Trinity Exploration & Production Interim Results

RNS Number : 9024F

Trinity Exploration & Production

27 September 2024

 

 

This announcement contains inside information as stipulated under the UK version of the Market Abuse

Regulation No 596/2014 which is part of English Law by virtue of the European (Withdrawal) Act 2018, as

amended.  On publication of this announcement via a Regulatory Information Service, this information is

in the public domain.

 

27 September 2024

 

Trinity Exploration & Production plc

("Trinity" or "the Company" or "the Group")

 

Interim Results

 

 

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago ("T&T"), announces its unaudited interim results for the six-month period ended 30 June 2024 ("H1 2024" or "the Period"). 

 

Update on takeover offers

 

On 1 May 2024, Trinity and Touchstone Exploration Inc (TSX, LSE: TXP) ("Touchstone") announced that they had reached agreement on the terms of a recommended all share offer, pursuant to which Touchstone would acquire each Trinity share for 1.5 new Touchstone Shares, to be effected by means of a Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 ("scheme of arrangement") (the "Touchstone Offer").

 

On 2 August 2024, Trinity and Lease Operators Limited ("Lease Operators") announced that they had reached agreement on the terms of a recommended all cash acquisition, pursuant to which Lease Operators would acquire each Trinity share for 68.05 pence in cash (the "Acquisition"), also to be effected by means of a scheme of arrangement.  At the same time, the Trinity board of directors withdrew its recommendation of the Touchstone Offer as it considered the Acquisition to be superior and in the best interests of Trinity Shareholders.

On 25 September 2024, the Court granted Trinity permission to formally withdraw the scheme of arrangement relating to the Touchstone Offer and, as a result, the Touchstone Offer lapsed with immediate effect.

The Acquisition remains subject to certain other conditions, including the approval of Trinity Shareholders at a Court Meeting and a General Meeting and the Court's sanction of the Scheme at a Court Hearing.

A further update, including the timetable for the Acquisition will be made in due course.

 

H1 2024 Operational Highlights

 

H1 2024 saw a production decline of nine percent (9%) against H1 2023 which is within the expected natural decline range for mature fields in the absence of development drilling activities. Production was supported with a programme of recompletions and workovers. 

·    H1 2024 average net sales volume was 2,595 bopd (H1 2023: 2,861 bopd).

Sales volumes were supported by five recompletions (H1 2023: three) and 51 workovers and reactivations (H1 2023: 62) undertaken during the Period. Swabbing production continued across the Onshore and West Coast assets and contributed approximately ten percent (10%) of Trinity's production. A program of six heavy workovers is scheduled for the second half of 2024. 

·    The decrease in production between H1 2024 vs H1 2023 was largely a result of the failure to return a large producing Trintes well to potential production in July 2023 due to operational issues. A workover was conducted on this well in February 2024 to investigate and optimise production, but ultimately the workover was unsuccessful.  A further workover of this well is being planned for H2 2024.

·    The production decline from Onshore Assets was attributed to three major wells being shut-in during H1 2024 due to mechanical/wellbore problems. Workovers were carried out during the period to restore production, but they have proved unsuccessful to date.  Further workovers are planned for H2 2024.

·    The Jacobin exploration well drilled in 2023 was recompleted in the Lower Forest horizon in May 2024 following disappointing production results in the deeper Cruse horizons. The well was placed on pump and is currently producing around 11 bopd.

·    The ABM-151 well in the Brighton Marine block, offshore the West Coast of Trinidad, which was returned to production on 21 March 2023 following an extensive refurbishment of surface facilities and the installation of remote surveillance technology, has maintained production with no significant decline between H2 2023 (106 bopd) and H1 2024 (109 bopd). Trinity continues to monitor this well closely as this well has a high risk of sand production.

 

H1 2024 Financial Highlights

 

·    Average oil price realisation of USD 71.5/bbl for H1 2024 (H1 2023: USD 65.2/bbl).  During the Period, the realised price that the Company received for Onshore and West Coast oil sales was at an average discount of 13.9% to Brent; less than the long-term average discount of approximately 15%.  East Coast oil sales are made under a fixed arrangement that is a 15% discount to Brent.

·    The Company remains unhedged.

·    Cash balance of USD 8.0 million as at 30 June 2024 (YE 2023: USD 9.8 million) reflecting a combination of stable operating cash generation net of finalisation of 2023 undisputed Jacobin costs paid in 2024, limited investment in capex, and cash outflows of USD 1.7m to support the ongoing acquisition.

·    Stable net cashflows generated from operating activities as at H1 2024 USD 4.8 million (H1 2023: USD 6.3 million).

·    Revenues of USD 33.8 million were generated in the Period (H1 2023: USD 33.8 million) driven by lower sales production offset by higher oil prices.

·    Cash operating costs of USD 23.2/bbl (H1 2023: USD 20.1/bbl) mainly driven by the overall impact of lower sales production (2,595 in H1 2024 vs 2,861 in H1 2023).

·    General and administrative costs of USD 6.8/bbl (H1 2023: USD 6.3/bbl) mainly due to the impact of lower sales production.

·      Average operating break-even for H1 2024 was increased at USD 42.6/bbl (unaudited) (H1 2023: USD 34.5/bbl) resulting from a slightly higher operating cost and lower sales volume.

·    The Group had drawn borrowings (overdraft) of USD 3.0 million at 30 June 2024 (YE 2023: USD 4.0 million).

 

2024 Guidance

The sales guidance range for 2024 has been reduced to 2,450-2,550 bopd.

 

 

 

Enquiries

Trinity Exploration & Production Jeremy Bridglalsingh, Chief Executive Officer Julian Kennedy, Chief Financial Officer Nick Clayton, Non-Executive Chairman	Via Vigo Consulting
SPARK Advisory Partners Limited (Nominated Adviser) Mark Brady James Keeshan	[phone]
Cavendish Capital Markets Limited (Broker) Leif Powis Derrick Lee Neil McDonald	[phone] [phone]
Vigo Consulting Limited Finlay Thomson Patrick d' Ancona	[e-mail] [phone]

 

 

 

About Trinity (www.trinityexploration.com)

Trinity is an independent oil production company focused solely on Trinidad and Tobago.  Trinity operates producing and development assets both onshore and offshore, in the shallow water West and East Coasts of Trinidad.  Trinity's portfolio includes current production, significant near-term production growth opportunities from low-risk developments and multiple exploration prospects with the potential to deliver meaningful reserves/resources growth.  The Company operates all of its licences and, across all of the Group's assets, management's estimate of the Group's 2P reserves as at the end of 2023 was 12.91 mmstb.  Group 2C contingent resources are estimated to be 38.68 mmstb.  The Group's overall 2P plus 2C volumes are therefore 51.58 mmstb. 

 

Trinity is quoted on AIM, a market operated and regulated by the London Stock Exchange Plc, under the ticker TRIN.

 

Qualified Person's Statement

The technical information contained in the announcement has been reviewed and approved by Mark Kingsley, Trinity's Chief Operating Officer.  Mark Kingsley (BSc (Hons) Chemical Engineering, Birmingham University) has over 35 years of experience in international oil and gas exploration, development and production and is a Chartered Engineer.

 

Disclaimer

This document contains certain forward-looking statements that are subject to the usual risk factors and uncertainties associated with the oil exploration and production business.  Whilst the Group believes the expectation reflected herein to be reasonable in light of the information available to it at this time, the actual outcome may be materially different owing to macroeconomic factors either beyond the Group's control or otherwise within the Group's control.

 

Publication on website

In accordance with Rule 26.1 of the Takeover Code a copy of this announcement will be available free of charge, subject to certain restrictions relating to persons resident in Restricted Jurisdictions, on the investor relations section of Trinity's website at https://trinityexploration.com/investors/lease-operators-offer/ by no later than 12.00 noon (London time) on the business day immediately following this announcement. The content of the website referred to in this announcement is not incorporated into and does not form part of this announcement.

 

Summary of 2024 half-year performance

 

OPERATIONAL REVIEW

The Group achieved net sales of 2,595 bopd in H1 2024 (H1 2023: 2,861 bopd). Investment in production-related activities such as recompletions, workovers and swabbing, together with already automated wells enabled the Company to limit the decline in first half-year production to 9%, when compared to H1 2023, which is broadly in line with the expected longer term annual decline rate.  

