Share Name Share Symbol Market Type Share ISIN Share Description
Trinity Exploration & Production Plc LSE:TRIN London Ordinary Share GB00B8JG4R91 ORD USD0.01
  Price Change % Change Share Price Shares Traded Last Trade
  0.55 6.08% 9.60 1,307,267 14:28:49
Bid Price Offer Price High Price Low Price Open Price
9.40 9.80 9.60 9.05 9.05
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 48.18 -10.60 -1.51 37
Last Trade Time Trade Type Trade Size Trade Price Currency
14:39:47 O 100,000 9.55 GBX

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25/9/202014:46Trinity: OIL PRODUCER 2020978
24/9/202020:59Trinity Exploration - bickering thread 202032
15/9/202012:30Trinity Exploration & Production 20188,952
03/2/202017:52Trinity Going to 1p2
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Trinity Exploration & Pr... Daily Update: Trinity Exploration & Production Plc is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker TRIN. The last closing price for Trinity Exploration & Pr... was 9.05p.
Trinity Exploration & Production Plc has a 4 week average price of 7.35p and a 12 week average price of 6.85p.
The 1 year high share price is 13.50p while the 1 year low share price is currently 5.40p.
There are currently 388,794,303 shares in issue and the average daily traded volume is 2,030,915 shares. The market capitalisation of Trinity Exploration & Production Plc is £37,324,253.09.
hamiltonhill: The Investor Meet Company has added answers to written questions that weren’t given at the meeting. One question and answer that stands out is this: “Q17: How does Angus feel about the TRIN shareprice Angus Winther: I continue to believe that Trinity’s share price doesn’t reflect the true value of the Company. Whether you look at reserves, production, profitability, cash flow or the balance sheet, Trinity’s value appears to significantly lag that of its peers (whether Trinidadian, Latam or all AIM oil and gas peers) on almost all measures. The Amerisur takeover by Geopark earlier this year would further illustrate this valuation disparity. Whilst I’m frustrated by this valuation disparity, I continue to encourage management to focus on doing the right things to deliver long term value accretion and have confidence that the share price will resolve itself with time. When I first invested in Jan 2017 I did so for the long term, and I believe that the Company’s position (financial, operational and strategic) has never been stronger than it is now. I understand the disappointment that was felt by many shareholders about the 2018 capital raising, and the subsequent share price decline. However, whilst one can debate the precise quantum and terms, I am absolutely convinced that the Company was right to raise capital at that time and that we are in a far stronger position today as a consequence. It allowed the Company to resolve the overhang from the CLN and the T&T state creditors, resume drilling (a condition of our licences), stabilise and then grow production, invest in people and technology, weather the COVID storm and - now - focus on growth at a time when other are having to scale back. The key, now, is for management to pursue options that deliver value for the long term, making sure that they do so on the right terms, and not to get too distracted by short termist share price concerns.” Angus Winther, one of the non-executive directors, owns just under 8% of the company.
hamiltonhill: From the IC’s Simon Thompson today ( ): Trinity’s cash flow undervalued Trinity Exploration & Production (TRIN: 8p), an independent oil and gas explorer and producer focused on Trinidad and Tobago, is one of the lowest cost producers in the sector. The company is also cash generative and profitable (first half operating profit of US$1.85m) even with the price of West Texas Intermediate (WTI) oil down 40 per cent to US$37.50 a barrel this year. Indeed, analysts believe Trinity should report full-year pre-tax profit of around US$4m (£3.1m) in 2020. Robust production – first half output rose 9 per cent to 3,282 barrels of oil per day fuelled by low-cost work overs and recompletions of wells – and strict cost controls lowered Trinity’s average operating break-even (inclusive of US$2.40 a barrel of hedging income) by 15 per cent to US$22.60 a barrel. It improved even further to US$19.80 a barrel in June (inclusive of US1.80 a barrel hedging income), adding weight to management’s 2020 target of achieving average operating break-even of US$20.50 (inclusive of hedging). That’s well below Trinity’s average realised oil price of US$36.30 a barrel, hence why the company generated US$6.1m of operating cash flow and increased net cash by 23 per cent to US$17m. It also helps that the realised oil price is below US$50 a barrel, the level when Supplemental Petroleum Taxes become payable. The government will vote next month on a proposal to lift the threshold to US$75 a barrel. Sensibly, hedging arrangements are in place to protect cash flows if WTI falls below $30 a barrel in 2021. Cenkos Securities are forecasting year-end net cash of US$19.5m (4.3p a share), a sum equating to more than half of Trinity’s market capitalisation of £30.7m. This means that its 2P (proven) reserves of 20.9m barrels are in the price for just 95 cents a barrel even though a third are located onshore (operating break-even of US$16.50 a barrel pre-hedging arrangements) and 54 per cent are on the east coast (operating break-even of US$22.50 a barrel pre-hedging arrangements). It also means that 20.1m barrels of 2C (contingent) resources are in the price for free. Frankly, that’s an absurd valuation and one doesn’t attribute any value either to Trinity’s new business initiative (with heavy weight and cash rich oil group Cairn Energy) on the west coast Jubilee Prospect. News on that opportunity could provide a share price catalyst before the year-end. Trinity’s share price is up from the 6p level when I upgraded my view from hold to buy (‘Hunting down undervalued small-cap buys’, 14 May 2020), and offers material upside to my conservative 12p target price. In a more benign oil price environment, Cenkos’ fair value estimate of 36p a share could come into play, too. Buy.
