TIDMTRIN
RNS Number : 1753O
Trinity Exploration & Production
30 January 2023
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.
30 January 2023
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Q4 2022 Operational Update
Trinity Exploration & Production plc (AIM: TRIN), the
independent E&P company focused on Trinidad and Tobago ,
provides an update on operations for the three-month period ended
31 December 2022 ("Q4 2022" or "the Period"). The information
contained herein has not been audited and may be subject to further
review and amendment.
Jeremy Bridglalsingh, Chief Executive Officer of Trinity,
commented:
"Trinity delivered a r obust operating performance in 2022 which
continues to highlight the strength and resilience of our core
business.
We delivered production for the year within guidance and we
remain on-track to progress our growth agenda in 2023. We submitted
an application in the 2022 Onshore and Nearshore Competitive Bid
Round in January, we expect to have the reactivation of ABM-151
onstream in February and we continue to target further impactful
wells, the most exciting of which is our proposed deep onshore well
on the Jacobin prospect. These are the first near-term growth
catalysts we are pursuing, as we unlock the value in our portfolio.
Coupled with that, our programme of share buybacks reinforces our
focus on creating and returning value to our shareholders.
Trinity is pleased to have bid for the Buenos Ayres block as
part of the 2022 Onshore and Nearshore Competitive Bid Round.
Following-on from the positive fiscal changes announced on 26
September 2022, the success of this licensing round demonstrates
that the Government is focused on stimulating the energy sector
which we expect will continue to provide additional growth
opportunities for Trinity . "
Q4 2022 Operational Highlights
-- The Company maintained solid production performance over the year in line with guidance:
- Q4 2022 sales volumes averaged 2,961 bopd (Q3 2022: 2,990 bopd).
- Full year 2022 sales volumes totalled 2,975 bopd (2021: 3,006 bopd).
-- The Company maintained year-on-year production through a
combination of workovers, recompletion activities and swabbing.
- During Q4, 1 recompletion ("RCP") (Q3 2022: 3) and 27
workovers (Q3 2022: 35) were completed, with swabbing operations
continuing across onshore and West Coast assets.
- A total of 19 RCPs and 117 workovers were completed during
2022 (2021: 7 RCPs and 96 workovers).
-- The third well of the 2022 onshore drilling campaign was
completed and brought into production in the Period.
-- Initial production levels for the three wells drilled in 2022
were on prognosis but subsequent performance is lower than planned.
Each well drilled penetrated multiple oil-bearing horizons but is
being produced currently from only a single interval. Trinity's
normal operating practice is to recomplete these wells sequentially
in different productive horizons, or to complete multiple zones,
which may improve and extend production levels in due course.
-- 31 Tier 1 onshore wells are fully automated resulting in
increased cost savings from reduced manual interventions and
workover preventions.
Q4 2022 Financial Highlights
-- Average realisation of US$ 75.4/bbl for Q4 2022 (Q3 2022: US$
84.3/bbl) yielding a full year 2022 average of US$ 84.9/bbl (FY
2021: US$ 60.4/bbl).
-- Operating cash flow pre-tax and pre-hedging of:
- Q4 2022 US$ 5.5 million (unaudited) (Q3 2022: US$ 8.6 million).
- FY 2022 US$ 26.5 million (unaudited) (FY 2021: US$ 20.5 million).
-- Low operating break-even(1) , pre-hedging, Q4 2022 US$
31.4/bbl (Q3 2022: US$ 32.2/bbl) and US$ 31.9/bbl (unaudited) for
the full year 2022 (2021: US$ 29.2/bbl).
-- Cash balance of US$ 12.1 million (unaudited) as at 31
December 2022 versus US$ 18.3 million (audited) as at 31 December
2021 and US$ 16.5 million (unaudited) as at 30 September 2022.
-- Completion of the share buyback programme announced on 20
September 2022 with 672,000 shares repurchased (1.7% of the
Company's shares in issue) for US$ 1.0 million.
A further US$ 1.0 million buyback was announced on 24 October
2022 and, during the Period, the Company repurchased an additional
400,000 shares (1.0% of the Company's shares in issue) for US$ 0.53
million.
The buyback programme is ongoing. A further 152,000 shares have
been repurchased during January 2023 (0.4% of the Company's shares
in issue). The total number of shares held in Treasury at 30
January 2023 is 1,224,000 (3.1% of the Company's shares in
issue).
(1) Operating break-even is the realised price/bbl where the
adjusted EBITDA/bbl for the Group is equal to zero .
Outlook
Hedging Position
The company incurred substantial hedging costs in 2022 as a
consequence of high oil prices following the Russian invasion of
Ukraine. Those hedging instruments gradually unwound over the
course of 2022, and from 1 January 2023 the Company has no hedging
instruments in place. The total cash cost of the hedging programme
in 2022 was US$ 10.4 million.