Annual and Half-Year Sales by Region (bopd)

	12m 2023	H1 2023	H2 2023	H1 2024
Onshore	1,495	1,512	1,478	1,343
East Coast	943	1,011	876	867
West Coast	353	338	367	385
Total	2,790	2,861	2,721	2,595

 

Onshore operations

·    H1 2024 average net sales were 1,343 bopd, a 11.2% decrease on 2023 (H1 2023 1,512 bopd). This movement was attributed to expected natural decline, coupled with reduced workover activity and deferral of volumes due to unplanned disruptions to electrical power supplies (outside Trinity's control), which caused temporary shut-in for certain key wells in Q2 2024 and the loss of three major wells due to mechanical/wellbore problems. Trinity progressed various initiatives in H1 2024 to mitigate, where possible, disruptions to electrical power supplies.

·    A technical study of circa 250 inactive wells was conducted during the first two months of 2024 resulting in an increased swab well stock in H1 2024.  Work programmes are being reviewed for the upcoming budget cycle to allocate funding for implementation of the recommended work.

A total of 39 workovers and reactivations were completed in H1 2024 (H1 2023: 54) in conjunction with five recompletions in H1 2024 (H1 2023: three).

The H2 2024 work programme involves the progression of five heavy workovers (recompletions, sand controls, casing repairs) and ongoing base management via workovers, reactivations and swabbing across all onshore fields.

East Coast operations

·    H1 2024 average net sales were 867 bopd (H1 2023: 1,011 bopd) a 14.2% decrease.  The decrease in production sales was largely a result of the failure to return a large producing well to production in July 2023. Comparing H1 2024 sales with H2 2023 shows minimal decline.  A total of seven workovers were undertaken during H1 2024 (H1 2023: seven workovers).

The H2 2024 work programme will include routine workovers and reactivations.

West Coast operations

·    H1 2024 average net sales were 385 bopd (H1 2023: 338 bopd).  The 13.9% increase in sales was the result of additional swabbing resources which increased swab production and stabilised the field's production.  One workover was conducted during this period (H1 2023: one workover).

H2 2024 work programme is expected to include continued optimisation of swab production and ongoing base management via workovers.

H1 2024 Key Performance Indicators

 

The Group was profitable in H1 2024 under Alternative Performance Measures ("APM") and IFRS basis.  Higher oil price realisations offset by lower sales volumes resulted in no change in Revenues to USD 33.8 million (H1 2023: USD 33.8 million) and a 11% decrease in Adjusted EBITDA (Note 19 in the financial statements) to USD 9.3 million (H1 2023: USD 10.4 million). The Period-end cash balance was USD 8.0 million (H1 2023: USD 11.3 million) lower than the opening position at the start of the Period of USD 9.8 million.  A summary of the period-on-period operational and financial highlights are set out below:  

		H1 2024	H1 2023	Change %
Average realised oil price1	USD/bbl	71.5	65.2	10
Average net sales2	bopd	2,595	2,861	(9)
Revenues	USD million	33.8	33.8	0
Cash balance	USD million	8.0	11.3	(29)
IFRS Results
Operating Profit before SPT	USD million	6.1	5.8	5
Total Comprehensive Income	USD million	3.1	0.7	347
Earnings per share - diluted	USD cents	7.9	1.7	363
APM Results (APM measures exclude non-cash items)
Adjusted EBITDA3	USD million	9.3	10.4	(11)
Adjusted EBITDA4	USD/bbl	19.6	20.1	(3)
Adjusted EBITDA margin5	%	27.4	30.8	(11)
Adjusted EBIDA after Current Taxes6	USD million	8.6	6.7	29
Adj. EBIDA after Current Taxes per share - diluted	US cents	21.6	16.9	28
Consolidated operating break-even7	USD/bbl	42.6	34.5	23
Net cash plus working capital surplus8	USD million	12.5	10.9	15

 

Notes:

1.     Realised price: Actual price received for crude oil sales per barrel ("bbl").

2.     Average net sales: This refers to average sales attributable to Trinity per day for all operations; lease operatorships and joint ventures.

3.     Adjusted EBITDA: Operating Profit before Taxes for the period, adjusted for Depreciation, Depletion & Amortisation ("DD&A") and other non-cash expenses, namely Share Option Expenses, Impairment of Financial Assets, FX Gains/Losses and Fair Value Gains/Losses on Derivative financial instruments.

4.     Adjusted EBITDA (USD/bbl): Adjusted EBITDA/sales volume over the Period.

5.     Adjusted EBITDA Margin (%): Adjusted EBITDA/Revenues.

6.     Adjusted EBIDA after Current Taxes: Adjusted EBITDA less Supplemental Petroleum Taxes ("SPT"), Petroleum Profits Tax ("PPT") and Unemployment Levy ("UL").

7.     Group operating break-even: The realised price/bbl where the Adjusted EBITDA/bbl for the Group is equal to zero.

8.     Net cash plus working capital surplus:  Current Assets less Current Liabilities (other than Derivative financial asset / liability and Provision for other liabilities).

 

FINANCIAL REVIEW

 

Income Statement Analysis

		H1 2024	H1 2023	Change %
Production
Average realised oil price (USD/bbl)		71.5	65.2	10
Average net Sales (bopd)		2,595	2,861	(9)
Statement of Comprehensive Income		USD'000	USD'000	USD'000
Operating revenues		33,804	33,754	50
Operating expenses excluding non-cash items and SPT		(24,533)	(23,367)	(1,166)
Operating profit before non-cash items and SPT		9,271	10,387	(1,116)
DD&A		(2,984)	(4,472)	1,488
Other Non-Cash Items		(225)	(87)	(138)
Operating profit before SPT		6,062	5,828	234
SPT		--	(3,247)	3,247
Operating profit before Impairment, Exceptional items and Decommissioning reduction		6,062	2,581	3,481
Impairment		(398)	--	(398)
Exceptional items		(1,714)	(371)	(1,343)
Decommissioning reduction		826	--	826
Operating Profit after Exceptional items		4,776	2,210	2,566
Finance income		13	25	(12)
Finance cost		(1,001)	(1,124)	123
Profit Before Taxation Income Taxation expense		3,788 (662)	1,111 (428)	2,677 (234)
Profit After Taxation		3,126	683	2,443
Total Comprehensive Income for the period
Exchange differences on translation of foreign operations		1	(6)	6
Total Comprehensive Income		3,127	677	2,449

 

Operating Revenues

Operating revenues of USD 33.8 million (H1 2023: USD 33.8 million), unchanged.

 

Operating expenses (excluding non-cash items)

Operating expenses (excluding non-cash items) of USD (24.5) million (H1 2023: USD (23.4) million) comprised:

·    Royalties of USD (10.3) million (H1 2023: USD (9.7) million), mainly due to higher average oil prices.

·    Production costs ("Opex") of USD (11.0) million (H1 2023: USD (10.4) million), increase driven by additional safety measures on the East Coast which included vessel stand by response, and swabbing activities.

·    G&A expenditure of USD (3.2) million (H1 2023: USD (3.3) million), mainly due to a reduction in business travel costs.

 

Non-cash operating expenses

Non-cash operating expenses of USD (3.2) million (H1 2023: USD (4.7) million) comprised:

·    Depreciation, Depletion and Amortisation ("DD&A") charges of USD (3.0) million (H1 2023: USD (4.5) million).

·    Share option expense USD (0.2) million (H1 2023: USD (0.3) million).

·    Foreign exchange gain USD 0.0 million (H1 2023: USD 0.1 million).

 

Operating Profit Before Supplemental Petroleum Taxes ("SPT")

The operating profit before SPT for the Period amounted to USD 6.1 million (H1 2023: USD 5.8 million). The increase is mainly due to a combination of maintaining revenues through higher prices received, lower depreciation expense and operating cost maintenance.

 

SPT

There were no SPT liabilities incurred for the period as the weighted average realised price of crude oil was below the SPT threshold of USD 75.0/bbl. There is unused Investment Tax Credit of USD 3.4 million from 2023 and USD 0.5 million for H1 2024 which will be carried forward for future use, limited to a one-year period. SPT is classified as operating expenses rather than income taxation under IFRS.

 

Exceptional items

Exceptional items charge of USD (1.7) million (H1 2023: USD (0.4) million) relates to:

·    USD (1.7) million in financial advisory and legal costs associated with the pending acquisition of the Trinity Group (H1 2023: USD 0.4 million incurred in cyber incident and Trintes Bravo fire incident).