mark10101: PA, yes their manifesto stated no SPT below $75 for 2 years, and totally agree this is not sufficient enough for TRIN to develop TGAL, however it would be a very big boost for TRIN overall. I see 2 ways forward for TGAL, a sale to Perenco to develop (it is the right sort of project for them) or special dispensation for the TGAL license to allow for its development. Removing the SPT uncertainty/ improving tax implication would allow for it to be developed and it is something that the government can and have done for special projects. I can not see TGAL being left much longer, it would be a significant oil project for T&T, crunch time has arrived. My view is under the current, or proposed manifesto regime it is not a project that would be shareholder accretive for TRIN, the returns are just not exciting enough for the risks involved for a company of TRINs size. I genuinely believe TGAL is a significant contributor to TRINs low share price due to the uncertainty it induces. In the small cap space you need TXP’s assets and luck with the drill bit to deliver the rise in the share price we are all here for. I am back to full investment in TRIN as I am sure the TRIN team have a way forward that will take us significantly higher than the current 8p range, hopefully an interesting few weeks ahead.
avsome1968: Nocent We have had a seller for a long while now so until they've finished offloading cant see any mayor news, but i feel a bid coming trin share price reminds me of AMER dept free plenty of oil good drill targets to come but just seem to delay things every thing taking 3 times longer, then out the blue low offer bid up 50% up, turned down straight away 2nd bid came they took, Amer was sold too cheap. Trin if a bid comes in cant see anything higher than 15-17p range what do you think Nocent you know Trin inside out.
hamiltonhill: I’m sorry for anyone who has made loss on their investment (especially for nocents and people in the same situation as him who have locked in their loss by having to sell shares), but I’m afraid that this thread of full of negative nonsense that is potentially having a negative effect upon Trinity’s share price (it’s difficult to assess what effect either negative or positive posts by the average user have on the share price of a company and my guess is not a huge amount, but there may be some effect). Between mid-December 2019 and January 2020 I purchased (and still own) 8,909,131 Trinity shares at an average price of 10.438 per share (I started buying at about 8.5p and continued up to 11p). Although I’m presently sitting on a significant paper loss (just over £200,000), I don’t regret my purchase (obviously I wish I’d purchased my shares in April for 6p) and remain confident that I will make a significant profit before too long. For the following reasons, I don’t accept the assertion that the the directors have neglected shareholders: First, it’s apparent that Trinity is an exceptionally well run company. Over the past few years production, often from ancient fields, has been increased; production costs have been significantly reduced; new working methods (which in time can be rolled out to acquisitions) have been developed that give Trinity a considerable amount of technological ability and uniqueness; profitable hedges have been put in place; and significant amounts of cash have been generated. We employ and pay our directors to run the company well, and they have done so. Second, our directors have gone to great lengths to provide investors and potential investors with information about the way in which the business has been run and its future potential. Before I started investing I had free access not only to the company’s results and quarterly production updates, but also videos of various presentations given by the Executive Chairman and the Managing Director in October/November 2019. Since then the wealth of information has increased further. There have been two detailed presentations via the Investor Meet Company website, question and answer sessions for investors, free access to Cenkos’ broker report, and a wealth of additional information in the 2019 annual report. Third, there is no magic button that the directors can press to make the share price increase. The stock market often behaves irrationally by unfairly depressing the share price of decent companies and it’s that irrationality that gives knowledgable investors who are willing to take a risk an opportunity to make above average returns. If there were a magic button that the directors could press, then they surely would given that they, their families and their friends own 40% of the company. It doesn’t matter how rich you are, you don’t deliberately inflict significant losses on your investment and that of the people you care most about. The job of the directors is to run the company as best they can (which they are) and to set out a compelling reason to invest (which they are). Those of us invested will have to wait for the market to turn (which could be next week, next month, next year - it’s difficult to predict, but that’s the price we pay for seeking above average returns). Fourth, it’s been suggested that Trinity pays too much attention to the government of Trinidad. I’m pleaded that they do. Trinity licenses its oil assets from the government and those for the on-shore assets expire this year. Renewal, whilst likely, is not a mere formality. Being able to demonstrate to the government that Trinity is a responsible, valuable partner able to create employment, increase production and pay more royalties, address carbon emissions, invest in new technologies, and avoid disasters will assist in ensuring that the licenses are renewed. It might even persuade the government to give us some other producers’ licenses. Fifth, Trinity has been criticised for having not made any acquisitions. If you watch the AGM presentation and read some of the recent RNS, it’s very clear that Trinity is hoping to make acquisitions so as to increase oil production levels and it raised money in 2018 with the stated aim of being able to. But any acquisition has to be the right acquisition (ie, one that will lead to increased profits and returns on capital). As the Executive Chairman stated in the AGM presentation, there’s no point in making a bad acquisition just for the sake it. As he further explained, Trinity has a great deal of data and knows what type of assets it’s looking to acquire (that is assets it has the skill, knowledge and resources to improve). In time, it will likely do so and shareholders will benefit from the directors getting it right. Sixth, Trinity has been criticised for not paying a dividend. At the moment it would be foolish for them to do so. They raised a great deal of money to fund acquisitions and it would be nonsensical to start returning that money to shareholders with, in the majority of cases, the deduction of income tax. It would also indicate that Trinity has no need for the money (so no acquisitions, no development of the massive off-shore assets) and that would reduce the investment case for purchasing Trinity shares. Seventh, the lack of buy backs has also been criticised. Again, buy backs would undermine the investment case for investing in Trinity as it would suggest the company has limited investment opportunities. It would also render the 2018 fundraising a farce. I can see that the share price has been on a downward trend since that fundraising, but I doubt that could have been anticipated by the directors at the time it took place (raising money to clear the debts, remove interest payments from cash flow and leave in place a pile of cash for investment seems to me to have appeared to present a positive outlook to the market; moreover, the directors and their friends invested millions in the placing) and to abandon the investment strategy (that will in time potentially generate substantial returns) in order to possibly nudge the share price up a bit (but most probably not back to anywhere like 20p) would render the whole exercise a monumental disaster. Share buy-backs and dividends would also be foolish at a time when the oil price remains uncertain (hopefully, there will be no further collapse in it’s price, but it cannot be ruled out and the last one was serious enough to persuade Trinity to draw down it’s overdraft facility to as to ensure it had enough funds for 18 months at a $10 oil price). I remain confident in my investment. Trinity is a very well run company, with massive potential that will likely soon be realised (the very experienced directors, led by an Executive Chairman who has been hugely successful in his previous businesses, have clearly been laying strong foundations over the past few years) and which has the protection of a considerable (and increasing) cash balance. I can’t say that the share price will go up tomorrow, next week or next month (although there’s a good chance that the forthcoming quarterly report will provide a boost), but the stock market will sooner or realise give Trinity the valuation that it deserves (which perhaps is why various analysts and expert tippers keep making buy recommendations).
