TIDMTRIN
RNS Number : 9654A
Trinity Exploration & Production
28 September 2022
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 considered to
be in the public domain.
28 September 2022
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Trinidad and Tobago Budget Highlights
Trinity Exploration & Production plc (AIM: TRIN), the
independent E&P company focused on Trinidad and Tobago ,
welcomes the Government of Trinidad and Tobago (the "GORTT's")
stated intention to stimulate higher levels of activity and
investment in the energy sector as set out in the 2023 Budget
Statement delivered on Monday 26 September 2022 (the
"Statement").
The Statement (
https://www.finance.gov.tt/wp-content/uploads/2022/09/Budget-Statement-2023-1.pdf
) included three proposals relevant to Trinity:
1. Incentives for small onshore oil producers
2. Lower rates of Supplemental Petroleum Tax ("SPT") for new oil wells in shallow marine areas
3. An increase in Investment Tax Credit
These elements will directly benefit Trinity's existing onshore
producing assets and, potentially, materially improve the economics
of the Company's East Coast and West Coast shallow marine
licences.
Key Points:
1. Incentives for Small Onshore Producers
The production threshold for small onshore oil producers to
benefit from the previously increased SPT threshold price of USD 75
per barrel will be increased from 2,000 barrels per day to 4,000
barrels per day.
The USD 75 per barrel threshold was due to expire at the end of
2022 but has been extended indefinitely.
The SPT rates applicable to small onshore producers are as
follows:
Oil Price (USD) Rate of SPT
------------------ ---------------------------
$0.00 to $75.00 0%
$75.01 to $90.00 18%
$90.01 to $200.00 SPT Rate = 18% + 0.2% (P -
USD90.00)
$201.01 and over 55%
------------------ ---------------------------
Note: P = weighted average crude oil price in USD.
2. Lower Rates of SPT for New Oil Wells In Shallow Marine Areas
New oil wells in shallow water marine areas (the definition of
which covers Trinity's East Coast and West Coast assets), whether
in existing fields or new fields, will benefit from lower SPT
rates.
Current SPT - Shallow Marine Amended SPT - Shallow Marine
--------------------------------
Oil Price Rate of SPT Oil Price Rate of SPT
(USD) (USD)
---------------- -------------- ---------------- --------------
$0.00 to $50.00 0% $0.00 to $50.00 0%
$50.01 to $50.01 to
$90.00 33% $70.00 15%
$70.01 to
$90.00 20%
$90.01 to 33% + 0.2% (P $90.01 to 20% + 0.2% (P
$200.00 - USD 90.00) $200.00 - USD 90.00)
$200.01 and $200.01 and
over 55% over 42%
---------------- -------------- ---------------- --------------
Note: P = weighted average crude oil price in USD.
The precise methodology for determining what is defined as "new
oil wells" will be finalised following discussion with the oil
companies.
3. Increase in Investment Tax Credit
Energy companies are currently eligible to claim a tax credit of
25% of qualifying capital expenditure as a deduction against SPT .
The GORTT has proposed an increase in the Investment Tax Credit
from 25% to 30%. This will benefit Trinity's onshore and offshore
assets.
All of the proposed amendments will take effect from 1 January
2023.
Jeremy Bridglalsingh, Chief Executive Officer, commented: "The
Government's focus on stimulating the energy sector, and
specifically oil production, is to be welcomed and will provide
opportunities for Trinity. The SPT changes for onshore production
will positively impact our cashflow, thereby increasing our
capacity to reinvest. Given our large hopper of drill-ready
prospects, these measures should enable us to undertake a
multi-year drilling programme to significantly expand our onshore
production. We are also encouraged by the proposals for reduced SPT
for new shallow marine wells which could directly benefit our East
Coast and West Coast licences and we are committed to work with the
Government to mature the methodology for these changes. Whilst we
believe this is a positive development, and as such is to be
welcomed, Trinity will continue to champion tax reform to make
investment in Trinidad competitive in an international context as
we continue to build our business in the coming years."
Enquiries
Via Vigo Consulting
Trinity Exploration & Production
Nick Clayton, Non-Executive Chairman
Jeremy Bridglalsingh, Chief Executive
Officer
Julian Kennedy, Corporate Development
Manager
SPARK Advisory Partners Limited (Nominated
Adviser & Financial Adviser)
Mark Brady
James Keeshan +44 (0)20 3368 3550
Cenkos Securities PLC (Broker)
Leif Powis (Corporate Broking) +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Vigo Consulting Limited t rinity @vigoconsulting.com
Finlay Thomson/Patrick d' Ancona +44 (0)20 7390 0230
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 ten licences and, across all of the
Group's assets, management's estimate of the Group's 2P reserves as
at the end of 2021 was 19.73 mmbbls. Group 2C contingent resources
are estimated to be 47.22 mmbbls. The Group's overall 2P plus 2C
volumes are therefore 66.95 mmbbls.
Trinity is quoted on AIM, a market operated and regulated by the
London Stock Exchange Plc, under the ticker TRIN.
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.
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