REG - Trinity Exploration - Interim Results
27/09/2024 07:00
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RNS Number : 9024F Trinity Exploration & Production 27 September 2024
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
in the public domain.
27 September 2024
Trinity Exploration & Production plc
("Trinity" or "the Company" or "the Group")
Interim Results
Trinity Exploration & Production plc (AIM: TRIN), the independent E&P
company focused on Trinidad and Tobago ("T&T"), announces its unaudited
interim results for the six-month period ended 30 June 2024 ("H1 2024" or "the
Period").
Update on takeover offers
On 1 May 2024, Trinity and Touchstone Exploration Inc (TSX, LSE: TXP)
("Touchstone") announced that they had reached agreement on the terms of a
recommended all share offer, pursuant to which Touchstone would acquire each
Trinity share for 1.5 new Touchstone Shares, to be effected by means of a
Court-sanctioned scheme of arrangement under Part 26 of the Companies Act 2006
("scheme of arrangement") (the "Touchstone Offer").
On 2 August 2024, Trinity and Lease Operators Limited ("Lease Operators")
announced that they had reached agreement on the terms of a recommended all
cash acquisition, pursuant to which Lease Operators would acquire each Trinity
share for 68.05 pence in cash (the "Acquisition"), also to be effected by
means of a scheme of arrangement. At the same time, the Trinity board of
directors withdrew its recommendation of the Touchstone Offer as it considered
the Acquisition to be superior and in the best interests of Trinity
Shareholders.
On 25 September 2024, the Court granted Trinity permission to formally
withdraw the scheme of arrangement relating to the Touchstone Offer and, as a
result, the Touchstone Offer lapsed with immediate effect.
The Acquisition remains subject to certain other conditions, including the
approval of Trinity Shareholders at a Court Meeting and a General Meeting and
the Court's sanction of the Scheme at a Court Hearing.
A further update, including the timetable for the Acquisition will be made in
due course.
H1 2024 Operational Highlights
H1 2024 saw a production decline of nine percent (9%) against H1 2023 which is
within the expected natural decline range for mature fields in the absence of
development drilling activities. Production was supported with a programme of
recompletions and workovers.
· H1 2024 average net sales volume was 2,595 bopd (H1 2023: 2,861
bopd).
Sales volumes were supported by five recompletions (H1 2023: three) and 51
workovers and reactivations (H1 2023: 62) undertaken during the Period.
Swabbing production continued across the Onshore and West Coast assets and
contributed approximately ten percent (10%) of Trinity's production. A program
of six heavy workovers is scheduled for the second half of 2024.
· The decrease in production between H1 2024 vs H1 2023 was largely a
result of the failure to return a large producing Trintes well to potential
production in July 2023 due to operational issues. A workover was conducted on
this well in February 2024 to investigate and optimise production, but
ultimately the workover was unsuccessful. A further workover of this well is
being planned for H2 2024.
· The production decline from Onshore Assets was attributed to three
major wells being shut-in during H1 2024 due to mechanical/wellbore problems.
Workovers were carried out during the period to restore production, but they
have proved unsuccessful to date. Further workovers are planned for H2 2024.
· The Jacobin exploration well drilled in 2023 was recompleted in the
Lower Forest horizon in May 2024 following disappointing production results in
the deeper Cruse horizons. The well was placed on pump and is currently
producing around 11 bopd.
· The ABM-151 well in the Brighton Marine block, offshore the West
Coast of Trinidad, which was returned to production on 21 March 2023 following
an extensive refurbishment of surface facilities and the installation of
remote surveillance technology, has maintained production with no significant
decline between H2 2023 (106 bopd) and H1 2024 (109 bopd). Trinity continues
to monitor this well closely as this well has a high risk of sand production.
H1 2024 Financial Highlights
· Average oil price realisation of USD 71.5/bbl for H1 2024 (H1
2023: USD 65.2/bbl). During the Period, the realised price that the Company
received for Onshore and West Coast oil sales was at an average discount of
13.9% to Brent; less than the long-term average discount of approximately
15%. East Coast oil sales are made under a fixed arrangement that is a 15%
discount to Brent.
· The Company remains unhedged.
· Cash balance of USD 8.0 million as at 30 June 2024 (YE 2023: USD
9.8 million) reflecting a combination of stable operating cash generation net
of finalisation of 2023 undisputed Jacobin costs paid in 2024, limited
investment in capex, and cash outflows of USD 1.7m to support the ongoing
acquisition.
· Stable net cashflows generated from operating activities as at H1
2024 USD 4.8 million (H1 2023: USD 6.3 million).
· Revenues of USD 33.8 million were generated in the Period (H1 2023:
USD 33.8 million) driven by lower sales production offset by higher oil
prices.
· Cash operating costs of USD 23.2/bbl (H1 2023: USD 20.1/bbl) mainly
driven by the overall impact of lower sales production (2,595 in H1 2024 vs
2,861 in H1 2023).
· General and administrative costs of USD 6.8/bbl (H1 2023: USD
6.3/bbl) mainly due to the impact of lower sales production.
· Average operating break-even for H1 2024 was increased at USD
42.6/bbl (unaudited) (H1 2023: USD 34.5/bbl) resulting from a slightly higher
operating cost and lower sales volume.
· The Group had drawn borrowings (overdraft) of USD 3.0 million at 30
June 2024 (YE 2023: USD 4.0 million).
2024 Guidance
The sales guidance range for 2024 has been reduced to 2,450-2,550 bopd.
Enquiries
Trinity Exploration & Production Via Vigo Consulting
Jeremy Bridglalsingh, Chief Executive Officer
Julian Kennedy, Chief Financial Officer
Nick Clayton, Non-Executive Chairman
SPARK Advisory Partners Limited (Nominated Adviser) +44 (0)20 3368 3550
Mark Brady
James Keeshan
Cavendish Capital Markets Limited (Broker) +44 (0)20 7397 8900
Leif Powis +44 (0)131 220 6939
Derrick Lee
Neil McDonald
Vigo Consulting Limited t (mailto:trinity@vigoconsulting.com) rinity
(mailto:trinity@vigoconsulting.com) @vigoconsulting.com
Finlay Thomson (mailto:trinity@vigoconsulting.com)
Patrick d' Ancona +44 (0)20 7390 0230
About Trinity (www.trinityexploration.com (http://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 licences and,
across all of the Group's assets, management's estimate of the Group's 2P
reserves as at the end of 2023 was 12.91 mmstb. Group 2C contingent
resources are estimated to be 38.68 mmstb. The Group's overall 2P plus 2C
volumes are therefore 51.58 mmstb.
Trinity is quoted on AIM, a market operated and regulated by the London Stock
Exchange Plc, under the ticker TRIN.
Qualified Person's Statement
The technical information contained in the announcement has been reviewed and
approved by Mark Kingsley, Trinity's Chief Operating Officer. Mark Kingsley
(BSc (Hons) Chemical Engineering, Birmingham University) has over 35 years of
experience in international oil and gas exploration, development and
production and is a Chartered Engineer.
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.
Publication on website
In accordance with Rule 26.1 of the Takeover Code a copy of this announcement
will be available free of charge, subject to certain restrictions relating to
persons resident in Restricted Jurisdictions, on the investor relations
section of Trinity's website at
https://trinityexploration.com/investors/lease-operators-offer/
(https://trinityexploration.com/investors/lease-operators-offer/) by no later
than 12.00 noon (London time) on the business day immediately following this
announcement. The content of the website referred to in this announcement is
not incorporated into and does not form part of this announcement.
Summary of 2024 half-year performance
OPERATIONAL REVIEW
The Group achieved net sales of 2,595 bopd in H1 2024 (H1 2023: 2,861 bopd).
Investment in production-related activities such as recompletions, workovers
and swabbing, together with already automated wells enabled the Company to
limit the decline in first half-year production to 9%, when compared to H1
2023, which is broadly in line with the expected longer term annual decline
rate.
Annual and Half-Year Sales by Region (bopd)
12m 2023 H1 2023 H2 2023 H1 2024
Onshore 1,495 1,512 1,478 1,343
East Coast 943 1,011 876 867
West Coast 353 338 367 385
Total 2,790 2,861 2,721 2,595
Onshore operations
· H1 2024 average net sales were 1,343 bopd, a 11.2% decrease on 2023
(H1 2023 1,512 bopd). This movement was attributed to expected natural
decline, coupled with reduced workover activity and deferral of volumes due to
unplanned disruptions to electrical power supplies (outside Trinity's
control), which caused temporary shut-in for certain key wells in Q2 2024 and
the loss of three major wells due to mechanical/wellbore problems. Trinity
progressed various initiatives in H1 2024 to mitigate, where possible,
disruptions to electrical power supplies.