spellbrook: Q1: Would Trinity be interested in raising money via a placing in the near future. If so, I would be interested in participating. Firstly, thank you for your interest in investing. There are no plans to undertake a placing in the near future. As you are likely aware Trinity has a strong cash position due to strong production levels, high margins and from previous preparedness in reducing costs and improving efficiencies. Yet further financial capacity comes from our working capital facility with CIBC and the expected near-term sale of our VAT Bonds. This puts us in the advantageous position of being able to quickly execute on value added opportunities. Q2: Trinity's share price has been lagging when compared with similar companies such as Touchstone Exploration and oil output is only increasing at a modest rate. Would Trinity consider a tie-up with another producer ? Would you consider purchasing land/sea assets with substantial oil reserves to substantially increase output ? Whilst output is increasing at a modest rate in totality, production did go from 2,500 to 3,400/3,500 bopd over that three year period. This is a pretty good increase considering that was just through onshore drilling as well as just good operating practice, so in percentage terms it has been very significant to the company and I think what we're trying to demonstrate is, if we can get more wells/more acreage we can continue to scale those sorts of increases - but you are right you know we need more barrels to gain critical mass. Our share price has been lagging but it's been a crazy few months, but as I've been kind of pointing out Trinity is a business. Compared to a company like Touchstone, we are a cycle ahead in our development, we made our offshore discovery in 2015 as you know. We will be hopefully going through all the hoops to get that on production in two or three years time. It takes longer offshore because there's more work to be done and more funds at stake. The glamour of that discovery was lost a long time ago and the hardest bit with any discovery is getting into production, onshore or offshore. I think we are upping the ante with the way we communicate through these sorts of platforms. We were looking at this sort of platform prior to COVID but this has obviously precipitated this process and you'll see us do more and more of these sorts of presentations particularly around meaningful step change type press releases that hopefully we’ll be putting out in the next period. We always look at assets before companies but would we tie up with another producer? No, we did that five or six years ago, it was a really tough and very expensive painful process. What you have to do is go after assets you want not companies you want. There are companies out there that have assets we like but in terms of tying up with another company there's generally parts of many companies portfolios that we would not want to have in a combined company. These could be debt, different classes of shares that we'd also not want in a company so being very careful and being technically driven and commercially driven is at the fore, back to my slides about rigour and purpose and getting that right - itis very important. As you may be aware as a Board and Management team we hold 22% of the shares so we are more aligned than most teams and it is why it shouldn’t surprise you to hear we monitor our relative performance over a range of time periods. That said it’s the absolute share price that naturally drives us. We last invested at 15p and won’t rest/be satisfied until the share price is significantly above this level and more closely reflects the underlying value of our business. But on the relative performance observation we would note that we have actually outperformed much of our production led peer group: As follows: 1m TRIN- +26% vs. 1M PEERs- +9%, 2m TRIN- +29% vs. PEERs +5.3% & 12m TRIN- -34% vs. PEERs- -42% (against a backdrop of WTI & Brent being down 29% and 35% over the past 12m). The reason for excluding Touchstone is that it’s performance sits as an outlier due to recent exploration success so it is at a different phase of the ‘excitement217; cycle. As I mentioned, as a company, we had a similar response on the back of our TGAL discovery but we are now at the development stage of the discovery which typically doesn’t excite some investors again until closer to first production (that doesn’t mean the value has gone away). Q3: Did Trinity hedge any oil last week when WTI briefly hit $40, if not Why not? Broadly speaking hedging is part of our financial tactics that we employ and is a core pillar of what Trinity does on an ongoing basis. I would say we started hedging in 2017 through puts then in 2018 we layered on collars and then in 2019 we started to get a little bit more sophisticated. What we did, and actually we focused on in 2019 was to try and mitigate the impact of SPT through hedging. I see there are some questions that relate to the SPT and how can you work around it but of course we continue to lobby for change but hedging can also provide a mitigating factor for SPT and it was one of the financial levers we identified. We have been trying to demonstrate to the market how you can make cash flow accrete across a broad range of oil prices so we did hedge a significant portion of the 2020 production for the first half of the year and then it trailed off getting into the second half of the year. The oil price did hit $40 late last Sunday and we put in place market orders or live orders that allow us to set parameters in the hedge and should those parameters be met then the hedges are actually executed. We have had a live order for a few days and actually managed to close on a hedge this morning that is not focused on SPT, but given where oil prices are, it is focused on mitigating the impact of low oil prices. So we put a put spread in place this morning for between $20 to $30 and that hedges from 1st of July 20 to the end of December of 20,000 barrels per month. We have now pretty much solidified our hedging for 2020 and we are now going to look forward into 2021 beyond and again, what we do is come up with the right parameters and make sure that the premiums that we do include, if any at all, are sitting within the right mechanism so that we don't overpay and we don't actually put ourselves in a position where the cost of the hedge is more than we think this economically may be able to return to us. Q4: Have any HAW locations been identified? On the back of the 1st high angle well that we drilled in August of last year we were very much encouraged by the outcome of that. The subsurface targets that we identified we came in slightly ahead of prognosis and the well was drilled in one day less than was planned. It was drilled, cased, cemented and logged very successfully and the initial production came on exactly as planned. So that well as been very encouraging and on the back of that we have had a lot of learnings that the team has taken internally across the range from