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TRAP OIL

Monday, Jul 04 2011 by
7

Reading this morning's RNS's I noticed this one from Trap Oil.

http://www.investegate.co.uk/Article.aspx?id=201107040700086654J

Haven't heard of them before.

A quick scan of their website (http://www.trapoil.com) shows that they floated earlier this year and have a market cap = £75 million. Their management team look like a serious bunch, they have a whole smorgasbord of small interests in small assets, they look to have a period of intense exploration activity coming up.

A worthwhile early stage punt? - or  just another wannabe start up?

It's always interesting to check out seedling companies in this business.....

Anyone out there got any background info? Any analyst reports? Any thoughts they'd like to share?

T


Disclaimer:  

The author may hold shares in this company. All opinions are his own. You should check any statements that appear factual and seek independent professional advice before making any investment decision.


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Trap Oil Group plc is a United Kingdom-based holding company. The Company is engaged in oil and gas exploration. As of December 31, 2010, Trap Oil’s asset portfolio comprises interests in seven exploration licenses and one operated license, covering a total of 13 blocks and part blocks in the United Kingdom Continental Shelf (UKCS). The Company’s portfolio covers a total of 13 blocks and part blocks. Its 25th round blocks under license include Hawthorn/Hunt, Crazy Horse, Scotney and Romeo. Part block 9/10c covers an area of 152 square kilometers and lies in the South Viking Graben to the south-west of the Frigg gas field and east of the Bruce gas condensate field. Block 14/13 covers an area of 216 square kilometers and lies at the north-west extremity of the Witch Ground Graben. In December 2013, Trap Oil Group PLC sold its interests in Knockinnon, Lybster and certain other assets to Caithness Oil Limited. more »

Share Price (AIM)
8.63p
Change
0.0  0.0%
P/E (fwd)
n/a
Yield (fwd)
n/a
Mkt Cap (£m)
19.6



  Is Trap Oil fundamentally strong or weak? Find out More »


12 Posts on this Thread show/hide all

emptyend 4th Jul '11 1 of 12
5

Interesting set-up.

The game of picking winners amongst North Sea minnows seems to be getting ever more complex......there is no lack of candidates, despite Osborne/Greening's best efforts....

The impression (aided by black and white photos that make everyone seem about 10 years older than their biogs claim) is one of a serious company.....and that is reinforced by a (presumably expensive) Mayfair address. But their market cap is a prospective £86mn (@42p) once the Reach deal is completed.....so it would be quite interesting to see a full drilling schedule for the next 12-18 months, coupled with some evidence of the materiality of their prospects to a company of that size. I note that many of Reach's positions appear to be cheap carries - so presumably modest in terms of potential upside?

First impression? I'm not sure there is much of a bang for the buck, but perhaps they'll do OK over the medium term if they keep expenses under control and get some drilling luck?

ps......I note with considerable interest some of their major shareholders. Elliott have a chunk - and Henderson (who are also no mugs!) more than doubled their stake last week to 11%+. Rather "interesting" timing for the latter in view of today's news, but those two represent some pretty smart money IMO - so perhaps it is worth a closer look (at least back to the AIM admission document)?

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tournesol 4th Jul '11 2 of 12
6

Answering my own question.

According to Trap's IR the only "published" research to-date was issued by Trap's broker, Mirabaud in February before the IPO which was in March.

I've now got a copy of that report which runs to 34 pages. Not I hasten to add from Trap themselves - they were very proper about the need to protect PI's from dangerous substances like analyst's reports.

I will need to read it in conjunction with the prospectus which is much longer, so that's not happening today.

However, what is supposed to be happening today is the issue of an updated report from Mirabaud to factor in today's acquisition. Obviously that updated report is mandatory reading for anyone trying to get their heads around Trap. Equally obviously, I haven't got report #2 yet.

I'll try and summarise all of the above in due course.

Don't hold your breath though....................................

T

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tournesol 7th Jul '11 3 of 12
4

FT article with reference to Trap

"...The difficult conditions were emphasised by the fact that Trap Oil ....set out to raise £80m but had to settle for £60m, at the bottom end of its ambitions.....the company’s first acquisition, made this week for £30m, made up of £20m in cash and £10m in ordinary shares at 43p each – the same price as for the flotation. It is to buy Reach Oil & Gas, which has an interest in 14 exploration licences covering 24 blocks on the UK Continental Shelf....The deal fulfils ...promise made to shareholders at the outset. The company hopes to complete the second part, the acquisition of a producing asset, by the end of the year.

It must be one of very few players to have welcomed the increase in tax on North Sea production introduced in the budget. The plan is to fund its drilling programme by clawing back tax from its production division. It will now need to produce only 2,000 barrels-a-day to get the necessary tax relief to pay for eight wells, compared with 3,000 barrels-a-day at flotation. Further, the tax increase has reduced the price of producing assets by about a quarter....."