· A technical study of circa 250 inactive wells was conducted during
the first two months of 2024 resulting in an increased swab well stock in H1
2024. Work programmes are being reviewed for the upcoming budget cycle to
allocate funding for implementation of the recommended work.
A total of 39 workovers and reactivations were completed in H1 2024 (H1 2023:
54) in conjunction with five recompletions in H1 2024 (H1 2023: three).
The H2 2024 work programme involves the progression of five heavy workovers
(recompletions, sand controls, casing repairs) and ongoing base management via
workovers, reactivations and swabbing across all onshore fields.
East Coast operations
· H1 2024 average net sales were 867 bopd (H1 2023: 1,011 bopd) a 14.2%
decrease. The decrease in production sales was largely a result of the
failure to return a large producing well to production in July 2023. Comparing
H1 2024 sales with H2 2023 shows minimal decline. A total of seven workovers
were undertaken during H1 2024 (H1 2023: seven workovers).
The H2 2024 work programme will include routine workovers and reactivations.
West Coast operations
· H1 2024 average net sales were 385 bopd (H1 2023: 338 bopd). The
13.9% increase in sales was the result of additional swabbing resources which
increased swab production and stabilised the field's production. One
workover was conducted during this period (H1 2023: one workover).
H2 2024 work programme is expected to include continued optimisation of swab
production and ongoing base management via workovers.
H1 2024 Key Performance Indicators
The Group was profitable in H1 2024 under Alternative Performance Measures
("APM") and IFRS basis. Higher oil price realisations offset by lower sales
volumes resulted in no change in Revenues to USD 33.8 million (H1 2023: USD
33.8 million) and a 11% decrease in Adjusted EBITDA (Note 19 in the financial
statements) to USD 9.3 million (H1 2023: USD 10.4 million). The Period-end
cash balance was USD 8.0 million (H1 2023: USD 11.3 million) lower than the
opening position at the start of the Period of USD 9.8 million. A summary of
the period-on-period operational and financial highlights are set out
below:
H1 2024 H1 2023 Change %
Average realised oil price(1) USD/bbl 71.5 65.2 10
Average net sales(2) bopd 2,595 2,861 (9)
Revenues USD million 33.8 33.8 0
Cash balance USD million 8.0 11.3 (29)
IFRS Results
Operating Profit before SPT USD million 6.1 5.8 5
Total Comprehensive Income USD million 3.1 0.7 347
Earnings per share - diluted USD cents 7.9 1.7 363
APM Results (APM measures exclude non-cash items)
Adjusted EBITDA(3) USD million 9.3 10.4 (11)
Adjusted EBITDA(4) USD/bbl 19.6 20.1 (3)
Adjusted EBITDA margin(5) % 27.4 30.8 (11)
Adjusted EBIDA after Current Taxes(6) USD million 8.6 6.7 29
Adj. EBIDA after Current Taxes per share - diluted US cents 21.6 16.9 28
Consolidated operating break-even(7) USD/bbl 42.6 34.5 23
Net cash plus working capital surplus(8) USD million 12.5 10.9 15
Notes:
1. Realised price: Actual price received for crude oil sales per
barrel ("bbl").
2. Average net sales: This refers to average sales attributable to
Trinity per day for all operations; lease operatorships and joint ventures.
3. Adjusted EBITDA: Operating Profit before Taxes for the period,
adjusted for Depreciation, Depletion & Amortisation ("DD&A") and other
non-cash expenses, namely Share Option Expenses, Impairment of Financial
Assets, FX Gains/Losses and Fair Value Gains/Losses on Derivative financial
instruments.
4. Adjusted EBITDA (USD/bbl): Adjusted EBITDA/sales volume over the
Period.
5. Adjusted EBITDA Margin (%): Adjusted EBITDA/Revenues.
6. Adjusted EBIDA after Current Taxes: Adjusted EBITDA less
Supplemental Petroleum Taxes ("SPT"), Petroleum Profits Tax ("PPT") and
Unemployment Levy ("UL").
7. Group operating break-even: The realised price/bbl where the
Adjusted EBITDA/bbl for the Group is equal to zero.
8. Net cash plus working capital surplus: Current Assets less
Current Liabilities (other than Derivative financial asset / liability and
Provision for other liabilities).
FINANCIAL REVIEW
Income Statement Analysis
H1 2024 H1 2023 Change %
Production
Average realised oil price (USD/bbl) 71.5 65.2 10
Average net Sales (bopd) 2,595 2,861 (9)
Statement of Comprehensive Income USD'000 USD'000 USD'000
Operating revenues 33,804 33,754 50
Operating expenses excluding non-cash items and SPT (24,533) (23,367) (1,166)
Operating profit before non-cash items and SPT 9,271 10,387 (1,116)
DD&A (2,984) (4,472) 1,488
Other Non-Cash Items (225) (87) (138)
Operating profit before SPT 6,062 5,828 234
SPT -- (3,247) 3,247
Operating profit before Impairment, Exceptional items and Decommissioning 6,062 2,581 3,481
reduction
Impairment (398) -- (398)
Exceptional items (1,714) (371) (1,343)
Decommissioning reduction 826 -- 826
Operating Profit after Exceptional items 4,776 2,210 2,566
Finance income 13 25 (12)
Finance cost (1,001) (1,124) 123
Profit Before Taxation 3,788 1,111 2,677
Income Taxation expense (662) (428) (234)
Profit After Taxation 3,126 683 2,443
Total Comprehensive Income for the period
Exchange differences on translation of foreign operations 1 (6) 6
Total Comprehensive Income 3,127 677 2,449
Operating Revenues
Operating revenues of USD 33.8 million (H1 2023: USD 33.8 million), unchanged.
Operating expenses (excluding non-cash items)
Operating expenses (excluding non-cash items) of USD (24.5) million (H1 2023:
USD (23.4) million) comprised:
· Royalties of USD (10.3) million (H1 2023: USD (9.7) million), mainly
due to higher average oil prices.
· Production costs ("Opex") of USD (11.0) million (H1 2023: USD (10.4)
million), increase driven by additional safety measures on the East Coast
which included vessel stand by response, and swabbing activities.
· G&A expenditure of USD (3.2) million (H1 2023: USD (3.3)
million), mainly due to a reduction in business travel costs.
Non-cash operating expenses
Non-cash operating expenses of USD (3.2) million (H1 2023: USD (4.7) million)
comprised:
· Depreciation, Depletion and Amortisation ("DD&A") charges of USD
(3.0) million (H1 2023: USD (4.5) million).
· Share option expense USD (0.2) million (H1 2023: USD (0.3) million).
· Foreign exchange gain USD 0.0 million (H1 2023: USD 0.1 million).
Operating Profit Before Supplemental Petroleum Taxes ("SPT")
The operating profit before SPT for the Period amounted to USD 6.1 million (H1
2023: USD 5.8 million). The increase is mainly due to a combination of
maintaining revenues through higher prices received, lower depreciation
expense and operating cost maintenance.
SPT
There were no SPT liabilities incurred for the period as the weighted average
realised price of crude oil was below the SPT threshold of USD 75.0/bbl. There
is unused Investment Tax Credit of USD 3.4 million from 2023 and USD 0.5
million for H1 2024 which will be carried forward for future use, limited to a
one-year period. SPT is classified as operating expenses rather than income
taxation under IFRS.
Exceptional items
Exceptional items charge of USD (1.7) million (H1 2023: USD (0.4) million)
relates to:
· USD (1.7) million in financial advisory and legal costs associated
with the pending acquisition of the Trinity Group (H1 2023: USD 0.4 million
incurred in cyber incident and Trintes Bravo fire incident).
Net Finance Cost
Net finance costs for the period of USD (1.0) million (H1 2023: USD (1.1)
million), comprising:
· Unwinding of the discount on the decommissioning provision of USD
(1.0) million (H1 2023: USD (1.1) million).