subsurface engineering and operations. We've identified more high angle locations and of course once the environment is right for us to employ that type of investment, we will return to drilling. I think right now where we stand with the oil price outlook I don't think we will intend to drill in the coming months but should that change of course we will let the market know. Q5: Why did Trin take the bank loan? I think I may have answered that earlier but to recap that loan/the working capital facility was put in place in November of 2019 and it's been there since . We didn't anticipate actually drawing it down but it was really put in place with CIBC to foster and generate a relationship with them as we focus on larger projects/acquisitions. As Bruce mentioned, We are also looking at wider projects within our portfolio like the Galeota project, the Echo platform, so building optionality for that is important. When the virus took hold of the world and the uncertainty and ambiguity of the future started to look a lot more volatile, the view of the board was perhaps we should make use of the opportunity, draw it down and put the cash on the balance sheet. In addition the VAT Bonds having come in. With the underlying business break even being quite low for this year we do not anticipate using it, but again if there is the opportunity to accrete value then we are appreciative of having the additional funds. Q6: Was CERP of no interest to Trin? In short, no it was not but we wish them every success for the future. Our focus is on delivering not just growth in headline numbers but true sustainable growth. Reserves are great but only really add value if they can be monetised effectively (you may note that we produce a much higher % of our booked 2P reserves than CERP). Adding potentially overvalued reserves to a more efficient portfolio has the potential to dilute shareholder value. The complex geology and overpressure in the SW peninsular makes much of CERPs upside risky both technically and commercially. So please be reassured that we are aware of our peer environment but will only make moves we deem to be in shareholders best interests. Q7: What are Trins plans for the growing cash pile? In short, to put it to work to grow the business and therefore add shareholder value. Q8: Why has Jeremy not purchased many shares in Trin? Jeremy has purchased in several instances when possible. He’s highly aligned not just through his holding and LTIP shares but is personally vested. He has been with Trinity since 2012 and won’t rest until it is a significantly larger business. Q9: Are Trin keeping West Coast / is it still for sale? As you can see from the detail within our Annual Report the West Coast continues to deliver cash generative production and has significant upside potential across the acreage. We would have to receive a very attractive offer to be willing to part with cash generative barrels in the current environment. Q10: Do Trin expect to get breakeven below $20? Our target FY 2020 average operating break-even (post hedging) is $20.5/bbl. Q11: Have Trin renegotiated the oil field licences yet? We have completed the negotiation phase and are currently in the administrative phase which unfortunately is being slowed down by COVID related bottlenecks but we hope will complete in the near term. Q12: Have Trin and Txp ever had discussions over joining the 2 businesses as one Trinity and TXP are following quite different paths and are at different stages of the cycle so this is not something we forsee to be in the best interest of either parties shareholders. Q13: What’s the delay with the seismic mapping , I thought this had been bought and paid for, if so how in depth is it and was it just for the land owned by Trin Recent delays in final execution on attaining the 3D are related to focus being placed elsewhere during the recent crisis but we’re expecting to put it to work soon. Q14: Who does Cenkos reports get divulged/ distributed to Cenkos like all brokers typically distribute their research to FCA approved financial institutions. However, they also make it available to retail investors via a platform called Research Tree. Q15: Have SCADA prices come down in cost after covid As with everything we do we ensured we got good value for money from the purchase of our existing SCADA units and do expect this competitive pricing to at least continue. However, our focus is increasingly on wider scale automation with bespoke and sometimes mobile SCADA units that we can actually make in-house (we have a very high quality team). Q16: Are there any zoom / online investor roadshows lined up This is our second online investor video call in a matter of weeks and we intend to do them on a regular basis. However, we would always encourage investors to contact us directly at any time with any queries. We want to be as transparent as the regulatory confines allow. Q17: Do all TT Oiler’s talk, including the big boys Bp, she’ll be , ever, regularly, monthly, never. If they do talk what’s the consensus on SPT changes needed and recent reports that Heritage may not have had to pay SPT taxes ? In short, yes we do. Sometimes daily as was the case in the early stages of COVID but usually around an event or areas of mutual endeavor such as lobbying for SPT reform. We do our hedging through BP and our Galeota tank farm sits very close to their operating base on the East coast so we have a regular dialogue but we speak to all the other operators, large and small. Q18: will your cost per barrel still be around 20 dollars at oil prices above 50 dollars per barrel If production levels stay close to where they currently are or are higher, then yes we’d expect the operating costs to stay at similar levels. We would however, on a stable oil price environment/higher oil prices, look to increase capital investment to continue to grow the business through drilling and new business opportunities. Q19: SPT is a fixity it seems. Last year's tweaking was not the promised reform. How is TGAL going to be threatened by its spectre at $50. It could possibly drive cash generation $50.1 -$55 to not viable (?)how will TGAL(your %65) be funded. When do you see Echo as delivering oil? (WTI cannot be relied on) The TGAL development (Echo platform) can only proceed/be funded on robust economics so once the work we described (final design/costings/production profiles) is finalised we’ll be able to review this under a range of oil prices and determine timings according to the expected forward curve at the time and even give up some margin to lock in prices. As mentioned there’s a wide range of potential funding solutions including a combination of: farming down to a partner, project finance, pre-pays, vendor financing and equity. On timings we would expect first production up to 2 years from FID. Q20: With just over $19m after sale of VAT bonds..what is your aim for the cash? It provides security and can be used for well mantenance and SPT payment or G and A. Being debt free and cash rich is absoliutely unequivocally admirable...but what are the precise goals for this cash?