. It clearly shows in yellow -FCF . That means negative cash flow after investment. Clear as day light. Guys please correct me if I'm wrong. I hope I am wrong!

[oilinvestoral] 27/10/2019 11:35

Spell brook If those things in your list happens the share price will reach 35p or higher

[oilinvestoral] 27/10/2019 11:32

Nocents apologies for the late reply. You can be profitable and still cash flow negative (the 2 are NOT mutually exclusive)! TRIN is profitable at 50/ bbl but if they want to drill 8 wells per year while oil price is 50/bbl they will be cash flow negative. It's not me that's saying this ! It's in the presentation. I only discovered this a few days ago myself. They need oil to average between 55-60 to start generating FCF after CAPEX spend. You are absolutely right TRIN are very open and honest. They are very clear with regards to the investment case.

[mark10101] 27/10/2019 09:58

Exactly which is why we are not at the worst possible oil price for TRIN.

However as TRIN has stated they can pull on multiple levers to help manage these things. One of the assets TRIN has is its own storage. Our Q3 production was impacted (lower) by running up local storage, this was done at a time of low oil price.

[wwick] 27/10/2019 09:26

In H1 TRIN achieved $59.1 for their oil while WTI was $56.3. They achieve c. $3 per barrel over WTI.

[nocents] 26/10/2019 22:46

Oops double up
Sorry

[nocents] 26/10/2019 22:46

Well said PA. Hedging important. Trin doing all it can. Good company relationships down to grass roots workers it seems. Yes I have watched presentations many times and been to almost all public onez. Hence my questionning of being negative cash generative at $55. Not what Trin are asserting. They say cash generative at ALL prices.
Paranoia can breed paranoia. I get figures arong at times but it seems to me that Trin could not in the circumstances be doing anything better.
SPT agnostic . Verbatim. I would suggest now budget agnostic.
I am fighting a cloud of downward peessure of negativity.Not that I have always been innocent!
Spellbrook...posts appreciated.
My error has alwayys been selling too early. I would genuinely be rich if not.
SP. and PA I for one appreciate your posts at this lairy time.
Things can change on a sixpence.

[nocents] 26/10/2019 22:22

SP. at some stage send some or all of your suggestions to Trin.
Btw if I am guilty of emotionally conflicting posts...( I hope I haven’t) ...is unintentional.