Income Taxation
Taxation charge for the period was USD (0.7) million (H1 2023: USD (0.4)
million), comprising:
· Petroleum Profits Tax ("PPT") of USD (0.5) million (H1 2023: USD
(0.3) million).
· Unemployment Levy ("UL") of USD (0.2) million (H1 2023: USD (0.1)
million).
· Net deferred tax of nil (H1 2023: nil), refer to note 15.
As at 30 June 2024, the Group had unrecognised tax losses of USD 191.0 million
(H1 2023: USD 199.3 million) which have no expiry date.
Total Comprehensive Income
Total Comprehensive Income for the Period was USD 3.1 million (H1 2023: USD
0.7 million.)
Cash Flow Analysis
Opening Cash Balance
Trinity began the year with an initial cash balance of USD 9.8 million (2023:
USD 12.1 million).
Summary of Statement of Cash Flows
H1 2024 H1 2023
USD'000 USD'000
Opening cash balance 9,819 12,131
Cash movement
Cash inflow from operating activities 7,543 6,769
Changes in working capital (2,506) (37)
Income taxation paid (240) (475)
Net cash inflow from operating activities 4,797 6,257
Net cash outflow from investing activities (5,214) (5,576)
Net cash outflow from financing activities (1,366) (1,603)
Decrease in cash and cash equivalents (1,783) (922)
Effects of foreign exchange rates on cash (5) 92
Closing cash balance 8,031 11,301
Net cash inflow from operating activities
Net cash inflow from operating activities was USD 4.8 million (H1 2023: USD
6.3 million):
· Operating activities for H1 2024 generated an operating cash flow
before changes in working capital and income taxes of USD 7.5 million (H1
2023: USD 6.8 million).
· Changes in working capital resulted in a net decrease of USD (2.5)
million (H1 2023: net decrease of USD (0.0) million).
· Income Taxation - PPT and UL paid USD (0.2) million (H1 2023: USD
(0.5) million) resulting from lower taxable profits resulting from lower oil
price.
Cash outflow from investing activities
Investing cash outflows for H1 2024 was USD (5.2) million (H1 2023: USD (5.6)
million) which included infrastructure investments across Trinity's assets,
production capex including recompletions in H1 2024, subsurface capex and
exploration and evaluation capex.
Net cash outflow from financing activities
The financing cash outflow for H1 2024 was USD (1.4) million (H1 2023: USD
(1.6) million), comprising USD (1.0) million repayment of bank overdraft, USD
(0.4) million cash payment on leases.
Closing Cash Balance
Trinity's cash balance at 30 June 2024 was USD 8.0 million (31 December 2023:
USD 9.8 million).
Statement of Financial Position Analysis
H1 2024 YE 2023 Change
USD'000 USD'000 USD'000
Assets:
Non-current Assets 86,968 88,170 (1,202)
Current Assets 25,175 25,953 (778)
Liabilities:
Non-Current Liabilities 46,360 47,106 (746)
Current Liabilities 13,406 17,972 (4,566)
Equity and Reserves:
Capital and Reserves to Equity Holders 52,377 49,045 3,332
Cash plus working capital surplus 12,491 8,603 3,888
Non-current Assets
Non-current assets decreased by (USD 1.2 million) to USD 87.0 million at H1
2024 from USD 88.2 million at YE 2023:
· Property, plant and equipment USD 31.3 million (YE 2023: USD 35.2
million) decrease of USD 3.9 million relates to USD 1.7 million additions less
DDA of USD (3.0) million and decommissioning reduction USD (2.6) million and
impairment of USD (0.2) million.
· Intangible assets USD 31.7 million (YE 2023: USD 31.4 million)
increase of USD 0.3 million mainly relates to exploration G&G costs for
the Galeota and Buenos Ayres Block USD 0.4 million less amortisation of USD
(0.1) million.
· Deferred tax asset of USD 16.4 million (YE 2023: USD 15.7 million).
· Abandonment fund and performance bond of USD 5.8 million (YE 2023:
USD 5.6 million).
· Right of use asset of USD 1.8 million (YE 2023: USD 0.3 million)
relating to motor vehicles, office building, staff house and office equipment
leases that met the recognition criteria of a lease under IFRS 16.
Current Assets
Current assets decreased by USD 0.8 million to USD 25.2 million at H1 2024
from USD 25.9 million at YE 2023:
· Cash and cash equivalents of USD 8.0 million (YE 2023: USD 9.8
million). Reduction of USD 1.8 million mainly due to repayment of overdraft
facility (USD 1.0 million) and a combination of stable operating cash
generation mainly being impacted by spillover Jacobin-1 well costs paid in
2024, business development/acquisition costs and payments of USD 1.7 million
made in connection with the takeover offers.
· Trade and other receivables of USD 12.7 million (YE 2023: USD 11.7
million).
o Trade and other receivables (less impairment) of USD 3.9 million (YE 2023:
USD 4.4 million)
o VAT recoverable of USD 7.6 million (YE 2023: USD 6.0 million).
o Prepayments and other receivables (less impairment) of USD 1.2 million (YE
2023: USD 1.3 million).
· Inventories USD 4.0 million (YE 2023: USD 3.9 million) to support
normal business operations.
· Taxation recoverable USD 0.5 million (YE 2023: USD 0.5 million)
Non-current Liabilities
Non-current liabilities decreased to USD 46.4 million at H1 2024 from USD 47.1
million at YE 2023, primarily due to:
· Provision for other liabilities (predominantly decommissioning costs)
of USD 42.6 million (YE 2023: USD 45.1 million). The decrease is mainly due to
revision of the discount rate at H1 2024.
· Deferred tax liability USD 2.5 million (YE 2023: USD 1.9 million).
· Lease liability of USD 1.3 million (YE 2023: USD 0.1 million). The
increase is mainly due to new leases entered into in H1 2024.
Current Liabilities
Current liabilities decreased to USD 13.4 million at H1 2024 (YE 2023: USD
18.0 million) primarily due to:
· Trade and other payables of USD 8.7 million (YE 2023: USD 13.1
million).
o Trade payables of USD 3.5 million (YE 2023: USD 3.2 million).
o Accruals and other payables of USD 4.6 million (YE 2023: USD 8.3 million)
significantly reduced due to payments of Jacobin-1 Well related costs accrued
in 2023 and paid in 2024.
o SPT payable of nil (YE 2023: USD 1.4 million).
o VAT payable of USD 0.6 million (YE 2023: USD 0.2 million)
· CIBC FirstCaribbean bank overdraft facility USD 3.0 million (YE 2023:
USD 4.0 million). The reduction is mainly due to partial repayment of
overdraft facility.
· Provision for other liabilities of USD 0.7 million (YE 2023: USD 0.6
million) mainly related to the Jacobin-1 well disputed drilling cost
provision.
· Lease liability of USD 0.5 million (YE 2023: USD 0.2 million).
· Taxes payable of USD 0.5 million (YE 2023: USD 0.1 million).
Cash plus Working Capital Surplus
Cash plus working capital surplus calculated as Current Assets less Current
Liabilities (excluding Provisions for other liabilities and Derivative
assets/(liabilities)) increased by 45% to USD 12.5 million (YE 2023: USD 8.6
million).
Reconciliation between Adjusted EBIDA after Current Taxes and Cash Inflow from
Operating Activities
H1 2024 USD'000 H1 2023
USD'000
Adjusted EBIDA after Current Taxes 8,595 6,670
Exceptional items (1,714) (371)
Changes in Working Capital (2,506) (37)
Income tax incurred 662 470
Income tax paid (240) (475)
Cash flow from operating activities 4,797 6,257
APPENDIX 1: TRADING SUMMARY
A summary of realised price, production, royalties, Opex, G&A and
operating break-evens expenditure metrics is set out below:
Trading Summary Table
Details H1 2024 H1 2023 Change %
Realised price (USD/bbl) 71.5 65.2 10
Sales (bopd)
Onshore 1,343 1,512 (11)
West Coast 385 338 14
East Coast 867 1,011 (14)
Group Consolidated 2,595 2,861 (9)
Metrics (USD/bbl)
Royalties/bbl - Onshore 29.8 24.3 23
Royalties/bbl - West Coast 13.3 12.0 11
Royalties/bbl - East Coast 13.5 12.7 6
Royalties/bbl - Consolidated 21.9 18.8 17
Opex/bbl - Onshore 22.7 16.9 34
Opex/bbl - West Coast 29.6 26.9 10
Opex/bbl - East Coast 30.6 22.5 36
Opex/bbl - Group Consolidated 23.2 20.1 15
G&A/bbl - Group Consolidated 6.8 6.3 9
Operating break-even (USD/bbl)
Onshore 32.5 22.8 43
West Coast 34.1 32.3 6
East Coast 36.5 26.3 39
Group Consolidated 42.6 34.5 31
Notes: Group consolidated operating break-even: The realised price/bbl for
which the adjusted EBITDA/bbl exclusive of net derivative expense/income for
the Group is equal to zero.