The Company believes that hedging remains a valuable component
of its risk management toolkit and will continually monitor the oil
price environment alongside its financial commitments to determine
any future hedging strategy.
Fiscal Reforms
The Government of Trinidad and Tobago's 2023 Budget Statement
announced reforms to Supplemental Petroleum Tax and Investment Tax
Credit. These were assented to in the Finance (No. 2) Act, 2022 on
20 December 2022. The benefit to Trinity's cash flow, at a Brent
oil price of US$ 80/bbl, is estimated to be in the order of US$ 2.5
million per annum for the existing business. In addition, 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 Supplemental
Petroleum Tax rates. We await the legislation which will allow us
to calibrate the economic uplift associated with this
amelioration.
East Coast - Galeota
The Company is progressing its assessment of alternative
development concepts for the Galeota licence on the East Coast,
taking account of the fiscal reforms introduced for new shallow
marine wells. This includes acceleration of production of existing
2P reserves from the Trintes field . On completion of this work the
Company may re-engage with counterparties that participated in a
farmout process in 2022 .
West Coast - ABM-151
The Company has been progressing a reactivation programme for a
key West Coast well, ABM-151, involving the installation of a new
crow's nest and boat landing, together with remote surveillance
technology. Final approvals are being sought to introduce
hydrocarbons into the system which is anticipated in February 2023
at an expected rate ranging between 60-110 bopd.
2022 Onshore and Nearshore Competitive Bid Round
On 9 January 2023 Trinity submitted a bid for the Buenos Ayres
block in the 2022 Onshore and Nearshore Competitive Bid Round
conducted by the Government of Trinidad and Tobago Ministry of
Energy and Energy Industries ("MEEI") which had been launched on 8
July 2022.
At a bid round closing ceremony on 9 January 2023, the MEEI
opened sixteen bids covering eight of the eleven blocks offered in
the bid round, of which two (Trinity's and one other) were for the
Buenos Ayres block. Successful bids are expected to be announced
three months following the close of the bid round.
Buenos Ayres is located immediately to the west of Trinity's
existing Palo Seco area interests with Blocks WD-5/6, WD-2 and PS-4
and, at its closest, is only around 500 metres from the Company's
existing sub-licences. This proximity, together with Trinity's
advanced technical understanding of the area's stratigraphy from
the 2020 purchase and subsequent integration and mapping of the
Palo Seco and NWD 3D seismic datasets, gives the Company confidence
that it has submitted a highly credible and attractive application
to the MEEI.
Drilling Update
On 26 January 2023, Trinity announced that it is progressing to
drill the deep "Jacobin" well in the WD-5/6 area. The well will
test a structural prospect defined on 3D seismic, with target
reservoirs of Lower Cruse Miocene-age turbidite sandstones. The
well will also intersect multiple shallower stacked reservoir
targets.
A successful well would unlock both a further development of
Jacobin and follow-on drill-ready prospects and mapped leads both
on existing acreage and the Buenos Ayres block.
In Q4 2022, the Company placed an order for the specialist
drilling tool required for the planned horizontal well. That tool
is being manufactured specifically for Trinity with a delivery date
during Q2 2023.
Cyber Incident
The Company was the subject of a sophisticated cyber incident in
December 2022 and immediately took precautionary measures to
protect its IT infrastructure and engaged with external specialists
to investigate the nature and extent of the incident and implement
its systems recovery plan. Trinity moved quickly to notify relevant
regulators and law enforcement agencies.
Trinity's production facilities continued to operate safely
throughout and the Company expects the impact on the business to be
minimal.
Trinity's IT team and its external advisers continue to support
the business in returning its administrative systems to full
capacity incorporating learnings from the incident and embedding
more resilient IT infrastructure, cyber security systems and
procedures.
Enquiries:
Trinity Exploration & Production plc Via Vigo Consulting
Nick Clayton, Non- Executive Chairman
Jeremy Bridglalsingh, Chief Executive Officer
Julian Kennedy, Chief Financial Officer
SPARK Advisory Partners Limited
(Nominated Adviser and Financial Adviser)
Mark Brady
James Keeshan +44 (0)20 3368 3550
Cenkos Securities PLC (Broker)
Leif Powis +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Vigo Consulting Limited trinity@vigoconsulting.com
Finlay Thomson / Patrick d'Ancona +44 (0)20 739 0 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.
Competent Person's Statement
All reserves and resources related information contained in this
announcement has been reviewed and approved by Dr. Ryan Ramsook,
Trinity's Executive Manager, Exploration. Dr. Ramsook is also a
Senior Lecturer at the University of the West Indies and Fellow of
the Geological Society (FGS) of London. He is a Geologist by
background with 18+ years' experience.
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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