 

Net Finance Cost

Net finance costs for the period of USD (1.0) million (H1 2023: USD (1.1) million), comprising:

·    Unwinding of the discount on the decommissioning provision of USD (1.0) million (H1 2023: USD (1.1) million).

 

Income Taxation

Taxation charge for the period was USD (0.7) million (H1 2023: USD (0.4) million), comprising:

·    Petroleum Profits Tax ("PPT") of USD (0.5) million (H1 2023: USD (0.3) million).

·    Unemployment Levy ("UL") of USD (0.2) million (H1 2023: USD (0.1) million).

·    Net deferred tax of nil (H1 2023: nil), refer to note 15.

 

As at 30 June 2024, the Group had unrecognised tax losses of USD 191.0 million (H1 2023: USD 199.3 million) which have no expiry date.

 

Total Comprehensive Income

Total Comprehensive Income for the Period was USD 3.1 million (H1 2023: USD 0.7 million.) 

 

Cash Flow Analysis

 

Opening Cash Balance

Trinity began the year with an initial cash balance of USD 9.8 million (2023: USD 12.1 million).

 

Summary of Statement of Cash Flows
	H1 2024	H1 2023
	USD'000	USD'000
Opening cash balance	9,819	12,131
Cash movement
Cash inflow from operating activities	7,543	6,769
Changes in working capital	(2,506)	(37)
Income taxation paid	(240)	(475)
Net cash inflow from operating activities	4,797	6,257
Net cash outflow from investing activities	(5,214)	(5,576)
Net cash outflow from financing activities	(1,366)	(1,603)
Decrease in cash and cash equivalents	(1,783)	(922)
Effects of foreign exchange rates on cash	(5)	92
Closing cash balance	8,031	11,301

 

Net cash inflow from operating activities

Net cash inflow from operating activities was USD 4.8 million (H1 2023: USD 6.3 million):

·    Operating activities for H1 2024 generated an operating cash flow before changes in working capital and income taxes of USD 7.5 million (H1 2023: USD 6.8 million).

·    Changes in working capital resulted in a net decrease of USD (2.5) million (H1 2023: net decrease of USD (0.0) million).

·    Income Taxation - PPT and UL paid USD (0.2) million (H1 2023: USD (0.5) million) resulting from lower taxable profits resulting from lower oil price.

 

Cash outflow from investing activities

Investing cash outflows for H1 2024 was USD (5.2) million (H1 2023: USD (5.6) million) which included infrastructure investments across Trinity's assets, production capex including recompletions in H1 2024, subsurface capex and exploration and evaluation capex.

 

Net cash outflow from financing activities

The financing cash outflow for H1 2024 was USD (1.4) million (H1 2023: USD (1.6) million), comprising USD (1.0) million repayment of bank overdraft, USD (0.4) million cash payment on leases.

 

Closing Cash Balance

Trinity's cash balance at 30 June 2024 was USD 8.0 million (31 December 2023: USD 9.8 million).

 

Statement of Financial Position Analysis

	H1 2024	YE 2023	Change
	USD'000	USD'000	USD'000
Assets:
Non-current Assets	86,968	88,170	(1,202)
Current Assets	25,175	25,953	(778)
Liabilities:
Non-Current Liabilities	46,360	47,106	(746)
Current Liabilities	13,406	17,972	(4,566)
Equity and Reserves:
Capital and Reserves to Equity Holders	52,377	49,045	3,332
Cash plus working capital surplus	12,491	8,603	3,888

 

Non-current Assets

Non-current assets decreased by (USD 1.2 million) to USD 87.0 million at H1 2024 from USD 88.2 million at YE 2023:

·    Property, plant and equipment USD 31.3 million (YE 2023: USD 35.2 million) decrease of USD 3.9 million relates to USD 1.7 million additions less DDA of USD (3.0) million and decommissioning reduction USD (2.6) million and impairment of USD (0.2) million.

·    Intangible assets USD 31.7 million (YE 2023: USD 31.4 million) increase of USD 0.3 million mainly relates to exploration G&G costs for the Galeota and Buenos Ayres Block USD 0.4 million less amortisation of USD (0.1) million.

·    Deferred tax asset of USD 16.4 million (YE 2023: USD 15.7 million).

·    Abandonment fund and performance bond of USD 5.8 million (YE 2023: USD 5.6 million).

·    Right of use asset of USD 1.8 million (YE 2023: USD 0.3 million) relating to motor vehicles, office building, staff house and office equipment leases that met the recognition criteria of a lease under IFRS 16.

 

Current Assets

Current assets decreased by USD 0.8 million to USD 25.2 million at H1 2024 from USD 25.9 million at YE 2023:

·    Cash and cash equivalents of USD 8.0 million (YE 2023: USD 9.8 million). Reduction of USD 1.8 million mainly due to repayment of overdraft facility (USD 1.0 million) and a combination of stable operating cash generation mainly being impacted by spillover Jacobin-1 well costs paid in 2024, business development/acquisition costs and payments of USD 1.7 million made in connection with the takeover offers.

·    Trade and other receivables of USD 12.7 million (YE 2023: USD 11.7 million).

o  Trade and other receivables (less impairment) of USD 3.9 million (YE 2023: USD 4.4 million)

o  VAT recoverable of USD 7.6 million (YE 2023: USD 6.0 million).

o  Prepayments and other receivables (less impairment) of USD 1.2 million (YE 2023: USD 1.3 million).

·    Inventories USD 4.0 million (YE 2023: USD 3.9 million) to support normal business operations.

·    Taxation recoverable USD 0.5 million (YE 2023: USD 0.5 million)

 

Non-current Liabilities

Non-current liabilities decreased to USD 46.4 million at H1 2024 from USD 47.1 million at YE 2023, primarily due to:

·    Provision for other liabilities (predominantly decommissioning costs) of USD 42.6 million (YE 2023: USD 45.1 million). The decrease is mainly due to revision of the discount rate at H1 2024.

·    Deferred tax liability USD 2.5 million (YE 2023: USD 1.9 million).

·    Lease liability of USD 1.3 million (YE 2023: USD 0.1 million). The increase is mainly due to new leases entered into in H1 2024.

Current Liabilities

Current liabilities decreased to USD 13.4 million at H1 2024 (YE 2023: USD 18.0 million) primarily due to:

·    Trade and other payables of USD 8.7 million (YE 2023: USD 13.1 million).

o  Trade payables of USD 3.5 million (YE 2023: USD 3.2 million).

o  Accruals and other payables of USD 4.6 million (YE 2023: USD 8.3 million) significantly reduced due to payments of Jacobin-1 Well related costs accrued in 2023 and paid in 2024.

o  SPT payable of nil (YE 2023: USD 1.4 million).

o  VAT payable of USD 0.6 million (YE 2023: USD 0.2 million)

·    CIBC FirstCaribbean bank overdraft facility USD 3.0 million (YE 2023: USD 4.0 million).  The reduction is mainly due to partial repayment of overdraft facility.

·    Provision for other liabilities of USD 0.7 million (YE 2023: USD 0.6 million) mainly related to the Jacobin-1 well disputed drilling cost provision.

·    Lease liability of USD 0.5 million (YE 2023: USD 0.2 million).

·    Taxes payable of USD 0.5 million (YE 2023: USD 0.1 million).

 

Cash plus Working Capital Surplus

Cash plus working capital surplus calculated as Current Assets less Current Liabilities (excluding Provisions for other liabilities and Derivative assets/(liabilities)) increased by 45% to USD 12.5 million (YE 2023: USD 8.6 million).