/ it is a continuing ongoing investor question. In short, to put it to work to grow the business and therefore shareholder value. Q21: How can you answer a very difficult question? A company which is bordering on faultless regarding cost-management and application of technology. remarkable management in his respect. how can you marry this with a fickle market which works on thin volume and beats up your share price? A company which should be held up as an example for its ethical and fiscal management and is accoladed by the media. But the market does not seem as yet to value this. Hence 8p. Placing 15p. high point May 2018 at 28p. What can you do to reflate the share price in a company which is as lean and productive as it gets under the SPT shadow? And what would you say to attract new shareholders (crucial)and keep those who may be left. There is a chasm between exquisite efficiency and the market response via share price/market cap. Thank you for being a shareholder and I'd reiterate that we're unusually highly aligned to our fellow shareholders with the board and management holding 22% of the equity. In terms of why the depressed price, we can't know definitively but in recent times oil has fallen out of favour (unfairly in my view as you still need it in the energy mix and its evolving quickly to reduce its relative carbon footprint). There is also a desire for short term excitement and we may not be obviously so exciting but we need to spread the message as much as we can on where we are. We are in a very strong position in country in terms of our balance sheet and cost model so we can very quickly leverage the scale of our business organically or via external opportunities. Q22: Great highly detailed descriptive presentation by the way Thank you, and for taking the time to join us. Q23: Excellent delivery Thank you very much, we're passionate about our business. Q24: Considering the net cash balance after the sale of the VAT bonds is approx 50% of market cap.....what is holding the share price back ? It's crazy ! Yes we agree but as I’ve mentioned in a couple of previous questions the world and our industry are facing challenging times and sometimes anomalies on individual company valuations present themselves as even those outperforming businesses get cast with a sector wide brush (in absence of markets expecting imminent excitement). We believe that if we keep delivering operationally, financially and from a communications stand point then the market rating will catch up. Q25: Based on your current view / plan, when do you expect TGAL production starting. What life of asset assumed/ average production rates? As I noted in a previous question we would expect first production within 2 years of reaching FID. We expect peak production rates from the new Echo platform to be in the order of 5,000 – 6,000 bopd (3,250 – 3,900 bopd net to Trinity’s 65% interest). Q26: Thank you Bruce for answering my 3 ("unknown") questions which I asked. Regards. Raj Chawla You're very welcome Raj and thank you for your support as a shareholder. Trying to be fair we were answering the questions in the order they were submitted. Q27: Any further progress on the financing of TGAL? We're not at that point yet, TGAL work is ongoing in order to get to financial investment decision (FID). There's a whole pile of stuff has to be done, obviously one is what's it going to cost ,you know what's the design of it, what's the design of the wells, how many wells, what's each well going to produce in terms of initial production and barrels through its life. A lot of that work is pretty close to being finalised but parallel to the technical work, we are ensuring that the licence, the Ministry and our partner are all aligned. There are many ways to finance developments and in our North sea days at Venture we didn't some very innovative ones particularly with infrastructure owners, so we're sort of looking at those lines of finance as well which vendor financing. There are also ways that you can get pre-pays, so basically a large institution buy some of the oil from you ahead of time at a certain discount and a certain volume, that's another way. There's traditional reserve based lending facilities at banks then of course there's our cash and there is equity. Not until we put all those ingredients into the ultimate model and look at it will we know how we're going to blend that finance but there are many ways that we can take that forward. Even though there's been a COVID period over the last three or four months we've been making very steady progress with the regulatory authorities in Trinidad and with Heritage as to getting everything aligned so we can take the license forward. These are just stepping stones on the way to us taking this through and TGAL, (we now call it Echo as is the 5th platform on the license), our current thinking is we will take some of the reserves at TGAL and also take some of the reserves from the eastern flank of Trintes Field. It is one anticline and this platform is just going to be the latest Platform up dip of the other four. So at the moment the way we're modelling it will develop from both sides, from the East and West flanks, of the anticline. The modelling work is not finished yet on the wells, we've had a slight hiatus as most companies stopped investing because of where the oil price went and the crazy March and April that we lived in, but we're now back to a solid state and work is carrying on in the background. Our environmental work continues so that we can get a Certificate of Environmental Clearance on time, that's a 12 month cycle so we've now collected the dry season data and we now go on to the wet season data. There's many many parts to make the whole project come to fruition but they're all working in parallel and they’re all progressing. I would hope that towards the end of the year we be able to give you a lot more detail on Echo and on other aspects of the license because there are other accumulations on the license that also deserve another platform so we're kind of trying to design repeatability which I mentioned at the beginning, with these technology leaders, such that you can put another platform down to drain very similar volumes, quickly and cheaply. So TGAL is coming along but again as I said we will report on it when we can. Q28: Are there any further High Angle Wells planned? What is the time frame? Yes, we have other identified locations and we would expect to do our next high angled well when the oil price (and its stability) warrants that level of investment. Q29: Are any full horizontal wells planned? What is the time frame? We expect to take the next stage from high angle to full horizontal wells once we have analysed the 3D seismic and it helps us not only rank the best locations for this type of well but will also help us undertake the well planning which is a bit more intricate than vertical or high angle wells but should also be significantly more productive.