STATEMENT OF DIRECTORS' RESPONSIBILITY
The Directors confirm that this condensed consolidated interim financial
information has been prepared in accordance with International Accounting
Standards ("IAS") and that the interim management report includes:
· an indication of important events that have occurred during the first
six (6) months and their impact on the condensed set of financial statements,
and a description of the principal risks and uncertainties for the remaining
six (6) months of the financial year; and
· the management report, which is incorporated into the directors'
report, includes a fair review of the development and performance of the
business and the position of the Company and the undertakings included in the
consolidation taken as a whole, together with a description of the principal
risks and uncertainties that they face; and
· material related party transactions in the first six (6) months and
any material changes in the related-party transactions described in the last
annual report.
A list of the current Directors is maintained on the Trinity Exploration &
Production plc website www.trinityexploration.com.
By order of the Board
Jeremy Bridglalsingh
Chief Executive Officer
26 September 2024
INDEPENDENT REVIEW REPORT TO TRINITY EXPLORATION & PRODUCTION plc
Conclusion
Based on our review, nothing has come to our attention that causes us to
believe that the condensed set of financial statements in the half-yearly
financial report for the six months ended 30 June 2024 is not prepared, in all
material respects, in accordance with UK adopted International Accounting
Standard 34 and the London Stock Exchange AIM Rules for Companies.
We have been engaged by the company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 30
June 2024 which comprises of Condensed Consolidated Statement of Comprehensive
Income, Condensed Consolidated Statement of Financial Position, Condensed
Consolidated Statement of Changes in Equity and Condensed Consolidated Cash
Flow Statements and notes to the Condensed Consolidated Interim Financial
Statements.
Basis for conclusion
We conducted our review in accordance with Revised International Standard on
Review Engagements (UK) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity" ("ISRE (UK) 2410
(Revised)"). A review of interim financial information consists of making
enquiries, primarily of persons responsible for financial and accounting
matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with
International Standards on Auditing (UK) and consequently does not enable us
to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit
opinion.
As disclosed in note 1, the annual financial statements of the Group are
prepared in accordance with UK adopted international accounting standards. The
condensed set of financial statements included in this half-yearly financial
report has been prepared in accordance with UK adopted International
Accounting Standard 34, "Interim Financial Reporting.
Conclusions relating to going concern
Based on our review procedures, which are less extensive than those performed
in an audit as described in the Basis for conclusion section of this report,
nothing has come to our attention to suggest that the directors have
inappropriately adopted the going concern basis of accounting or that the
directors have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review procedures performed in accordance with
ISRE (UK) 2410 (Revised), however future events or conditions may cause the
Group to cease to continue as a going concern.
Responsibilities of directors
The directors are responsible for preparing the half-yearly financial report
in accordance with the London Stock Exchange AIM Rules for Companies which
require that the half-yearly report be presented and prepared in a form
consistent with that which will be adopted in the Company's annual accounts
having regard to the accounting standards applicable to such annual accounts.
In preparing the half-yearly financial report, the directors are responsible
for assessing the company's ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to
liquidate the company or to cease operations, or have no realistic alternative
but to do so.
Auditor's responsibilities for the review of the financial information
In reviewing the half-yearly report, we are responsible for expressing to the
Company a conclusion on the condensed set of financial statement in the
half-yearly financial report. Our conclusion, including our Conclusions
Relating to Going Concern, are based on procedures that are less extensive
than audit procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the rules of the London
Stock Exchange AIM Rules for Companies for no other purpose. No person is
entitled to rely on this report unless such a person is a person entitled to
rely upon this report by virtue of and for the purpose of our terms of
engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept responsibility for this report to
any other person or for any other purpose and we hereby expressly disclaim any
and all such liability.
BDO LLP
Chartered Accountants
London, UK
26 September 2024
BDO LLP is a limited liability partnership registered in England and Wales
(with registered number OC305127).
Trinity Exploration & Production plc
Condensed Consolidated Statement of Comprehensive Income
for the period ended 30 June 2024
(Expressed in United States Dollars)
Notes 6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
Operating Revenues
Crude oil sales 33,787 33,751 69,819
Other income 17 3 7
33,804 33,754 69,826
Operating Expenses
Royalties (10,359) (9,711) (20,864)
Production costs (10,958) (10,402) (22,402)
Depreciation, depletion and amortisation 8-10 (2,984) (4,472) (8,935)
General and administrative expenses (3,230) (3,254) (7,375)
(Impairment)/reversal of financial assets (24) 25 (64)
Share option expense 14 (222) (254) (528)
Foreign exchange gain/(loss) 35 142 (65)
(27,742) (27,926) (60,233)
Operating Profit Before Supplemental Petroleum Taxes ("SPT") 6,062 5,828 9,593
SPT -- (3,247) (5,697)
Operating Profit Before Impairment, Exceptional items and Decommissioning 6,062 2,581 3,896
reduction
Impairment 3 (398) -- (13,462)
Exceptional items 5 (1,714) (371) (307)
Decommissioning reduction 4 826 -- 2,508
Operating Profit/(Loss) 4,776 2,210 (7,365)
Finance Income 7 13 25 50
Finance cost 7 (1,001) (1,124) (2,214)
Profit/(Loss) Before Income Taxation 3,788 1,111 (9,529)
Income Taxation expense 6 (662) (428) 2,725
Profit/(Loss) for the period 3,126 683 (6,804)
Other Comprehensive Income/(loss)
Exchange differences on translation of foreign operations 1 (6) 1
Total Comprehensive Income/(loss) for the period 3,127 677 (6,803)
Earnings per share (expressed in dollars per share)
Basic 20 0.08 0.02 0.00
Diluted 0.08 0.02 0.00
Trinity Exploration & Production plc
Condensed Consolidated Statement of Financial Position
for the period ended 30 June 2024
(Expressed in United States Dollars)
Notes As at 30 June 2024 As at 30 June 2023 As at 31 December 2023
ASSETS $'000 $'000 $'000
(unaudited) (unaudited) (audited)
Non-current Assets
Property, plant and equipment 8 31,337 44,134 35,188
Right-of-use assets 9 1,798 572 312
Intangible assets 10 31,685 38,799 31,399
Abandonment fund 5,175 4,750 4,962
Performance bond 606 602 606
Deferred tax asset 15 16,367 12,465 15,703
86,968 101,322 88,170
Current Assets
Inventories 3,939 5,100 3,916
Trade and other receivables 11 12,702 9,773 11,709
Taxation recoverable 503 -- 509
Cash and cash equivalents 8,031 11,301 9,819
25,175 26,174 25,953
Total Assets 112,143 127,496 114,123
Equity
Capital and Reserves Attributable to Equity Holders
Share capital 12 399 399 399
Share based payment reserve 14 2,465 3,224 2,812
Reverse acquisition reserve (89,268) (89,268) (89,268)
Treasury shares 13 (1,481) (2,088) (1,553)
Translation reserve (1,667) (1,654) (1,666)
Retained earnings 141,929 145,877 138,321
Total Equity 52,377 56,490 49,045
Non-current Liabilities
Lease liabilities 9 1,314 239 137
Deferred tax liability 15 2,525 1,898 1,862
Provision for other liabilities 16 42,475 53,469 45,076
Employee benefits 46 28 31
46,360 55,634 47,106
Current Liabilities
Trade and other payables 17 8,744 12,833 13,094
Bank overdraft 18 3,000 2,000 4,000
Lease liabilities 9 476 394 208
Provision for other liabilities 722 145 622
Dividend Payable 4 -- 5
Taxation Payable 460 -- 43
13,406 15,372 17,972
Total Liabilities 59,766 71,006 65,078
Total Shareholders' Equity and Liabilities 112,143 127,496 114,123
Trinity Exploration & Production plc
Condensed Consolidated Statement of Changes in Equity
for the period ended 30 June 2024
(Expressed in United States Dollars)
Share Capital Share Based Payment Reserve Reverse Acquisition Reserve Translation Reserve Retained Earnings Total