 

Reconciliation between Adjusted EBIDA after Current Taxes and Cash Inflow from Operating Activities

 

	H1 2024 USD'000	H1 2023 USD'000
Adjusted EBIDA after Current Taxes	8,595	6,670
Exceptional items	(1,714)	(371)
Changes in Working Capital	(2,506)	(37)
Income tax incurred	662	470
Income tax paid	(240)	(475)
Cash flow from operating activities	4,797	6,257

 

APPENDIX 1:  TRADING SUMMARY

 

A summary of realised price, production, royalties, Opex, G&A and operating break-evens expenditure metrics is set out below:

 

Trading Summary Table

 

Details	H1 2024	H1 2023	Change %
Realised price (USD/bbl)	71.5	65.2	10
Sales (bopd)
Onshore	1,343	1,512	(11)
West Coast	385	338	14
East Coast	867	1,011	(14)
Group Consolidated	2,595	2,861	(9)
Metrics (USD/bbl)
Royalties/bbl - Onshore	29.8	24.3	23
Royalties/bbl - West Coast	13.3	12.0	11
Royalties/bbl - East Coast	13.5	12.7	6
Royalties/bbl - Consolidated	21.9	18.8	17
Opex/bbl - Onshore	22.7	16.9	34
Opex/bbl - West Coast	29.6	26.9	10
Opex/bbl - East Coast	30.6	22.5	36
Opex/bbl - Group Consolidated	23.2	20.1	15
G&A/bbl - Group Consolidated	6.8	6.3	9

 

 

Operating break-even (USD/bbl)
Onshore	32.5	22.8	43
West Coast	34.1	32.3	6
East Coast	36.5	26.3	39
Group Consolidated	42.6	34.5	31

 

Notes: Group consolidated operating break-even: The realised price/bbl for which the adjusted EBITDA/bbl exclusive of net derivative expense/income for the Group is equal to zero.

 

STATEMENT OF DIRECTORS' RESPONSIBILITY

 

The Directors confirm that this condensed consolidated interim financial information has been prepared in accordance with International Accounting Standards ("IAS") and that the interim management report includes:

 

·    an indication of important events that have occurred during the first six (6) months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six (6) months of the financial year; and

·    the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

·    material related party transactions in the first six (6) months and any material changes in the related-party transactions described in the last annual report.

 

A list of the current Directors is maintained on the Trinity Exploration & Production plc website www.trinityexploration.com.

 

 

By order of the Board

 

 

 

Jeremy Bridglalsingh

Chief Executive Officer

26 September 2024

 

INDEPENDENT REVIEW REPORT TO TRINITY EXPLORATION & PRODUCTION plc

 

Conclusion

 

Based on our review, nothing has come to our attention that causes us to believe that the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 is not prepared, in all material respects, in accordance with UK adopted International Accounting Standard 34 and the London Stock Exchange AIM Rules for Companies.

 

We have been engaged by the company to review the condensed set of financial statements in the half-yearly financial report for the six months ended 30 June 2024 which comprises of Condensed Consolidated Statement of Comprehensive Income, Condensed Consolidated Statement of Financial Position, Condensed Consolidated Statement of Changes in Equity and Condensed Consolidated Cash Flow Statements and notes to the Condensed Consolidated Interim Financial Statements.

 

Basis for conclusion

 

We conducted our review in accordance with Revised International Standard on Review Engagements (UK) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410 (Revised)"). A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

 

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with UK adopted international accounting standards. The condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with UK adopted International Accounting Standard 34, "Interim Financial Reporting.

 

Conclusions relating to going concern

 

Based on our review procedures, which are less extensive than those performed in an audit as described in the Basis for conclusion section of this report, nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.

 

This conclusion is based on the review procedures performed in accordance with ISRE (UK) 2410 (Revised), however future events or conditions may cause the Group to cease to continue as a going concern.

 

Responsibilities of directors

The directors are responsible for preparing the half-yearly financial report in accordance with the London Stock Exchange AIM Rules for Companies which require that the half-yearly report be presented and prepared in a form consistent with that which will be adopted in the Company's annual accounts having regard to the accounting standards applicable to such annual accounts.

In preparing the half-yearly financial report, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

 

Auditor's responsibilities for the review of the financial information

In reviewing the half-yearly report, we are responsible for expressing to the Company a conclusion on the condensed set of financial statement in the half-yearly financial report. Our conclusion, including our Conclusions Relating to Going Concern, are based on procedures that are less extensive than audit procedures, as described in the Basis for Conclusion paragraph of this report.

Use of our report

 

Our report has been prepared in accordance with the terms of our engagement to assist the Company in meeting the requirements of the rules of the London Stock Exchange AIM Rules for Companies for no other purpose.  No person is entitled to rely on this report unless such a person is a person entitled to rely upon this report by virtue of and for the purpose of our terms of engagement or has been expressly authorised to do so by our prior written consent.  Save as above, we do not accept responsibility for this report to any other person or for any other purpose and we hereby expressly disclaim any and all such liability.

 

 

 

 

 

BDO LLP

Chartered Accountants

London, UK

26 September 2024

 

 

BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).

 

 

Trinity Exploration & Production plc Condensed Consolidated Statement of Comprehensive Income for the period ended 30 June 2024 (Expressed in United States Dollars)
	Notes	6 months to 30 June 2024		6 months to 30 June 2023		Year ended 31 December 2023
		$'000		$'000		$'000
		(unaudited)		(unaudited)		(audited)
Operating Revenues
Crude oil sales		33,787		33,751		69,819
Other income		17		3		7
		33,804		33,754		69,826
Operating Expenses
Royalties		(10,359)		(9,711)		(20,864)
Production costs		(10,958)		(10,402)		(22,402)
Depreciation, depletion and amortisation	8-10	(2,984)		(4,472)		(8,935)
General and administrative expenses		(3,230)		(3,254)		(7,375)
(Impairment)/reversal of financial assets		(24)		25		(64)
Share option expense	14	(222)		(254)		(528)
Foreign exchange gain/(loss)		35		142		(65)
		(27,742)		(27,926)		(60,233)
Operating Profit Before Supplemental Petroleum Taxes ("SPT")		6,062		5,828		9,593
SPT		--		(3,247)		(5,697)
Operating Profit Before Impairment, Exceptional items and Decommissioning reduction		6,062		2,581		3,896
Impairment	3	(398)		--		(13,462)
Exceptional items	5	(1,714)		(371)		(307)
Decommissioning reduction	4	826		--		2,508
Operating Profit/(Loss)		4,776		2,210		(7,365)
Finance Income	7	13		25		50
Finance cost	7	(1,001)		(1,124)		(2,214)
Profit/(Loss) Before Income Taxation		3,788		1,111		(9,529)
Income Taxation expense	6	(662)		(428)		2,725
Profit/(Loss) for the period		3,126		683		(6,804)
Other Comprehensive Income/(loss)
Exchange differences on translation of foreign operations		1		(6)		1
Total Comprehensive Income/(loss) for the period		3,127		677		(6,803)
Earnings per share (expressed in dollars per share)
Basic	20	0.08		0.02		0.00
Diluted		0.08		0.02		0.00

 

 

 

Trinity Exploration & Production plc Condensed Consolidated Statement of Financial Position for the period ended 30 June 2024 (Expressed in United States Dollars)
	Notes	As at 30 June 2024	As at 30 June 2023	As at 31 December 2023
ASSETS		$'000	$'000	$'000
		(unaudited)	(unaudited)	(audited)
Non-current Assets
Property, plant and equipment	8	31,337	44,134	35,188
Right-of-use assets	9	1,798	572	312
Intangible assets	10	31,685	38,799	31,399
Abandonment fund		5,175	4,750	4,962
Performance bond		606	602	606
Deferred tax asset	15	16,367	12,465	15,703
		86,968	101,322	88,170
Current Assets
Inventories		3,939	5,100	3,916
Trade and other receivables	11	12,702	9,773	11,709
Taxation recoverable		503	--	509
Cash and cash equivalents		8,031	11,301	9,819
		25,175	26,174	25,953
Total Assets		112,143	127,496	114,123
Equity
Capital and Reserves Attributable to Equity Holders
Share capital	12	399	399	399
Share based payment reserve	14	2,465	3,224	2,812
Reverse acquisition reserve		(89,268)	(89,268)	(89,268)
Treasury shares	13	(1,481)	(2,088)	(1,553)
Translation reserve		(1,667)	(1,654)	(1,666)
Retained earnings		141,929	145,877	138,321
Total Equity		52,377	56,490	49,045
Non-current Liabilities
Lease liabilities	9	1,314	239	137
Deferred tax liability	15	2,525	1,898	1,862
Provision for other liabilities	16	42,475	53,469	45,076
Employee benefits		46	28	31
		46,360	55,634	47,106
Current Liabilities
Trade and other payables	17	8,744	12,833	13,094
Bank overdraft	18	3,000	2,000	4,000
Lease liabilities	9	476	394	208
Provision for other liabilities		722	145	622
Dividend Payable		4	--	5
Taxation Payable		460	--	43
		13,406	15,372	17,972
Total Liabilities		59,766	71,006	65,078
Total Shareholders' Equity and Liabilities		112,143	127,496	114,123

