TIDMTRIN
RNS Number : 0143P
Trinity Exploration & Production
14 October 2021
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Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Q3 2021 Operational Update
Trinity Exploration & Production plc (AIM: TRIN), the
independent E&P company focused on Trinidad and Tobago, today
provides an update on its operations for the three-month period
ended 30 September 2021 ("Q3 2021" or "the period").
Q3 2021 Summary
The Company maintained production during the period, with
increased automation, a low-cost base and the upward trend in the
oil price underpinning higher levels of cash generation. As a
result, the Company remains well placed to accelerate investment.
The focus remains on monetising and broadening the production
portfolio whilst utilising partnerships to target new acreage.
Additionally the Company continues to explore ways to increase its
focus on sustainability and transition fuels.
Production volumes averaged 3,018 bopd (Q2 2021: 3,047),
yielding a YTD 2021 average of 2,995 bopd. The Group's unaudited
cash balances increased over the period to US$20.4 million as at 30
September 2021 (US$19.0 million (unaudited) as at 30 June 2021) as
a result of strong operating cash generation over the quarter.
The focus during the period was on progressing various
production-led opportunities, with the new 25 year Galeota licence
and move to 100% Working Interest (together delivering a
significant improvement in commercial terms) marking the next phase
of development for the Block.
Outlook
Onshore, the Company expects to finalise a drilling programme
during Q4 2021 to commence early in 2022. The drilling inventory
continues to build, supported by the 3D seismic evaluations, with
16 drill ready candidates being developed including conventional,
high angle and horizontal infill targets. The Company also expects
the PS4 acquisition, which is adjacent to its core onshore
producing fields (WD2 and WD5/6), to complete, expanding the
opportunity to complete further recompletions ("RCPs") and infill
wells to increase production.
Offshore, the Company's focus during Q4 2021 will be on working
with its advisor to commence the formal marketing process as part
of farming down the Galeota Asset Development opportunity which
includes the current Trintes Field production, the Echo Field
Development and the Foxtrot and Golf appraisal areas. The process
is expected to take approximately 6 to 9 months and we will keep
the market updated on progress as appropriate.
With a significant asset base of reserves and resources
exceeding 50 mmbbls, Trinity's portfolio offers full cycle
exposure, consisting of:
-- current producing assets (both onshore and offshore)
-- existing brownfield development potential (i.e. an extensive
onshore RCP and drilling inventory)
-- greenfield developments (e.g. Echo, Foxtrot and Golf)
-- exploration potential both onshore (e.g. North West District
("NWD") deeper cretaceous to the shallower Pliocene with 3D seismic
lens) and offshore (i.e. deeper under-explored, near shore heavier
oil)
The Company's overarching objective is to target growth in
revenues and cash flows from existing producing reserves, to
advance near-term development projects and to mature other
identified prospects from both within the portfolio and via
external processes.
Independents often drive later stage growth in mature basins,
but Trinidad has not yet opened up in the same way that other
jurisdictions have. However, the Company expects that the increased
Government focus on ensuring that the sector can compete for
capital investment in an international context will create new
opportunities. The wider environment remains positive for the
Company - not only the positive trend in oil prices, but also the
growing focus on sustainability and transition fuels in
Trinidad.
The Company remains well positioned to act as a consolidator in
the region and the Government's continued focus on stimulating
investment will offer Trinity opportunities to broaden its
portfolio with bolt-on acquisitions and new licence awards.
Jeremy Bridglalsingh, Chief Executive Officer, commented : "We
continued to develop our business during the period, maintaining
existing assets, laying the foundations for longer-term production
growth from our existing portfolio while also pursuing new growth
opportunities. The Government's focus on stimulating the sector
could provide significant opportunities for Trinity and we look
forward participating in the new bid rounds to be launched.
"It goes without saying that this was an extremely difficult
period for the Company, with the passing of Bruce Dingwall
affecting everyone in the business, and the operational challenges
posed by COVID-19 continuing. The strong performance reported today
is a testament to Bruce's legacy, and means that we are able to
look forward with confidence as we seek to develop the numerous
opportunities available to us, building on our growing reputation
in the region which has been further enhanced by Derek Hudson's
recent appointment to the Board."