Treasury
Shares
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Balance at 1 January 2023 399 2,990 (89,268) (1,522) (1,667) 145,199 56,131
Share based payment charge -- 254 -- -- -- -- 254
LTIPs exercised -- (20) -- -- -- 15 (5)
Treasury shares (note 13) -- -- -- (566) -- -- (566)
Translation difference -- -- -- -- 19 (20) (1)
Total comprehensive profit for the period -- -- -- -- (6) 683 677
Balance at 30 June 2023 (unaudited) 399 3,224 (89,268) (2,088) (1,654) 145,877 56,490
Balance at 1 January 2024 399 2,812 (89,268) (1,553) (1,666) 138,321 49,045
Share based payment charge -- 208 -- -- -- -- 208
Options lapsed -- (555) -- -- -- 555 --
Treasury shares (note 13) -- -- -- 72 -- (72) --
Dividends -- -- -- -- -- (1) (1)
Translation difference -- -- -- -- (1) (1) (2)
Total comprehensive profit for the period -- -- -- -- -- 3,127 3,127
Balance at 30 June 2024 (unaudited) 399 2,465 (89,268) (1,481) (1,667) 141,929 52,377
Trinity Exploration & Production plc
Condensed Consolidated Statement of Cashflows
for the period ended 30 June 2024
(Expressed in United States Dollars)
Notes 6 months to 30 June 2024 6 months to 30 June 2023 Year ended 31 December 2023
$'000 $'000 $'000
(unaudited) (unaudited) (audited)
Operating Activities
Profit /(Loss) before taxation 3,788 1,111 (9,529)
Adjustments for:
Foreign exchange difference (35) (142) 65
Finance Income (13) (25) (50)
Finance cost 7 92 71 137
Share option expense 222 254 528
Finance cost - decommissioning provision 7 909 1,053 2,077
Depreciation, depletion and amortisation 8-10 2,984 4,472 8,935
Loss on disposal -- -- 15
Impairment of exploration and evaluation assets 72 -- 11,766
Impairment of property, plant and equipment 8 210 -- 1,542
Inventory Impairment 3 116 -- --
Impairment/(reversal of impairment) loss on financial assets 24 (25) 64
Other non-cash items -- -- 147
Net release of decommissioning costs (826) -- (2,508)
7,543 6,769 13,189
Changes In Working Capital
(Increase)/decrease in Inventory (139) (485) 699
(Increase)/decrease in Trade and other receivables (1,141) 691 (1,664)
(Decrease)/Increase in Trade and other payables (1,226) (243) 1,822
(2,506) (37) 857
Income taxation paid (240) (475) (831)
Net Cash Inflow From Operating Activities 4,797 6,257 13,215
Investing Activities
Exploration and Evaluation Assets (1,287) (2,052) (8,972)
Computer software and investment in research & development -- (284) (492)
Purchase of property, plant & equipment (3,927) (3,240) (5,917)
Net Cash Outflow From Investing Activities (5,214) (5,576) (15,381)
Financing Activities
Finance income 13 25 50
Finance cost (33) (28) (50)
Principal paid on lease liability (286) (291) (589)
Interest paid on lease liability (59) (43) (86)
Dividends paid (1) -- (231)
Bank overdraft repayment (1,000) (700) 1,300
Acquisition of treasury shares -- (566) (566)
Net Cash Outflow From Financing Activities (1,366) (1,603) (172)
Decrease in Cash and Cash Equivalents (1,783) (922) (2,338)
Cash And Cash Equivalents
At beginning of period 9,819 12,131 12,131
Effects of foreign exchange rates on cash (5) 92 26
Decrease (1,783) (922) (2,338)
At end of period 8,031 11,301 9,819
Trinity Exploration & Production plc
Notes to the Condensed Consolidated Financial Statements for the period ended
30 June 2024
1 Background, Accounting Policies and Estimates
Background
Trinity Exploration & Production plc ("Trinity") is incorporated and
registered in England and trades on the Alternative Investment Market ("AIM"),
a market operated by London Stock Exchange plc. Trinity ("the Company") and
its subsidiaries (together "the Group") are involved in the exploration,
development and production of oil reserves in Trinidad and Tobago ("T&T").
Basis of Preparation
These condensed consolidated interim financial statements for the six months
ended 30 June 2024 have been prepared in accordance with international
accounting standards as adopted in the United Kingdom. The condensed
consolidated interim financial statements should be read in conjunction with
the annual financial statements for the year ended 31 December 2023, which
have also been prepared in accordance with UK IFRS.
The results for the six months ended 30 June 2024 and 30 June 2023 have been
reviewed, not audited, and do not comprise statutory accounts within the
meaning of section 434 of the Companies Act 2006. Statutory accounts for the
year ended 31 December 2023 were approved by the board of directors and
delivered to the Registrar of Companies. The report of the independent
auditors on those accounts was unqualified. The interim report has been
reviewed by the auditor.
Going Concern
The Board has adopted the going concern basis in preparing the condensed
consolidated interim financial statements.
In making their going concern assessment, the Board have considered the
Group's current financial position, budget and cash flow forecast. The base
case cashflow forecast at a minimum contemplated a 12-month outlook
illustrating the ability of the Group to operate on a going concern basis one
year post completion of the interim review. The base cashflow forecast
demonstrated that the Group will remain with a positive cash flow position,
and as such being able to meet its liabilities as they fall due.
The base case cashflow forecast was prepared considering the follow:
· Future oil prices are assumed to be in line with the forward
curve prevailing as at 1 August 2024. The forward price curve applied in the
cash flow forecast starts at a realised price of $69.3/bbl in August 2024,
fluctuating each month down to $67.5/bbl in December 2024 through to $64.3/bbl
in December 2025;
· Average forecast production for the years to December 2024 and
December 2025 are in line with the Group's asset development plans, with
production being maintained by recompletions, workovers and swabbing
activities;
· No SPT is assumed to be incurred on both onshore and offshore
assets in 2024 or 2025, as the forecast realised price is below $75.0/bbl;
· Trinity continuing to progress various growth and business
development opportunities;
· No derivative instruments being put in place for 2024; and
· No drawdown of working capital overdraft facility
Management considers this is a reasonable base scenario, reflecting a prudent
outlook for the future oil price, production profile and costs. The cash flow
forecast showed that the Group will remain in a strong financial position for
at least the next twelve months, and as such being able to meet its
liabilities as they fall due.
Management considered a separate stressed scenario including:
· the effect of reductions in Brent oil prices at USD 60.0/bbl
being sustained across the forecast period, noting that the base case pricing
is in line with market prices; and
· the compounded impact of a reduction in production by 10%.
The stressed case cash flow forecast allows for the impact of mitigating
actions that are within the Group's control which include:
· Reducing non-core and discretionary opex and administrative costs
across the forecast period.
· Reducing discretionary capital expenditure and capital returns
over the forecast period.
The stressed case cashflow forecasts demonstrate that the Group's cash
balances are maintained under such scenarios and as such are sufficient to
meet the Group's obligations as they fall due.
As a result, at the date of approval of the interim financial statements, the
Board have a reasonable expectation that the Group has sufficient and adequate
resources to continue in existence for at least twelve months post approval of
these financial statements . For this reason, the Board have concluded it is
appropriate to continue to adopt the going concern basis of accounting in the
preparation of the condensed consolidated interim financial statements.
Accounting policies
The accounting policies adopted are consistent with those of the previous
financial year 31 December 2023 and corresponding interim reporting period,
except for those set out in the standards below:
- New standards and amendments effective for periods beginning on
1 January 2024 and therefore relevant to these condensed consolidated interim
financial statements.
· IFRS 17 Insurance Contracts
· Disclosure of Accounting Policies (Amendments to IAS 1
Presentation of Financial Statements and IFRS Practice Statement 2 Making
Materiality Judgements); Definition of Accounting Estimates (Amendments to IAS
8 Accounting Policies, Changes in Accounting Estimates and Errors); Deferred
Tax related to Assets and Liabilities arising from a Single Transaction
(Amendments to IAS 12 Income Taxes); and
· International Tax Reform - Pillar Two Model Rules (Amendment to
IAS 12 Income Taxes) (effective immediately upon the issue of the amendments
and retrospectively).