 

Trinity Exploration & Production plc

Condensed Consolidated Statement of Changes in Equity

for the period ended 30 June 2024

(Expressed in United States Dollars)

 

 

	Share Capital	Share Based Payment Reserve	Reverse Acquisition Reserve	Treasury Shares	Translation Reserve	Retained Earnings	Total
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Balance at 1 January 2023	399	2,990	(89,268)	(1,522)	(1,667)	145,199	56,131
Share based payment charge	--	254	--	--	--	--	254
LTIPs exercised	--	(20)	--	--	--	15	(5)
Treasury shares (note 13)	--	--	--	(566)	--	--	(566)
Translation difference	--	--	--	--	19	(20)	(1)
Total comprehensive profit for the period	--	--	--	--	(6)	683	677
Balance at 30 June 2023 (unaudited)	399	3,224	(89,268)	(2,088)	(1,654)	145,877	56,490
Balance at 1 January 2024	399	2,812	(89,268)	(1,553)	(1,666)	138,321	49,045
Share based payment charge	--	208	--	--	--	--	208
Options lapsed	--	(555)	--	--	--	555	--
Treasury shares (note 13)	--	--	--	72	--	(72)	--
Dividends	--	--	--	--	--	(1)	(1)
Translation difference	--	--	--	--	(1)	(1)	(2)
Total comprehensive profit for the period	--	--	--	--	--	3,127	3,127
Balance at 30 June 2024 (unaudited)	399	2,465	(89,268)	(1,481)	(1,667)	141,929	52,377

 

Trinity Exploration & Production plc Condensed Consolidated Statement of Cashflows for the period ended 30 June 2024 (Expressed in United States Dollars)
	Notes	6 months to 30 June 2024	6 months to 30 June 2023	Year ended 31 December 2023
		$'000	$'000	$'000
		(unaudited)	(unaudited)	(audited)
Operating Activities
Profit /(Loss) before taxation		3,788	1,111	(9,529)
Adjustments for:
Foreign exchange difference		(35)	(142)	65
Finance Income		(13)	(25)	(50)
Finance cost	7	92	71	137
Share option expense		222	254	528
Finance cost - decommissioning provision	7	909	1,053	2,077
Depreciation, depletion and amortisation	8-10	2,984	4,472	8,935
Loss on disposal		--	--	15
Impairment of exploration and evaluation assets		72	--	11,766
Impairment of property, plant and equipment	8	210	--	1,542
Inventory Impairment	3	116	--	--
Impairment/(reversal of impairment) loss on financial assets		24	(25)	64
Other non-cash items		--	--	147
Net release of decommissioning costs		(826)	--	(2,508)
		7,543	6,769	13,189
Changes In Working Capital
(Increase)/decrease in Inventory		(139)	(485)	699
(Increase)/decrease in Trade and other receivables		(1,141)	691	(1,664)
(Decrease)/Increase in Trade and other payables		(1,226)	(243)	1,822
		(2,506)	(37)	857
Income taxation paid		(240)	(475)	(831)
Net Cash Inflow From Operating Activities		4,797	6,257	13,215
Investing Activities
Exploration and Evaluation Assets		(1,287)	(2,052)	(8,972)
Computer software and investment in research & development		--	(284)	(492)
Purchase of property, plant & equipment		(3,927)	(3,240)	(5,917)
Net Cash Outflow From Investing Activities		(5,214)	(5,576)	(15,381)
Financing Activities
Finance income		13	25	50
Finance cost		(33)	(28)	(50)
Principal paid on lease liability		(286)	(291)	(589)
Interest paid on lease liability		(59)	(43)	(86)
Dividends paid		(1)	--	(231)
Bank overdraft repayment		(1,000)	(700)	1,300
Acquisition of treasury shares		--	(566)	(566)
Net Cash Outflow From Financing Activities		(1,366)	(1,603)	(172)
Decrease in Cash and Cash Equivalents		(1,783)	(922)	(2,338)
Cash And Cash Equivalents
At beginning of period		9,819	12,131	12,131
Effects of foreign exchange rates on cash		(5)	92	26
Decrease		(1,783)	(922)	(2,338)
At end of period		8,031	11,301	9,819

 

Trinity Exploration & Production plc

Notes to the Condensed Consolidated Financial Statements for the period ended 30 June 2024

 

1      Background, Accounting Policies and Estimates

 

      Background

 

Trinity Exploration & Production plc ("Trinity") is incorporated and registered in England and trades on the Alternative Investment Market ("AIM"), a market operated by London Stock Exchange plc.  Trinity ("the Company") and its subsidiaries (together "the Group") are involved in the exploration, development and production of oil reserves in Trinidad and Tobago ("T&T").

 

Basis of Preparation

These condensed consolidated interim financial statements for the six months ended 30 June 2024 have been prepared in accordance with international accounting standards as adopted in the United Kingdom. The condensed consolidated interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2023, which have also been prepared in accordance with UK IFRS.

 

The results for the six months ended 30 June 2024 and 30 June 2023 have been reviewed, not audited, and do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31 December 2023 were approved by the board of directors and delivered to the Registrar of Companies. The report of the independent auditors on those accounts was unqualified. The interim report has been reviewed by the auditor.

 

Going Concern

 

The Board has adopted the going concern basis in preparing the condensed consolidated interim financial statements.

 

In making their going concern assessment, the Board have considered the Group's current financial position, budget and cash flow forecast.  The base case cashflow forecast at a minimum contemplated a 12-month outlook illustrating the ability of the Group to operate on a going concern basis one year post completion of the interim review. The base cashflow forecast demonstrated that the Group will remain with a positive cash flow position, and as such being able to meet its liabilities as they fall due.  

 

The base case cashflow forecast was prepared considering the follow:

 

·      Future oil prices are assumed to be in line with the forward curve prevailing as at 1 August 2024. The forward price curve applied in the cash flow forecast starts at a realised price of $69.3/bbl in August 2024, fluctuating each month down to $67.5/bbl in December 2024 through to $64.3/bbl in December 2025;

·      Average forecast production for the years to December 2024 and December 2025 are in line with the Group's asset development plans, with production being maintained by recompletions, workovers and swabbing activities;

·      No SPT is assumed to be incurred on both onshore and offshore assets in 2024 or 2025, as the forecast realised price is below $75.0/bbl;

·      Trinity continuing to progress various growth and business development opportunities;

·      No derivative instruments being put in place for 2024; and

·      No drawdown of working capital overdraft facility

 

 

 

Management considers this is a reasonable base scenario, reflecting a prudent outlook for the future oil price, production profile and costs. The cash flow forecast showed that the Group will remain in a strong financial position for at least the next twelve months, and as such being able to meet its liabilities as they fall due.

 

Management considered a separate stressed scenario including:

 

·      the effect of reductions in Brent oil prices at USD 60.0/bbl being sustained across the forecast period, noting that the base case pricing is in line with market prices; and

·      the compounded impact of a reduction in production by 10%.

The stressed case cash flow forecast allows for the impact of mitigating actions that are within the Group's control which include:

·      Reducing non-core and discretionary opex and administrative costs across the forecast period.

·      Reducing discretionary capital expenditure and capital returns over the forecast period.

The stressed case cashflow forecasts demonstrate that the Group's cash balances are maintained under such scenarios and as such are sufficient to meet the Group's obligations as they fall due.

 

As a result, at the date of approval of the interim financial statements, the Board have a reasonable expectation that the Group has sufficient and adequate resources to continue in existence for at least twelve months post approval of these financial statements . For this reason, the Board have concluded it is appropriate to continue to adopt the going concern basis of accounting in the preparation of the condensed consolidated interim financial statements.

 

Accounting policies

 

The accounting policies adopted are consistent with those of the previous financial year 31 December 2023 and corresponding interim reporting period, except for those set out in the standards below:

 

-       New standards and amendments effective for periods beginning on 1 January 2024 and therefore relevant to these condensed consolidated interim financial statements.

 

·      IFRS 17 Insurance Contracts

 

·      Disclosure of Accounting Policies (Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2 Making Materiality Judgements); Definition of Accounting Estimates (Amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors); Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12 Income Taxes); and

 

·      International Tax Reform - Pillar Two Model Rules (Amendment to IAS 12 Income Taxes) (effective immediately upon the issue of the amendments and retrospectively).