spellbrook: A great write up by another investor who has given permission for me to share It is his own analysis and opinion, dyor May 25th 2020 Trinity recently gave an investor presentation based upon its preliminary unaudited results for the financial year to 31st December 2019, so it might be appropriate to reflect on where the company is, especially in light of the recent collapse in oil prices. A Resilient Low-Risk Model This, in my view, summarises Trinity's approach. It has around 284 producing wells (2018: 216) spread across multiple reservoirs and nine licences. And its production is both onshore and offshore. Onshore, it has been aiming at growing production some 10% year-on-year with a focus on step-change - consolidating its increasing production so that it does not have to move backwards in terms of output. It emphasised its policy of continuing with recompletions (RCPs) - low-cost and with a short payback period as well as workovers (WOs). But as I have outlined before the real prize (And risk) lies offshore with its TGAL development. It's strongly cash generative with a 2019 year-end cash balance (Excludes restricted cash) of US$13.8 million (m) (2018: US$10.2m). And this appears to be an accurate figure - according to its cash flow statement, it received US$138,000 (2018: US$93,000) in interest. This cash pile increased to US$14.2m as at 31st March 2020 (But that includes US$2.7m drawn down from a CIBC FirstCaribbean International Bank short-term facility - repayable on demand [Correction: It excludes the facility which was fully drawn down by 2nd April 2020]. It also includes the Supplemental Petroleum Tax (SPT) payment for Q4 2019 as well as US$2.2m in capex and various annual payments including insurance). That was also in a relatively weak oil price environment - Its Q1 2020 average realisation price was US$46.3 per barrel (No SPT will payable for the period). However, its cash position is flattered by payments due from Petrotrin in 2018, being paid in 2019 - these totalled some US$6.2m. Trade receivables (Net) fell by almost 51% to US$5.3m (2018: US$10.41m). It appears to be getting paid faster from Heritage than it did from Petrotrin with debtors older than 30 days now only 15.38% of the total (2018: 26.8%). However, it's still owed US$400,000 by Petrotrin from 2018 - why this has not been paid has not been made clear. Trade payables are also down by around 31% to US$2.213m - it's not using its creditors to inflate its cash position. It's also worth mentioning that it has no senior debt. While not expecting such a scenario, it has modelled for a US$10 per barrel oil price environment lasting for 12 months and calculates that it can survive. While its base case predicts it to have US$16m in May 2021 and that's based on very modest assumptions - a realised oil price of US$26.8 per barrel to May 2021. It has managed to drive down its consolidated break-even to US$26.40 for the year ending 2019 (2018: US$29) while its cash operating costs fell by 9% to US$15 per barrel. And it seems reasonably confident that it can drive down its break-even figure even further - It's targeting an average break-even of just US$20.50 for the full year 2020 and that includes hedging. It's also worth remembering that Trinity's West coast assets are still up for sale - its break-even for its modest West coast output (189 BOPD) rose to US$32.40 (Up 21% from 2018). The recent collapse in oil prices has been mitigated by the company's hedging policies. It has hedged 47,500 barrels of oil per month for H1 2020 and 28,333 barrels for H2 2020. It receives US$6 per barrel when the WTI price falls below US$50 per barrel. For Q1 2020, this totalled US$0.5m. Limited But Profitable Production Growth For 2019 Year-on-year, its growth in production was a very modest 5% increasing to 3,007 BOPD for 2019. (In April 2019, the company had forecast production of 3,000-3,300 BOPD). Around 54% of this output was from its low-cost onshore operations with a break-even of just US$16.4 (Up 2% on the previous year) - it drilled six new wells in H2 2019 (Including its first High Angled Well (HAW)), 23 RCPs and 122 WOs plus a swabbing programme. The results of the drill programme were ahead of expectations. As I mentioned in a previous report, it rethought its approach to subsurface work and that appears to be paying dividends. Its exit rate for 2019 was 3,400 BOPD (For Q1 2020, it averaged 3,291 BOPD). Even without further drilling, it's forecasting an increase to 3,100-3,300 BOPD for 2020. From 2017 it seems to have had a better record at reducing costs rather than increasing production. With hindsight, that seems like a good move. Taking a look back at a presentation made by the company in June 2017 (Production 2,500 BOPD with a consolidated break-even of US$30.9 per barrel) and it forecast production of around 3,400 BOPD in the medium term. It has a broad strategy of consolidating its production - it may not move forward rapidly but it's determined to ensure that production does not go back so it has a programme of RCPs and WOs. There is also a focus on balance sheet strength. It's also worth pointing out that it has good control of its General and Administrative costs (G&A). These have risen just 2% to US$5.1 per barrel (Overall they rose by 8%) from last year. From 2015-2019 they fell by almost 46%. Notably, although its headcount increased by 12 to 214 people, its labour costs fell 2.5% year-on-year. And the bulk (10) of its new hires were in operations. However, its "Key management" costs have risen sharply; increasing by almost 27% to US$2.384m (31% of labour costs). At the same time, overall labour costs have fallen by 2.5% to US$7.773m). Are they all in this together? It's also noticeable that share option expenses (Excluded from its G&A expenses per barrel) have risen from just US$187,000 in 2015 to around US$1.038m in 2019. While production has only increased by 3.8% to 3,007 BOPD over the same period. As this chart shows, the company has under-performed against the FTSE-350 Oil & Gas Index since its financial restructuring in January 2017. It's only in recent weeks that it has begun to out-perform. In my view, management