Cash and cash equivalents
For the purpose of presentation in the condensed consolidated statement of
cash flows, cash and cash equivalents includes cash on hand, deposits held at
call with financial institutions, and other short-term, highly liquid
investments with original maturities of three months or less that are readily
convertible to known amounts of cash.
Trade receivables
Trade receivables are amounts due from the Group's sole customer for crude oil
sold in the ordinary course of business. They are generally due for settlement
within 30 days and therefore are all classified as current. Trade receivables
are recognised initially at the amount of consideration that is unconditional
unless they contain significant financing components, when they are recognised
at fair value.
Impairment of financial assets
The Group applied the simplified approach to determine impairment of its trade
and other receivables. The simplified approach requires expected lifetime
losses to be recognised from initial recognition of the receivables. This
involves determining the expected loss rates using a provision matrix that is
based on the Group's historical default rates observed over the expected life
of the receivables and adjusted for forward looking estimates. This is then
applied to the gross carrying amount of the receivables to arrive at the loss
allowance for the period.
Financial assets recognition of impairment provisions under IFRS 9 is based on
the expected credit losses ("ECL") model. The ECL model is applicable to
financial assets classified at amortised cost and contract assets under IFRS
15: Revenue from Contracts with Customers. The measurement of ECL reflects an
unbiased and probability weighted amount that is available without undue cost
or effort at the reporting date, about past events, current conditions and
forecasts of future economic conditions.
Trade and other payables
Trade and other payables are recognised initially at fair value and
subsequently measured at amortised cost using the effective interest rate
method.
Segment Information
Management have considered the requirements of IFRS 8 Operating Segments, in
regard to the determination of operating segments, and concluded that the
Group has only one significant operating segment being the exploration and
development, production and extraction of hydrocarbons.
All revenue is generated from crude oil sales in T&T to one customer,
Heritage Petroleum Company Limited ("Heritage"). All non-current assets of the
Group are located in T&T.
Derivative financial instruments and hedging activities
The Company has not applied hedge accounting and all derivatives are measured
at fair value through profit and loss.
Estimates
The preparation of condensed consolidated interim financial statements
requires management to make judgements, estimates and assumptions that affect
the application of accounting policies and the reported amounts of assets and
liabilities, income and expenses. Actual results may differ from these
estimates.
In preparing these condensed consolidated interim financial statements, the
significant judgements made by management in applying the Group's accounting
policies and the key sources of estimation uncertainty were the same as those
that applied to the consolidated financial statements for the year ended 31
December 2023. Reference can be made note 3 (Critical Accounting Estimates and
Judgements), in the Annual Report December 2023.
2 Financial risk management
Financial risk factors
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk, fair value interest rate risk, cash flow interest
rate risk and price risk), credit risk and liquidity risk. The Group's overall
risk management program seeks to minimise potential adverse effects on the
Group's financial performance.
The condensed consolidated interim financial statements do not include all
financial risk management information and disclosures required in the annual
financial statements; they should be read in conjunction with the Group's
annual financial statements for 2022, which can be found at
www.trinityexploration.com (http://www.trinityexploration.com/) .
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and
short-term funds and the availability of funding through an adequate amount of
committed credit facilities. Management monitors rolling forecasts of the
Group's liquidity and cash and cash equivalents on the basis of expected cash
flow. As at 30 June 2024, the Group held cash at bank of USD 8.0 million (31
December 2023: USD 9.8 million).
Credit risk
Credit risk arises from Cash and Cash equivalents, deposits with banks and
financial institutions, as well as credit exposures to customers, including
outstanding receivables. For banks and financial institutions, management
determines the placement of funds based on its judgement and experience to
minimise risk.
All sales are made to a state-owned entity -Heritage.
3 Impairment
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Impairment of inventory 116 -- --
Impairment of Jacobin Well Costs 72 -- 9,634
Impairment of PS4 E&E costs -- -- 2,132
Impairment of property, plant and equipment 210 -- 1,549
Other impairment of property, plant and equipment -- -- 147
Total 398 -- 13,462
Management performed an impairment assessment at 30 June 2024 resulting in USD
0.2 million in impairment.
4 Decommissioning Release/Reduction
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Reduction of Decommissioning costs estimates (826) -- (114)
Release of Decommissioning Liability-Tabaquite Field -- -- (2,394)
Decommissioning release/reduction total (826) -- (2,508)
5 Exceptional Items
Items that are material either because of their size, their nature, or that
are non-recurring are considered as exceptional items and are presented within
the line items to which they best relate. During the current period,
exceptional items as detailed below have been included in the condensed
consolidated statement of comprehensive income. An analysis of the amounts
presented as exceptional items in these condensed interim financial statements
are highlighted below.
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Legal fees 1,252 -- --
Financial adviser fees 254 -- --
Other fees 208 -- --
ICT incident costs -- 280 161
Bravo fire costs -- 91 146
Total 1,714 371 307
6 Income taxation expense
a. Taxation 30 June 2024 30 June 2023 31 December 2023
Current tax $'000 $'000 $'000
Petroleum profits tax 474 336 422
Unemployment levy 188 134 169
Deferred tax
- Current period
Movement in asset due to tax losses recognised (Note 16) (664) -- (3,238)
Movement in liability due to accelerated tax depreciation (note 16) 705 -- (78)
Unwinding of deferred tax on fair value uplift (41) (42) --
Income tax expense 662 428 (2,725)
Current tax: The Group's effective tax rate varies based on jurisdiction.
Tax rates: 30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Corporation Tax UK 19% 19% 19%
Corporation Tax TT 30% 30% 30%
Petroleum Profits Tax 50% 50% 50%
Unemployment levy 5% 5% 5%
Deferred tax:
The Group has a deferred tax asset of $16.4 million on its condensed
consolidated statement of financial position which is the amount it expects to
recover within 3 years based on the expected taxable profits generated by
Group companies over that period.
7 Finance income
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Interest income 13 25 50
Finance costs
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Decommissioning - Unwinding of discount (909) (1,053) (2,077)
Interest and other expenses on overdraft (33) (28) (51)
Interest on leases (59) (43) (86)
(1,001) (1,124) (2,214)
8 Property, Plant and Equipment
Plant & Equipment Leasehold & Buildings Oil & Gas Property Total
$'000 $'000 $'000 $'000
Opening net book amount at 1 January 2024 5,141 1,106 28,941 35,188
Additions 1,131 3 577 1,711
Reduction to decommissioning estimate -- -- (2,679) (2,679)
Impairment (note 3) -- -- (210) (210)
DD&A charge for period (473) (91) (2,109) (2,673)
Closing net book amount at 30 June 2024 5,799 1,018 24,520 31,337
At 30 June 2024
Cost 20,840 3,513 327,821 352,174
Accumulated DD&A and impairment (15,041) (2,495) (303,301) (320,837)
Closing net book amount at 30 June 2024 5,799 1,018 24,520 31,337
Leasehold & Buildings Oil & Gas Property Total
Plant & Equipment
$'000 $'000 $'000 $'000
Opening net book amount at 1 January 2023 4,255 1,271 39,461 44,987
Additions 868 12 2,368 3,248
DD&A charge for period (293) (96) (3,712) (4,101)
Closing net book amount at 30 June 2023 4,830 1,187 38,117 44,134
At 30 June 2023
Cost 19,061 3,495 325,865 348,421
Accumulated DD&A and impairment (14,231) (2,308) (287,748) (304,287)
Closing net book amount at 30 June 2023 4,830 1,187 38,117 44,134
Leasehold & Buildings Oil & Gas Assets Total
Plant & Equipment
$'000 $'000 $'000 $'000
Year ended 31 December 2023
Opening net book amount at 1 January 2022 4,255 1,271 39,461 44,987
Additions 1,573 27 5,306 6,906
Transfers -- -- 319 319
Disposals (21) -- (6) (27)
Tabaquite decommissioning asset relinquishment -- -- (632) (632)
Reduction to decommissioning estimate -- -- (6,508) (6,508)
Impairment charge (note 3) (36) -- (1,653) (1,689)
DD&A charge for year (630) (192) (7,346) (8,168)
Closing net book amount 31 December 2023 5,141 1,106 28,941 35,188
At 31 December 2023
Cost 19,709 3,510 327,454 350,673
Accumulated DD&A and impairment (14,568) (2,404) (298,513) (315,485)
Closing net book amount 5,141 1,106 28,941 35,188
9 Leases
(i) Amounts recognised in the condensed consolidated statement of
financial position.