 

               

 

Cash and cash equivalents

 

For the purpose of presentation in the condensed consolidated statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, and other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash.

                                         

Trade receivables

 

Trade receivables are amounts due from the Group's sole customer for crude oil sold in the ordinary course of business. They are generally due for settlement within 30 days and therefore are all classified as current. Trade receivables are recognised initially at the amount of consideration that is unconditional unless they contain significant financing components, when they are recognised at fair value.

 

Impairment of financial assets

 

The Group applied the simplified approach to determine impairment of its trade and other receivables. The simplified approach requires expected lifetime losses to be recognised from initial recognition of the receivables. This involves determining the expected loss rates using a provision matrix that is based on the Group's historical default rates observed over the expected life of the receivables and adjusted for forward looking estimates. This is then applied to the gross carrying amount of the receivables to arrive at the loss allowance for the period.

 

Financial assets recognition of impairment provisions under IFRS 9 is based on the expected credit losses ("ECL") model. The ECL model is applicable to financial assets classified at amortised cost and contract assets under IFRS 15: Revenue from Contracts with Customers. The measurement of ECL reflects an unbiased and probability weighted amount that is available without undue cost or effort at the reporting date, about past events, current conditions and forecasts of future economic conditions.

 

Trade and other payables

 

Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

 

Segment Information

 

Management have considered the requirements of IFRS 8 Operating Segments, in regard to the determination of operating segments, and concluded that the Group has only one significant operating segment being the exploration and development, production and extraction of hydrocarbons.

 

All revenue is generated from crude oil sales in T&T to one customer, Heritage Petroleum Company Limited ("Heritage"). All non-current assets of the Group are located in T&T.

 

Derivative financial instruments and hedging activities

 

The Company has not applied hedge accounting and all derivatives are measured at fair value through profit and loss.

 

Estimates

 

The preparation of condensed consolidated interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31 December 2023. Reference can be made note 3 (Critical Accounting Estimates and Judgements), in the Annual Report December 2023.

 

 

2        Financial risk management

 

Financial risk factors

 

The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group's overall risk management program seeks to minimise potential adverse effects on the Group's financial performance.

 

The condensed consolidated interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the Group's annual financial statements for 2022, which can be found at www.trinityexploration.com. 

 

Liquidity risk

 

Prudent liquidity risk management implies maintaining sufficient cash and short-term funds and the availability of funding through an adequate amount of committed credit facilities. Management monitors rolling forecasts of the Group's liquidity and cash and cash equivalents on the basis of expected cash flow.  As at 30 June 2024, the Group held cash at bank of USD 8.0 million (31 December 2023: USD 9.8 million).

 

 

Credit risk

 

Credit risk arises from Cash and Cash equivalents, deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables. For banks and financial institutions, management determines the placement of funds based on its judgement and experience to minimise risk.

 

All sales are made to a state-owned entity -Heritage.

 

 

3      Impairment

 

		30 June 2024	30 June 2023	31 December 2023
		$'000	$'000	$'000
Impairment of inventory		116	--	--
Impairment of Jacobin Well Costs		72	--	9,634
Impairment of PS4 E&E costs		--	--	2,132
Impairment of property, plant and equipment		210	--	1,549
Other impairment of property, plant and equipment		--	--	147
Total		398	--	13,462

 

Management performed an impairment assessment at 30 June 2024 resulting in USD 0.2 million in impairment.

 

 

4      Decommissioning Release/Reduction

 

		30 June 2024	30 June 2023	31 December 2023
		$'000	$'000	$'000
Reduction of Decommissioning costs estimates		(826)	--	(114)
Release of Decommissioning Liability-Tabaquite Field		--	--	(2,394)
Decommissioning release/reduction total		(826)	--	(2,508)

 

 

5      Exceptional Items

 

Items that are material either because of their size, their nature, or that are non-recurring are considered as exceptional items and are presented within the line items to which they best relate.  During the current period, exceptional items as detailed below have been included in the condensed consolidated statement of comprehensive income. An analysis of the amounts presented as exceptional items in these condensed interim financial statements are highlighted below.

 

		30 June 2024	30 June 2023	31 December 2023
		$'000	$'000	$'000
Legal fees		1,252	--	--
Financial adviser fees		254	--	--
Other fees		208	--	--
ICT incident costs		--	280	161
Bravo fire costs		--	91	146
Total		1,714	371	307

 

 

6      Income taxation expense

a.     Taxation	30 June 2024	30 June 2023	31 December 2023
Current tax	$'000	$'000	$'000
Petroleum profits tax	474	336	422
Unemployment levy	188	134	169
Deferred tax
- Current period
Movement in asset due to tax losses recognised (Note 16)	(664)	--	(3,238)
Movement in liability due to accelerated tax depreciation (note 16)	705	--	(78)
Unwinding of deferred tax on fair value uplift	(41)	(42)	--
Income tax expense	662	428	(2,725)

 

 

Current tax: The Group's effective tax rate varies based on jurisdiction.

 

Tax rates:	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Corporation Tax UK	19%	19%	19%
Corporation Tax TT	30%	30%	30%
Petroleum Profits Tax	50%	50%	50%
Unemployment levy	5%	5%	5%

 

Deferred tax:

The Group has a deferred tax asset of $16.4 million on its condensed consolidated statement of financial position which is the amount it expects to recover within 3 years based on the expected taxable profits generated by Group companies over that period. 

 

 

 

7      Finance income

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Interest income	13	25	50

Finance costs

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Decommissioning - Unwinding of discount	(909)	(1,053)	(2,077)
Interest and other expenses on overdraft	(33)	(28)	(51)
Interest on leases	(59)	(43)	(86)
	(1,001)	(1,124)	(2,214)

 

8      Property, Plant and Equipment

 

	Plant & Equipment	Leasehold & Buildings	Oil & Gas Property	Total
	$'000	$'000	$'000	$'000
Opening net book amount at 1 January 2024	5,141	1,106	28,941	35,188
Additions	1,131	3	577	1,711
Reduction to decommissioning estimate	--	--	(2,679)	(2,679)
Impairment (note 3)	--	--	(210)	(210)
DD&A charge for period	(473)	(91)	(2,109)	(2,673)
Closing net book amount at 30 June 2024	5,799	1,018	24,520	31,337
At 30 June 2024
Cost	20,840	3,513	327,821	352,174
Accumulated DD&A and impairment	(15,041)	(2,495)	(303,301)	(320,837)
Closing net book amount at 30 June 2024	5,799	1,018	24,520	31,337
	Plant & Equipment	Leasehold & Buildings	Oil & Gas Property	Total
	$'000	$'000	$'000	$'000
Opening net book amount at 1 January 2023	4,255	1,271	39,461	44,987
Additions	868	12	2,368	3,248
DD&A charge for period	(293)	(96)	(3,712)	(4,101)
Closing net book amount at 30 June 2023	4,830	1,187	38,117	44,134
At 30 June 2023
Cost	19,061	3,495	325,865	348,421
Accumulated DD&A and impairment	(14,231)	(2,308)	(287,748)	(304,287)
Closing net book amount at 30 June 2023	4,830	1,187	38,117	44,134
	Plant & Equipment	Leasehold & Buildings	Oil & Gas Assets	Total
	$'000	$'000	$'000	$'000
Year ended 31 December 2023
Opening net book amount at 1 January 2022	4,255	1,271	39,461	44,987
Additions	1,573	27	5,306	6,906
Transfers	--	--	319	319
Disposals	(21)	--	(6)	(27)
Tabaquite decommissioning asset relinquishment	--	--	(632)	(632)
Reduction to decommissioning estimate	--	--	(6,508)	(6,508)
Impairment charge (note 3)	(36)	--	(1,653)	(1,689)
DD&A charge for year	(630)	(192)	(7,346)	(8,168)
Closing net book amount 31 December 2023	5,141	1,106	28,941	35,188
At 31 December 2023
Cost	19,709	3,510	327,454	350,673
Accumulated DD&A and impairment	(14,568)	(2,404)	(298,513)	(315,485)
Closing net book amount	5,141	1,106	28,941	35,188

 

 

9      Leases

 

(i)     Amounts recognised in the condensed consolidated statement of financial position.