rewards should be much more closely aligned with total shareholder returns. Currently, this is not the case. No alt text provided for this image Incidentally, the company's share price has also performed poorly when compared to other UK-listed Trinidad focused energy companies. No alt text provided for this image Leveraging-Up New Technology The drilling of its first HAW in September 2019 has got off to a good start and the results were, according to the company, in line with expectations with the well producing some 100 BOPD. Twice what would have been expected using a conventional well. That said, it does not indicate how many it has planned going forward. As I mentioned before, this is useful not just in terms of gaining more production per well but also increasing production in the early years of a well and so benefiting from lower royalties incurred for the first two years of production. And the cost is only around US$400,000-US$500,000 more than that for a conventional well (US$1m-US$1.2m). Although it aims to eventually drill horizontal wells, it provided no further information. However, it's now in the throes of purchasing an onshore 3D package which should facilitate that development. Determined to optimise its asset base, the company rolled out a Supervisory Control and Data Acquisition (SCADA) system in September 2019 covering some six wells. Although it did not quantify the benefits of the system (Incidentally, it gave no indication of the cost), it appears to have increased production from the monitored wells. It also reduces the labour costs involved with the operation - it has some 120 employees in the field. The company is planning a wider roll-out of the system in 2020. It expects the benefits of the SCADA system to become clearer over the next one to two years. With more than 1,000 wells, the upside in terms of efficiency gains could be substantial. Overall, there is a move towards standardisation and "Repeatability" which should lower the company's costs even further. It's also worth mentioning that it almost quadrupled its spending on computer software to US$99,000 in 2019. Not a huge amount but indicative of the direction of travel. It appears determined to use technology to drive through efficiencies and it's actually doing it. This is not theoretical. Limited Impact Of COVID-19 The effects for the company have been minimal in terms of its operations (The Trinidad and Tobago Government consider it an essential service). More broadly, Trinidad and Tobago has been spared the carnage affecting much of the world. Thus far, some 116 people have been infected with the virus and there have been eight deaths. From a business perspective, the greatest danger appears to be the impact that the virus has had on the price of oil. It's worth mentioning that it has not, as a result of the present crisis, made redundancies or cut salaries. However, it has cancelled non-essential capital expenditure and is focusing on what it calls "Asset integrity". It's looking at spending some US$3/4m on capex over 2020. Supplemental Petroleum Tax (SPT) - Just Live With It That seems the sum of it. The company continues to use hedges to mitigate the impact of SPT. For 2019, it paid US$7.413m (2018: US$7.050m). An Abolition of SPT would probably result in a substantial re-rating. But it's also worth considering the large capex that it will make to develop its East coast assets - a tinkering of the system could be hugely beneficial for the company. But there appears to be little sign of major changes to SPT in the foreseeable future. Environmental, Social And Governance (ESG) Drives Efficiency Rather than viewing ESG as a burden, it seems to be using it as a spur to reduce costs. For example, it plans to use wind farm energy to power its Galeota anticline development. The goal is to have a carbon footprint (operating costs?) as close to zero as possible. TGAL And Trintes Are Still Key To The Company's Growth At the recent investor presentation, mention was given of "Cleaning up the contractual side" of the TGAL project but no further details were forthcoming. It talks of ongoing and positive discussions with the authorities in respect to a TGAL field (Working interest (WI) of 65%/Heritage Petroleum 35%) development plan as well as the development of the Trintes field (100% WI) but gives no further information. It's worth remembering that the company has already done the heavy lifting with its successful TGAL-1 exploration well (Cost: US$23.7m in 2013). And this is only around 1,200m from its producing Trintes assets (2019: 1,205 BOPD, around 40% of its current production). It's also worth pointing out that its Trintes offers considerable scope for development, especially using innovative technology. At the moment, it's utilising just 34 out of a possible 61 boreholes. And it's in the process of constructing a new storage tank with a capacity of 10,000 barrels. So it obviously sees the production upside in the near-term. But the greater upside lies with its TGAL project where it envisages starting production in H1 2022 with output peaking at 5,800 BOPD. The impression I have is that this is now essentially about how to finance it - the cost is estimated at some US$100m. The company has little doubt about what is there and why should it not? The TGAL-1 exploratory well was successful. It currently operates profitably in the same area and it has the infrastructure in place. But it needs to ensure that the numbers stack up. Purely an opinion but when I spoke to the management last year, they seemed intent on not simply going into production with TGAL but doing so in the most technologically cutting edge and least labour intensive way possible. Basically, aiming for very low-cost production. Financials - Static Revenue But A Robust Balance Sheet Although it faced headwinds in terms of the price it received for its output over 2019 with a 3% fall in the average price per barrel of US$58.1, it still managed to increase its revenue by 2% to US$63.9m for 2019. Largely a result of cost controls, as well as fewer WOs compared to 2018, its operating expenses fell by US$2.3m. Its capex was broadly in line with 2018, at US$12.7m, an