The condensed consolidated statement of financial position shows the following
amounts relating to leases:
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Right-of-use assets
Non-current assets 1,798 572 312
Lease Liabilities
Current 476 394 208
Non-current 1,314 239 137
1,790 633 345
The ROU assets relate to motor vehicles, office building, staff house and
office equipment leases that met the recognition criteria of a Lease under
IFRS 16.
(ii) Amounts recognised in the condensed consolidated statement of
comprehensive income.
The condensed consolidated statement of comprehensive income shows the
following amounts relating to leases:
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Depreciation charge of ROU assets
Depreciation (174) (265) (534)
Interest expense (including finance cost) (59) (43) (135)
The total cash outflow for leases in June 2024 was $0.3 million (June 2023:
$0.3 million)
10 Intangible Assets
Computer Software Exploration and evaluation assets Research and Development Total
$'000 $'000 $'000 $'000
Opening net book amount at 1 January 2024 664 30,239 496 31,399
Additions -- 450 45 495
Impairment charge -- (72) -- (72)
Amortisation charge for the year (137) -- -- (137)
At 30 June 2024 527 30,617 541 31,685
Opening net book amount at 1 January 2023 405 32,903 229 33,537
Additions 204 5,084 80 5,368
Amortisation charge for the year (106) -- -- (106)
At 30 June 2023 503 37,987 309 38,799
Opening net book amount at 1 January 2023 405 32,903 229 33,537
Additions 492 9,421 267 10,180
Transfers -- (319) -- (319)
Impairment charge -- (11,766) -- (11,766)
Amortisation charge for the year (233) -- -- (233)
Closing net book amount at 31 December 2023 664 30,239 496 31,399
· Computer Software: Costs incurred in connection with software.
· Exploration and Evaluation asset: Mainly represents the cost for
the TGAL 1 exploration well and E&E costs related to Buenos Ayres block.
· Research and Development: In 2024, costs incurred in connection
with various renewable energy initiatives.
11 Trade and Other Receivables
30 June 2024 30 June 2023 31 December 2023
Due within one year $'000 $'000 $'000
Trade receivables 3,930 4,067 4,393
Less: provision for impairment of trade receivables (1) (1) (26)
Trade receivables: net 3,929 4,066 4,367
Prepayments 891 866 1,005
VAT recoverable 7,557 4,182 6,015
Other receivables 396 693 420
Less: Provision for Impairment of other receivables (71) (34) (98)
12,702 9,773 11,709
The fair value of trade and other receivables approximate their carrying
amounts.
The Group applies the IFRS 9 simplified model for measuring ECL which uses a
lifetime expected loss allowance and are measured on the days past due
criterion.
Trade receivables - Heritage net sales receipts have been collected on a
timely basis. Since the Joint Interest Billing balances are outstanding, an
ECL was calculated at 30 June 2024 of USD 0.07 million (31 December 2023: USD
0.09 million) against Other receivables.
VAT recoverable - As at 30 June 2024 the VAT recoverable was USD 7.6 million.
During the period, the Group generated refunds of USD 2.6 million and refunds
received amounted to USD 1.1 million.
12 Share Capital
Number of shares Share capital Share premium Total
$'000 $'000 $'000
As at 1 January 2024 and 30 June 2024 39,899,813 399 -- 399
The Company does not have a limited amount of authorised share capital.
13 Treasury Shares
Treasury shares are shares in the Company that are held by the Company. In
September 2022 to June 2023, three share buyback programmes were executed.
Number of shares repurchased Cost Total
$'000 $'000
As at 1 January 2024 1,171,687 1,553 1,553
Shares issued out of Treasury (46,068) (72) (72)
As at 30 June 2024 1,125,619 1,481 1,481
14 Share Based Payment Reserve
The share-based payments reserve is used to recognise:
- The grant date fair value of options issued to employees but not
exercised.
- The grant date fair value of share awards issued to employees.
- The grant date fair value of deferred share awards granted to employees
but not yet vested; and
- The issue of shares held by the Employee Share Trust to employees.
During 2024 the Group had in place share-based payment arrangements for its
employees and Executive Directors, the LTIP. The Share Option Plan is fully
vested and expensed. The current year charge through share-based payments are
in relation to the LTIP arrangements shown below:
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
At 1 January 2,812 2,990 2,990
Share based payment expense 208 254 520
Exercised/lapsed options released to retained earnings (555) -- (698)
LTIPs exercised and released to retained earnings -- (20) --
At 30 June/31 December 2,465 3,224 2,812
There were no issues of LTIPs in H1 2024.
15 Deferred Income Taxation
The analysis of deferred income taxes is as follows:
30 June 2024 30 June 2023 31 December 2023
Deferred tax assets: $'000 $'000 $'000
-Deferred tax assets to be recovered in more than 12 months (16,367) (12,465) (15,703)
Deferred tax liabilities:
-Deferred tax liabilities to be settled in more than 12 months 2,525 1,898 1,862
The deferred tax balances are analysed below:
1 January 30 June 31 Dec 30 June
2023 Movement 2023 Movement 2023 Movement 2024
$'000 $'000 $'000 $'000 $'000 $'000 $'000
Deferred tax assets - Tax losses recognised (12,465) -- (12,465) (15,703) (664) (16,367)
(3,238)
Deferred tax liabilities 1,939 (43) 1,897 1,861 664 2,525
(36)
As at 30 June 2024, the DTA increased to USD 16.4 million. A further
assessment will be performed at year-end to determine any revision of deferred
tax assets.
Deferred income tax assets are recognised for tax loss carry-forwards to the
extent that the realisation of the related tax benefit through future taxable
profits are probable. The Group recognises deferred tax assets over a
three-year outlook which is conservative and consistent with prior periods.
The Group has unrecognised tax losses amounting to USD 191.0 million with no
expiry date (2023: USD 199.3 million).
Deferred tax assets and liabilities are not shown offset in this condensed
consolidated statement of financial position. Deferred tax assets and
liabilities can only be offset if an entity has a legal right to settle
current tax amounts on a net basis and Deferred Tax amounts are levied by the
same tax authority (as per IAS 12).
16 Provisions and Other Liabilities
Non-Current: Decommissioning cost Closure of pits Total
$'000 $'000 $'000
6 months ended 30 June 2024
Opening amount as at 1 January 2024 44,433 643 45,076
Unwinding of discount 909 -- 909
Revision to estimates (3,505) -- (3,505)
Translation differences (5) -- (5)
Closing balance as at 30 June 2024 41,832 643 42,475
6 months ended 30 June 2023
Opening amount as at 1 January 2023 51,857 603 52,460
Unwinding of discount 1,053 -- 1,053
Revision to estimates -- -- --
Translation differences (45) 1 (44)
Closing balance as at 30 June 2023 52,865 604 53,469
Year ended 31 December 2023
Opening amount as at 1 January 2023 51,857 603 52,460
Unwinding of discount 2,077 -- 2,077
Revision to estimates (9,638) -- (9,638)
Additions -- 40 40
Translation differences 137 -- 137
Closing balance at 31 December 2023 44,433 643 45,076
Current: Other provisions Litigation claims Total
$'000 $'000 $'000
6 months ended 30 June 2024
Opening amount as at 1 January 2024 500 122 622
Additions 100 -- 100
Settlements -- -- --
Closing balance as at 30 June 2024 600 122 722
6 months ended 30 June 2023
Opening amount as at 1 January 2023 112 136 248
Settlements (103) -- (103)
Closing balance as at 30 June 2023 9 136 145
Year ended 31 December 2023
Opening amount as at 1 January 2023 112 137 249
Payments (112) (15) (127)
Additions 500 -- 500
Closing balance at 31 December 2023 500 122 622
17 Trade and Other Payables
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Trade payables 3,473 3,688 3,154
Accruals 3,993 7,079 5,747
VAT payable 416 -- 245
Other payables 862 580 2,560
SPT -- 1,486 1,388
8,744 12,833 13,094
18 Bank Overdraft
30 June 2024 30 June 2023 31 December 2023
$'000 $'000 $'000
Bank Overdraft 3,000 2,000 4,000
3,000 2,000 4,000
An on-demand operating (overdraft) line of USD 8.0 million exists with
FirstCaribbean International Bank (Trinidad & Tobago) Limited ("CIBC").