 

The condensed consolidated statement of financial position shows the following amounts relating to leases:

 

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Right-of-use assets
Non-current assets	1,798	572	312
Lease Liabilities
Current	476	394	208
Non-current	1,314	239	137
	1,790	633	345

 

The ROU assets relate to motor vehicles, office building, staff house and office equipment leases that met the recognition criteria of a Lease under IFRS 16.

 

(ii)    Amounts recognised in the condensed consolidated statement of comprehensive income.

 

The condensed consolidated statement of comprehensive income shows the following amounts relating to leases:

 

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Depreciation charge of ROU assets
Depreciation	(174)	(265)	(534)
Interest expense (including finance cost)	(59)	(43)	(135)

 

The total cash outflow for leases in June 2024 was $0.3 million (June 2023: $0.3 million)

 

 

10   Intangible Assets

	Computer Software	Exploration and evaluation assets	Research and Development	Total
	$'000	$'000	$'000	$'000
Opening net book amount at 1 January 2024	664	30,239	496	31,399
Additions	--	450	45	495
Impairment charge	--	(72)	--	(72)
Amortisation charge for the year	(137)	--	--	(137)
At 30 June 2024	527	30,617	541	31,685
Opening net book amount at 1 January 2023	405	32,903	229	33,537
Additions	204	5,084	80	5,368
Amortisation charge for the year	(106)	--	--	(106)
At 30 June 2023	503	37,987	309	38,799
Opening net book amount at 1 January 2023	405	32,903	229	33,537
Additions	492	9,421	267	10,180
Transfers	--	(319)	--	(319)
Impairment charge	--	(11,766)	--	(11,766)
Amortisation charge for the year	(233)	--	--	(233)
Closing net book amount at 31 December 2023	664	30,239	496	31,399

 

·      Computer Software: Costs incurred in connection with software.

·      Exploration and Evaluation asset: Mainly represents the cost for the TGAL 1 exploration well and E&E costs related to Buenos Ayres block.

·      Research and Development: In 2024, costs incurred in connection with various renewable energy initiatives.

 

 

11   Trade and Other Receivables

	30 June 2024	30 June 2023	31 December 2023
Due within one year	$'000	$'000	$'000
Trade receivables	3,930	4,067	4,393
Less: provision for impairment of trade receivables	(1)	(1)	(26)
Trade receivables: net	3,929	4,066	4,367
Prepayments	891	866	1,005
VAT recoverable	7,557	4,182	6,015
Other receivables	396	693	420
Less: Provision for Impairment of other receivables	(71)	(34)	(98)
	12,702	9,773	11,709

 

The fair value of trade and other receivables approximate their carrying amounts.

 

The Group applies the IFRS 9 simplified model for measuring ECL which uses a lifetime expected loss allowance and are measured on the days past due criterion.

 

Trade receivables - Heritage net sales receipts have been collected on a timely basis.  Since the Joint Interest Billing balances are outstanding, an ECL was calculated at 30 June 2024 of USD 0.07 million (31 December 2023: USD 0.09 million) against Other receivables.

 

VAT recoverable - As at 30 June 2024 the VAT recoverable was USD 7.6 million. During the period, the Group generated refunds of USD 2.6 million and refunds received amounted to USD 1.1 million.

 

 

12   Share Capital

		Number of shares	Share capital $'000	Share premium $'000	Total $'000
As at 1 January 2024 and 30 June 2024		39,899,813	399	--	399

 

 

The Company does not have a limited amount of authorised share capital.

 

 

13   Treasury Shares

 

Treasury shares are shares in the Company that are held by the Company. In September 2022 to June 2023, three share buyback programmes were executed.

 

		Number of shares repurchased	Cost $'000	Total $'000
As at 1 January 2024		1,171,687	1,553	1,553
Shares issued out of Treasury		(46,068)	(72)	(72)
As at 30 June 2024		1,125,619	1,481	1,481

 

 

14   Share Based Payment Reserve

 

The share-based payments reserve is used to recognise:

-  The grant date fair value of options issued to employees but not exercised.

-  The grant date fair value of share awards issued to employees.

-  The grant date fair value of deferred share awards granted to employees but not yet vested; and

-  The issue of shares held by the Employee Share Trust to employees.

 

During 2024 the Group had in place share-based payment arrangements for its employees and Executive Directors, the LTIP. The Share Option Plan is fully vested and expensed. The current year charge through share-based payments are in relation to the LTIP arrangements shown below:

 

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
At 1 January	2,812	2,990	2,990
Share based payment expense	208	254	520
Exercised/lapsed options released to retained earnings	(555)	--	(698)
LTIPs exercised and released to retained earnings	--	(20)	--
At 30 June/31 December	2,465	3,224	2,812

 

There were no issues of LTIPs in H1 2024.

 

 

15   Deferred Income Taxation

 

The analysis of deferred income taxes is as follows:

	30 June 2024	30 June 2023	31 December 2023
Deferred tax assets:	$'000	$'000	$'000
-Deferred tax assets to be recovered in more than 12 months	(16,367)	(12,465)	(15,703)
Deferred tax liabilities:
-Deferred tax liabilities to be settled in more than 12 months	2,525	1,898	1,862

 

The deferred tax balances are analysed below:

	1 January		30 June		31 Dec		30 June
	2023	Movement	2023	Movement	2023	Movement	2024
	$'000	$'000	$'000	$'000	$'000	$'000	$'000
Deferred tax assets - Tax losses recognised	(12,465)	--	(12,465)	(3,238)	(15,703)	(664)	(16,367)
Deferred tax liabilities	1,939	(43)	1,897	(36)	1,861	664	2,525

 

As at 30 June 2024, the DTA increased to USD 16.4 million. A further assessment will be performed at year-end to determine any revision of deferred tax assets.

 

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through future taxable profits are probable. The Group recognises deferred tax assets over a three-year outlook which is conservative and consistent with prior periods. The Group has unrecognised tax losses amounting to USD 191.0 million with no expiry date (2023: USD 199.3 million).

 

Deferred tax assets and liabilities are not shown offset in this condensed consolidated statement of financial position. Deferred tax assets and liabilities can only be offset if an entity has a legal right to settle current tax amounts on a net basis and Deferred Tax amounts are levied by the same tax authority (as per IAS 12).

 

16   Provisions and Other Liabilities

 

Non-Current:	Decommissioning cost	Closure of pits	Total
	$'000	$'000	$'000
6 months ended 30 June 2024
Opening amount as at 1 January 2024	44,433	643	45,076
Unwinding of discount	909	--	909
Revision to estimates	(3,505)	--	(3,505)
Translation differences	(5)	--	(5)
Closing balance as at 30 June 2024	41,832	643	42,475
6 months ended 30 June 2023
Opening amount as at 1 January 2023	51,857	603	52,460
Unwinding of discount	1,053	--	1,053
Revision to estimates	--	--	--
Translation differences	(45)	1	(44)
Closing balance as at 30 June 2023	52,865	604	53,469
Year ended 31 December 2023
Opening amount as at 1 January 2023	51,857	603	52,460
Unwinding of discount	2,077	--	2,077
Revision to estimates	(9,638)	--	(9,638)
Additions	--	40	40
Translation differences	137	--	137
Closing balance at 31 December 2023	44,433	643	45,076

 

 

Current:	Other provisions	Litigation claims	Total
	$'000	$'000	$'000
6 months ended 30 June 2024
Opening amount as at 1 January 2024	500	122	622
Additions	100	--	100
Settlements	--	--	--
Closing balance as at 30 June 2024	600	122	722
6 months ended 30 June 2023
Opening amount as at 1 January 2023	112	136	248
Settlements	(103)	--	(103)
Closing balance as at 30 June 2023	9	136	145
Year ended 31 December 2023
Opening amount as at 1 January 2023	112	137	249
Payments	(112)	(15)	(127)
Additions	500	--	500
Closing balance at 31 December 2023	500	122	622

 

 

17   Trade and Other Payables

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Trade payables	3,473	3,688	3,154
Accruals	3,993	7,079	5,747
VAT payable	416	--	245
Other payables	862	580	2,560
SPT	--	1,486	1,388
	8,744	12,833	13,094

 

 

18   Bank Overdraft

	30 June 2024	30 June 2023	31 December 2023
	$'000	$'000	$'000
Bank Overdraft	3,000	2,000	4,000
	3,000	2,000	4,000

 

 

An on-demand operating (overdraft) line of USD 8.0 million exists with FirstCaribbean International Bank (Trinidad & Tobago) Limited ("CIBC").  Details of the overdraft facility:

 

Details of the overdraft facility:

-  Description: Demand revolving credit facility

-  Interest Rate: United States Prime rate minus 6.50 % per annum, effective rate 7.75%. Interest is payable monthly.