increase of US$200,000. Although its operating profit increased by almost 53% to US$10.271m. That was then eaten-up by the SPT charge. In 2019, that took a US$7.413m slice out of its profits. It gets hit when realised oil prices are between US$50 and US$60 per barrel. The result was an operating profit before exceptionals of just US$2.366m. But it's important to remember that SPT is calculated quarterly - under US$50 per barrel and no SPT is due. And this is a company that has structured itself to be profitable under US$50 per barrel. At the end of 2019, it was sitting on taxation losses of US$240.2m with no expiry date. That may not be a big issue now but TGAL is on the horizon and this could potentially save it a great deal of money. Strange point maybe but the total amount paid to its auditors remained fairly stable at US$335,000 (2018: US$316,000) - so it does not appear to be subject to any complex (Expensive) investigations. Trinity's focus on balance sheet strength is telling. Its gearing decreased to <37.7%> from <20.9%> for 2018. So it's foundations are low-cost production and a strong balance sheet. Reserves And Resources Probably Understated The company estimates that it has some 20.94 million barrels (mmbbls) of 2P reserves (2018: 24.49 mmbbls). However, the fall in 2P reserves seems to be more about a change in its financial approach rather than for technical or geological reasons. Broadly speaking, I suspect that its 2P figures are an underestimate. Incidentally, Trinidad has been slow to adopt the type of new technology that has ramped-up oil production and reserves in many parts of the world. And Trinity appears determined to press ahead with that technology, including the use of horizontal wells. That said, SPT impacts the company's reserves. But, in my opinion, its figures probably don't reveal the true extent of its East coast reserves. For now, it has booked 2P reserves of 11.27 million stock tank barrels (mmstb) against its Trintes producing assets. In total, it claims that across its East coast Galeota anticline licence area, it has some 700 mmstb. It also expects to convert some net 10.41 mmbbls of 2C resources in its TGAL assets to 2P once the Final Investment Decision has been made. Work Programme Largely Dependent On Macro Environment The company is very focused on maintaining its base production. So it plans to continue with its programme of WOs, RCPs and Swabbing. However, its drilling programme (It plans to drill more HAWs) appears much more geared to the price of oil. Tightly Managed And With Substantial Low-Cost Upside Chastened by its near-collapse in 2016, Trinity is now a lean business with a strong balance sheet that has pivoted towards innovative (For Trinidad) technology to increase its efficiency and potentially gain hugely from operational gearing. It also appears to be designed to withstand a low-price oil environment and still be profitable. In terms of growth, there is a clear goal of exploiting its East coast offshore assets. But this is not pie-in-the-sky. The TGAL development well has demonstrated the potential that lies just beyond its current producing assets. While its technical plans are at an advanced stage. The key issue now is funding. When I spoke to management last year, I was told that this would be done in a way that would not disadvantage shareholders. They also appeared to have a variety of options available. In the current oil price environment, the company can still operate profitably. But should oil go back to a "Normal" price level, Trinity looks set to be very profitable. Https://
kenmitch: nocents Fwiw I’m convinced that market makers supposedly playing games with private investors on a tiddly AIM share, is nonsense. They make a market on loads of shares, big and small, so why would they want to, or need to, waste their time playing games with Trinity shareholders? Haven’t they far more important things to do? Market makers might manipulate the share price if a large buyer in the wings, but that’s not the same as playing supposed games. The good news is that games or not, at last the TRIN share price is on a run. Hope it lasts.
pavey ark: Hmm....first of all I should apologise for my intemperate tone but judging from your response I doubt if I'm the first person to upset you. I was still angry with the silly, ill thought out, downright stupid posts that went unchallenged by anyone who does their own research. As far as your comments about TRIN and their advisers I think this is a recurring theme of yours and one I find rather strange. After what could only be the very best possible update and after I pointed out that TRIN had cut c. $5m from total operating expenses ($4m after allowing for reduced royalties ...yes I worked that out as well) you suggested that they are keeping a sting of highly paid advisors who are failing to keep the share price up. On reflection does that not seem a bit strange ? Getting a bit silly if you really suggest the TRIN set up their hedging programme and organised the loan on their own. I didn't need to know anything about these advisers , their purpose or their cost to know that they were not, nor would they ever be allowed to be, dead weight. To suggest that the TRIN share price is where it is because some highly paid city types are not doing enough to push the company is ,again, rather strange. I had a quick look at your two had just had a discovery and bounced up from 50% down and the other is 10 times the size of TRIN.
pavey ark: Well, just back from my run and I can confirm that that tides are still ebbing and flowing and the sun is still moving across the sky. The situation in the equity markets would suggest that things aren't even a little bit normal. I'm pretty confident about my cash predictions for Q1 so would point out that the TRIN share price is now , less cash, the princely sum of 2.5p. The options cash would take .5p off that. So there you have it......TRIN is being priced at 2p a share. Time to give the garden a tidy and check if the plants know that the end is coming. Again, I'm not saying "buy" ....I'm just saying this looks a bit strange.
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