Details of the overdraft facility:
Details of the overdraft facility:
- Description: Demand revolving credit facility
- Interest Rate: United States Prime rate minus 6.50 % per annum, effective
rate 7.75%. Interest is payable monthly.
- Repayment: Upon demand at CIBC's discretion
- Debenture: Floating charge debenture giving the lender a first ranking
floating charge over inventory and trade receivables only
- Covenant: Current Ratio not less than 1.25:1
The credit limit on the facility is $8.0 million of which $3.0 million was
drawn as at 30 June 2024.
19 Adjusted EBITDA
Adjusted EBITDA is a non-IFRS measure, an alternative performance measure,
used by the Group to measure business performance. It is calculated as
Operating Profit before SPT for the period, adjusted for non-cash items being
DD&A, ILFA, SOE, Fair value gain/loss on Derivatives and Foreign exchange
(gain)/loss.
The Group presents Adjusted EBITDA as it is used in assessing the Group's
operating performance as management believes it better illustrates the
underlying performance of the Group's business by excluding non-cash items not
considered by management to reflect the underlying operations of the Group.
Adjusted EBITDA is calculated as follows:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended December 2023
$'000 $'000 $'000
Operating Profit Before SPT 6,062 5,828 9,593
Depreciation, depletion and amortisation 2,984 4,472 8,935
Share option expense 222 254 528
Impairment/(reversal of impairment) of financial assets 24 (25) 64
Foreign exchange (gain)/loss (35) (142) 65
Loss on disposal -- -- 15
Adjusted EBITDA 9,257 10,387 19,200
$'000 $'000 $'000
Weighted average ordinary shares outstanding - basic 38,664 38,336 38,867
Weighted average ordinary shares outstanding - diluted 39,714 39,751 39,987
$ $ $
Adjusted EBITDA per share - basic 0.24 0.27 0.50
Adjusted EBITDA per share - diluted 0.23 0.26 0.48
Adjusted EBITDA after the impact of Current Taxes (SPT, PPT and UL) is
calculated as follows:
6 months to 30 June 2024 6 months to 30 June 2023 Year ended December 2023
$'000 $'000 $'000
Adjusted EBITDA 9,257 10,387 19,200
SPT -- (3,247) (5,697)
PPT/UL (662) (470) (591)
Adjusted EBITDA after Current Taxes 8,595 6,670 12,912
'000 '000 '000
Weighted average ordinary shares outstanding - basic 38,664 38,336 38,687
Weighted average ordinary shares outstanding - diluted 39,714 39,751 39,987
$ $ $
Adjusted EBITDA after Current Taxes per share - basic 0.22 0.17 0.33
Adjusted EBITDA after Current Taxes per share - diluted 0.22 0.17 0.32
20 Earnings per Share
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the period. Diluted earnings per share is calculated using
the weighted average number of ordinary shares adjusted to assume the
conversion of all dilutive potential ordinary shares.
Profit/(Loss) $'000 Weighted Average Number of Shares Earnings Per Share $
'000
Period ended 30 June 2024
Basic 3,126 38,664 0.08
Diluted 3,126 39,714 0.08
Period ended 30 June 2023
Basic 683 38,336 0.02
Diluted 683 39,751 0.02
Year ended 31 December 2023
Basic (6,804) 39,094 0.00
Diluted (6,804) 40,524 0.00
Impact of dilutive ordinary shares:
Diluted earnings per share is calculated by adjusting the weighted average
number of ordinary shares outstanding to assume conversion of all dilutive
potential ordinary shares. The awards issued under the Company's LTIP are
considered potential ordinary shares.
The basic shares balance was amended through the net effect of the issuance of
new shares (following exercise of Options) and the repurchase of shares
through the share buyback to 30 June 2024.
21 Commitments and Contingencies
a) Commitments
There are commitments for decommissioning costs of the wells and facilities
under the Group's agreements with Heritage, which have been provided for as
described in Note 16: Provisions and other liabilities.
b) Contingent Liabilities
i) Parent Company Guarantee:
a) PGB - A Letter of Guarantee has been established in substance over
the PGB Block where a subsidiary of Trinity is obliged to carry out a Minimum
Work Programme to the value of USD 8.4 million. A clause within the Letter
of Guarantee implies that the Guarantor may reduce the Guarantee Sum available
for payment to the MEEI under the Letter of Guarantee on an
obligation-by-obligation basis provided PGB delivers to the Guarantor a
certificate duly issued and signed by the MEEI.
b) Galeota - A Letter of Guarantee has been established in substance
over the Galeota Block where a subsidiary of Trinity is obliged to carry out a
Minimum Work Programme to the value of USD 0.9 million. A clause within the
Letter of Guarantee implies that the Guarantor may reduce the Guarantee Sum
available for payment to the MEEI under the Letter of Guarantee on an
obligation-by-obligation basis provided the subsidiary of Trinity delivers to
the Guarantor a certificate duly issued and signed by the Minister of the
MEEI. The Letter of Guarantee was effective from 14 July 2021 until the
earlier of performance of Minimum Work Programme or the Guarantor has paid the
Guaranteed amount.
ii) The Jacobin drilling disputed cost: There is a
disputed drilling cost of $2.4 million with a supplier in relation to the
Jacobin well, where Management has included a provision for $0.6 million which
it believes is appropriate based on external advice obtained. $1.8 million is
disclosed as a contingent liability.
iii) The Group is party to various claims and actions.
Management has considered the matters and where appropriate has obtained
external legal advice. No material additional liabilities are expected to
arise in connection with these matters, other than those already provided for
in these condensed consolidated financial statements.
22 Events after the Reporting Period
i) Subsequent to 30 June 2024, the Group received
VAT refunds of $1.1 million.
ii) On 13 June 2023, Trinity announced its successful
bid for the onshore Buenos Ayres block. On 1 July 2024, both the Exploration
and Production licence with the MEEI and a Joint Operating Agreement with
Heritage was finalised.
A Letter of Guarantee was also established over the Buenos Ayres block on the
28 August 2024 where a subsidiary of Trinity is obliged to carry out a Minimum
Work Programme to the value of $7.9 million. A clause within the Letter of
Guarantee implies that at the end of each twelve-month period, the Guarantor
may reduce the Guarantee Sum available for payment to the MEEI under the
Letter of Guarantee provided the subsidiary of Trinity delivers to the
Guarantor a certificate duly issued and signed by the MEEI.
iii) On 1 May 2024, Trinity and Touchstone Exploration
Inc (TSX, LSE: TXP) ("Touchstone") announced that they had reached agreement
on the terms of a recommended all share offer pursuant to which Touchstone
would acquire each Trinity share for 1.5 new Touchstone Share, to be effected
by means of a Court sanctioned scheme of arrangement under Part 26 of the
Companies Act 2006 ("scheme of arrangement") (the "Touchstone Offer").
On 2 August 2024, Trinity and Lease Operators Limited ("Lease Operators")
announced that they had reached agreement on the terms of a recommended all
cash acquisition, pursuant to which Lease Operators would acquire each Trinity
share for 68.05 pence in cash (the "Acquisition"), also to be effected by
means of a scheme of arrangement. At the same time, the Trinity board of
directors withdrew its recommendation of the Touchstone Offer as it considered
the Acquisition to be superior and in the best interests of Trinity
Shareholders.
On 25 September 2024 the Court granted permission to formally withdraw the
scheme of arrangement relating to the Touchstone Offer and, as a result, the
Touchstone Offer lapsed with immediate effect.
The Trinity Directors will now seek the permission of the Court to convene the
Court Meeting and the General Meeting in connection with the Acquisition and
to proceed with the publication of the shareholder circular containing full
details of the Acquisition and the Scheme (the "Scheme Document").
An expected timeline of principal events leading up to the Scheme becoming
Effective will be set out in the Scheme Document when published.
The Acquisition remains subject to certain other conditions, including the
approval of Trinity Shareholders at a Court Meeting and a General Meeting and
the Court's sanction of the Scheme at a Court Hearing.
A further update, including the timetable for the Acquisition will be made in
due course.
Further information on the transaction can be found on our website at
https://trinityexploration.com/ (https://trinityexploration.com/) .
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