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tournesol 7th Jul '11 4 of 12
4

And a bit in the Press & Journal 

"...Reach ...holds interests in 14 exploration licences covering 24 blocks and part blocks on the UK continental shelf (UKCS) ...Trap ...said the acquisition “more than doubled” the size of its existing exploration portfolio and near-term drilling activity, including increasing the company’s interest to 15% in the central North Sea Orchid prospect, to be drilled later in 2011. It was the first corporate acquisition for the firm, which listed on AIM in March....the deal made Trap Oil “one of the more active exploration and appraisal companies in the UK North Sea, with the possibility of drilling up to eight wells a year in 2012 and beyond”. He said: “Having successfully secured this attractive portfolio to augment our existing assets, the company’s focus will turn to identifying and acquiring producing assets in order to provide sufficient cash flows to support the group’s planned drilling programme with suitable tax synergies.” ...Trap ...expected to be drilling an additional three wells in 2012 and an additional four in 2014. This would provide it with a potential net risked resources of about 15million barrels of oil equivalent..."

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Proselenes 17th Dec '12 5 of 12
3

Post from ADVFN :

zed2002 17 Dec'12 - 10:46 - 1942 of 1947 0 0

Bones,

I got a call from the BOD and discussed in length about the aquisitions, deals etc.

Before we started to talk, the BOD made it clear that he could not provide any sensitive information which is not available on public domain as i will be classed as an insider. I agreed and discussion started.

Athena is still on track to be delivered by year end. The delay was due to BW Offshore not happy with Dyas offloading % to a new Partner which believed to be resolved. I asked if this deal still benefit TRAP and the answer was Yes even though the current output is at 11,000


Trent Aquisition again was delayed due to unforseen circumstances (not on our part) and the deal is going ahead. TRAP pushing this to go through.

Romeo confirmed there was a delay but nothing to worry about. Waiting for Operator to provide news to TRAP of the drilling outcome.

Possible future deals (review Tullow UK assets). Was advised that TRAP is always looking for possible aquisitions and deal which would give shareholders value. He was aware on the news from Tullow released today and did not say yes or no if they were reviewing their portfolio.

Discussed about Share Price. We agreed that were not happy with the current value of the Company and that it was to do with delay on Athena.

Was advised plenty of news to come.

Hope this helps.

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Proselenes 20th Dec '12 6 of 12
1

Today is day 83 for Romeo from the re-spud date of 28th Sept.

Well Registration No. = 30/11c- 6C
Original Intent = Exploration
Country Code = United Kingdom
Onshore/Offshore = Offshore
Quadrant No. = 30
Block No. = 11
Block Suffix = c
Platform = NULL Value
Drilling Sequence No. = 6
Wellbore Type = Re-Spud
Primary Target = R
Slot No. = NULL Value
Spud Date = 28-SEP-2012
Date TD Reached =
Completion Date =
Completion Status = NULL Value
Total MD Driller (feet) = NULL Value
Total MD Logger (feet) = NULL Value
TVDSS Driller = NULL Value
Datum Elevation (feet) = 85
Datum Type = RT
Water Depth (feet) = 284
Ground Elevation (feet) = NULL Value
Deviated Well = Vertical
Top hole Latitude = 056 35 05.854N
Top Hole Longtitude = 002 00 14.692E

They said 78 days to complete well operations (drilling and logging and P&A) on a dry hole basis - so as we are at day 83 it suggests either they had problems and delays during drilling or they have found something of interest.

We will know good or bad soon, the thing I like is that TRAP are free carried on this well, to first oil. So no cost and if it strikes again no costs until the oil starts to flow....

Good luck to anyone holding, minimal downside and possibly considerable upside.

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Proselenes 22nd Dec '12 7 of 12
1

Excellent news ref the Athena deal completion. Company now have strong cash flow with which to grow. Lots of action ahead.

http://www.investegate.co.uk/trap-oil-group-plc/trap/completion-of-athena-acquisition/201212211521441911U/

.

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Proselenes 24th Dec '12 8 of 12
2

Update from Paul Curtis (he holds over 3% of TRAP shares) :

http://boards.fool.co.uk/quick-update-on-trap-re-athena-fridays-rns--12712174.aspx

.

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Proselenes 26th Dec '12 9 of 12
1

http://www.mediafire.com/?c52u24is7uylg01

Page 11 of this presentation suggests given that Romeo is an HPHT well then as this presentation was done a month after the final re-spud date of 28th Sept, it suggests we are now into "option" time which would suggest to most people Romeo is undergoing testing.

The next well, Scotney appears due for spud mid-January. Given P&A time suggests news first week of Jan for Romeo.

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Proselenes 1st Jan '13 10 of 12
1

As TRAP is my choice in the NFSC 2013 competition, below link is the write up on it.

http://boards.fool.co.uk/nfsc-2013-lontrap-trapoil-12715326.aspx

.

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Warwick 4th Jan '13 11 of 12
1

Took a position in TRAP oil today. Fantastic proposition for 2013.

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Proselenes 6th Jan '13 12 of 12
1

sranmal from advfn did a write up on TRAP.

PDF file in the link below :

http://www.mediafire.com/?fl1th4fdlant1us

.

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