Q3 2021 Operational Highlights
-- Broadly flat quarter-on-quarter production with Group average
production volumes of 3,018 bopd for the period (Q2 2021: 3,047
bopd) without any new wells being drilled and despite constrained
operational conditions owing to COVID restrictions
-- YTD 2021 (Q1-Q3) average production volumes of 2,995 bopd
represent a year-on-year decrease of 7% (YTD 2020: 3,232 bopd)
-- 2 RCPs (Q2 2021: 2) and 18 workovers (Q2 2021: 21) were
completed during the period, with swabbing continuing across all
onshore assets and extended to the west coast assets
-- 25 year Galeota Licence, increase to 100% Working Interest
and significant improvement in commercial terms
-- Production volumes for the remainder of 2021 will be
dependent on several factors including general market conditions
and the impact of COVID restrictions. However, even without a
resumption of drilling in the near term, net average production for
2021 is still expected to be in the range of 2,900 - 3,100 bopd
(2020: 3,226 bopd), in line with our previous guidance
Q3 2021 Financial Highlights
-- Average realisations of US$62.6/bbl for Q3 (Q2 2021:
US$59.4/bbl) yielding a YTD 2021 average of US$58.1/bbl (YTD Q3
2020: US$37.3/bbl)
-- Cash balance increased to US$20.4 million (unaudited) as at
30 September 2021 (30 June 2021: US$19.0 million, unaudited) as a
result of strong operating cash generation during the period and
despite a further increase in the VAT receivable due
-- Strong production levels combined with strict cost controls
helped maintain an operating break-even of US$28.2/bbl (unaudited)
year-to-date, despite additional Covid related costs. The Company
remains on track to meet its target for average operating
break-even (inclusive of hedging) of below US$30.0/bbl for FY
2021.
Projects Update
The Echo development project on the Galeota Block continued to
advance with the final Field Development Plan due to be approved
during Q4 2021. A farm-down process is also due to commence
imminently as a crucial next step towards a Final Investment
Decision during H1 2022, with first oil targeted for 2023. Once on
production, the Echo development is currently expected to deliver
peak production in excess of 4,000 bopd (100%).
Results from the onshore 3D seismic interpretation continue to
be very encouraging with several, potentially meaningful, new plays
and leads identified. Several high angle well ("HAW") drilling
leads have already been identified, as we aim to transition from
drilling conventional vertical wells to HAWs, and ultimately full
horizontal wells. Drilling is currently targeted to recommence
early in 2022.
In conjunction with its partner, Trinity was short-listed and
has been evaluating two new opportunities; the Jubilee field
redevelopment opportunity offshore and NWD opportunity onshore.
Following a thorough review process of the available data at
Jubilee the partnership decided not to proceed to the bid stage.
With regard to NWD, the partnership teams have been encouraged,
based on evaluations to date, and are progressing in the process
with bids due during December 2021.
As part of the recent 2022 Budget Statement the Government of
Trinidad and Tobago announced there will be three new bid rounds
and Trinity looks forward to evaluating these in conjunction with
partner(s) where appropriate:
-- the first bid round will be for deep water and will comprise 11 deep water blocks;
-- the second bid round will be for onshore activity and will comprise 12 blocks; and
-- the third bid round will be for the offshore shallow water
where there are 25 open shallow water blocks for consideration (13
of these blocks having been the source of recent natural gas
discoveries).
Trinidad & Tobago Budget
The Company notes the Government of Trinidad and Tobago's
continued focus on further stimulating investment and increasing
incentives for the energy sector included in the 2022 Budget
Statement delivered earlier this month.
Encouragingly, the statement included a proposal to issue new
VAT Bonds in the new financial year, numerous statements
highlighting the need for, and intent to, further reform the
taxation regime and facilitate companies to bid for blocks and
engage in exploration and production. Of key note, The Ministry of
Finance will very shortly conduct a comprehensive review of its oil
and gas taxation regime (including Petroleum Profits Tax,
Supplementary Petroleum Tax and Royalties) to ensure that Trinidad
and Tobago remains an internationally competitive hydrocarbon
province.
Investor Presentations :
The Company will be hosting presentations as part of the Mello
Results Round Up at 17.00 today and also presenting at the
Proactive One2One Virtual Forum on Thursday 28 October.
Investors can sign up to take part via the following links:
For Mello: Mello Results Round-Up 14th October - Mello
Events
For Proactive: Proactive One2One Investor Forum
(proactiveinvestors.co.uk)
Enquiries
For further information please visit www.trinityexploration.com
or contact:
Trinity Exploration & Production plc +44 (0)131 240 3860
Jeremy Bridglalsingh, Chief Executive
Officer
Tracy Mackenzie, Corporate Development
Manager
SPARK Advisory Partners Limited (Nominated
Adviser and Financial Adviser) +44 (0)20 3368 3550
Mark Brady
James Keeshan
Cenkos Securities PLC (Broker)
Leif Powis +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Walbrook PR Limited +44 (0)20 7933 8780
Nick Rome/Nicholas Johnson trinityexploration@walbrookpr.com
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 nine licences and, across all of the
Group's assets, management's estimate of the Group's 2P reserves as
at the end of 2020 was 19.55 mmbbls. Group 2C contingent resources
are estimated to be 31.06 mmbbls. The Group's overall 2P plus 2C
volumes are therefore 50.61 mmbbls.
Trinity is quoted on the AIM market of the London Stock Exchange
under the ticker TRIN.
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