-  Repayment: Upon demand at CIBC's discretion

-  Debenture: Floating charge debenture giving the lender a first ranking floating charge over inventory and trade receivables only

-  Covenant:  Current Ratio not less than 1.25:1

 

The credit limit on the facility is $8.0 million of which $3.0 million was drawn as at 30 June 2024.

 

 

19   Adjusted EBITDA

 

Adjusted EBITDA is a non-IFRS measure, an alternative performance measure, used by the Group to measure business performance. It is calculated as Operating Profit before SPT for the period, adjusted for non-cash items being DD&A, ILFA, SOE, Fair value gain/loss on Derivatives and Foreign exchange (gain)/loss.

 

The Group presents Adjusted EBITDA as it is used in assessing the Group's operating performance as management believes it better illustrates the underlying performance of the Group's business by excluding non-cash items not considered by management to reflect the underlying operations of the Group.

 

Adjusted EBITDA is calculated as follows:

 

	6 months to 30 June 2024	6 months to 30 June 2023	Year ended December 2023
	$'000	$'000	$'000
Operating Profit Before SPT	6,062	5,828	9,593
Depreciation, depletion and amortisation	2,984	4,472	8,935
Share option expense	222	254	528
Impairment/(reversal of impairment) of financial assets	24	(25)	64
Foreign exchange (gain)/loss	(35)	(142)	65
Loss on disposal	--	--	15
Adjusted EBITDA	9,257	10,387	19,200
	$'000	$'000	$'000
Weighted average ordinary shares outstanding - basic	38,664	38,336	38,867
Weighted average ordinary shares outstanding - diluted	39,714	39,751	39,987
	$	$	$
Adjusted EBITDA per share - basic	0.24	0.27	0.50
Adjusted EBITDA per share - diluted	0.23	0.26	0.48

 

Adjusted EBITDA after the impact of Current Taxes (SPT, PPT and UL) is calculated as follows:

 

	6 months to 30 June 2024	6 months to 30 June 2023	Year ended December 2023
	$'000	$'000	$'000
Adjusted EBITDA	9,257	10,387	19,200
SPT	--	(3,247)	(5,697)
PPT/UL	(662)	(470)	(591)
Adjusted EBITDA after Current Taxes	8,595	6,670	12,912
	'000	'000	'000
Weighted average ordinary shares outstanding - basic	38,664	38,336	38,687
Weighted average ordinary shares outstanding - diluted	39,714	39,751	39,987
	$	$	$
Adjusted EBITDA after Current Taxes per share - basic	0.22	0.17	0.33
Adjusted EBITDA after Current Taxes per share - diluted	0.22	0.17	0.32

 

 

20   Earnings per Share

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of ordinary shares adjusted to assume the conversion of all dilutive potential ordinary shares.

 

 

	Profit/(Loss) $'000	Weighted Average Number of Shares '000	Earnings Per Share $
Period ended 30 June 2024
Basic	3,126	38,664	0.08
Diluted	3,126	39,714	0.08

 

Period ended 30 June 2023
Basic	683	38,336	0.02
Diluted	683	39,751	0.02

 

Year ended 31 December 2023
Basic	(6,804)	39,094	0.00
Diluted	(6,804)	40,524	0.00

 

Impact of dilutive ordinary shares:

 

Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.  The awards issued under the Company's LTIP are considered potential ordinary shares.

 

The basic shares balance was amended through the net effect of the issuance of new shares (following exercise of Options) and the repurchase of shares through the share buyback to 30 June 2024.

 

 

21   Commitments and Contingencies

 

a)     Commitments

 

There are commitments for decommissioning costs of the wells and facilities under the Group's agreements with Heritage, which have been provided for as described in Note 16: Provisions and other liabilities.

 

b)    Contingent Liabilities

 

i)              Parent Company Guarantee:

 

a)     PGB - A Letter of Guarantee has been established in substance over the PGB Block where a subsidiary of Trinity is obliged to carry out a Minimum Work Programme to the value of USD 8.4 million.  A clause within the Letter of Guarantee implies that the Guarantor may reduce the Guarantee Sum available for payment to the MEEI under the Letter of Guarantee on an obligation-by-obligation basis provided PGB delivers to the Guarantor a certificate duly issued and signed by the MEEI.

 

b)    Galeota - A Letter of Guarantee has been established in substance over the Galeota Block where a subsidiary of Trinity is obliged to carry out a Minimum Work Programme to the value of USD 0.9 million.  A clause within the Letter of Guarantee implies that the Guarantor may reduce the Guarantee Sum available for payment to the MEEI under the Letter of Guarantee on an obligation-by-obligation basis provided the subsidiary of Trinity delivers to the Guarantor a certificate duly issued and signed by the Minister of the MEEI.  The Letter of Guarantee was effective from 14 July 2021 until the earlier of performance of Minimum Work Programme or the Guarantor has paid the Guaranteed amount.

 

ii)             The Jacobin drilling disputed cost: There is a disputed drilling cost of $2.4 million with a supplier in relation to the Jacobin well, where Management has included a provision for $0.6 million which it believes is appropriate based on external advice obtained. $1.8 million is disclosed as a contingent liability.

 

iii)            The Group is party to various claims and actions. Management has considered the matters and where appropriate has obtained external legal advice. No material additional liabilities are expected to arise in connection with these matters, other than those already provided for in these condensed consolidated financial statements.

 

 

22   Events after the Reporting Period

 

i)              Subsequent to 30 June 2024, the Group received VAT refunds of $1.1 million. 

 

ii)             On 13 June 2023, Trinity announced its successful bid for the onshore Buenos Ayres block. On 1 July 2024, both the Exploration and Production licence with the MEEI and a Joint Operating Agreement with Heritage was finalised.

 

A Letter of Guarantee was also established over the Buenos Ayres block on the 28 August 2024 where a subsidiary of Trinity is obliged to carry out a Minimum Work Programme to the value of $7.9 million.  A clause within the Letter of Guarantee implies that at the end of each twelve-month period, the Guarantor may reduce the Guarantee Sum available for payment to the MEEI under the Letter of Guarantee provided the subsidiary of Trinity delivers to the Guarantor a certificate duly issued and signed by the MEEI.  

 

iii)            On 1 May 2024, Trinity and Touchstone Exploration Inc (TSX, LSE: TXP) ("Touchstone") announced that they had reached agreement on the terms of a recommended all share offer pursuant to which Touchstone would acquire each Trinity share for 1.5 new Touchstone Share, to be effected by means of a Court sanctioned scheme of arrangement under Part 26 of the Companies Act 2006 ("scheme of arrangement") (the "Touchstone Offer").

 

On 2 August 2024, Trinity and Lease Operators Limited ("Lease Operators") announced that they had reached agreement on the terms of a recommended all cash acquisition, pursuant to which Lease Operators would acquire each Trinity share for 68.05 pence in cash (the "Acquisition"), also to be effected by means of a scheme of arrangement.  At the same time, the Trinity board of directors withdrew its recommendation of the Touchstone Offer as it considered the Acquisition to be superior and in the best interests of Trinity Shareholders.

 

On 25 September 2024 the Court granted permission to formally withdraw the scheme of arrangement relating to the Touchstone Offer and, as a result, the Touchstone Offer lapsed with immediate effect.

 

The Trinity Directors will now seek the permission of the Court to convene the Court Meeting and the General Meeting in connection with the Acquisition and to proceed with the publication of the shareholder circular containing full details of the Acquisition and the Scheme (the "Scheme Document").

 

An expected timeline of principal events leading up to the Scheme becoming Effective will be set out in the Scheme Document when published.

 

The Acquisition remains subject to certain other conditions, including the approval of Trinity Shareholders at a Court Meeting and a General Meeting and the Court's sanction of the Scheme at a Court Hearing.

 

A further update, including the timetable for the Acquisition will be made in due course.

 

Further information on the transaction can be found on our website at https://trinityexploration.com/.

 

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