REG - Trinity Exploration - Q4 2023 Operational Update

Trinity Exploration & ProductionAnnouncement

11/01/2024 07:00

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RNS Number : 3220Z  Trinity Exploration & Production  11 January 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
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information is considered to be in the public domain.

11 January 2024

Trinity Exploration & Production plc

("Trinity" or "the Group" or "the Company")

Q4 2023 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 2023 ("Q4 2023" or "the Period").
The information contained herein has not been audited and may be subject to
further review and amendment.

 

Jacobin-1 Operations

Trinity safely perforated two Lower Cruse 1 (LC-1) zones on 28 November 2023.
As previously announced on 18 December 2023, initial flowrates were
encouraging given the very small choke size, however the flowrates and
Wellhead Flowing Pressures have progressively declined over the intervening
period whereby in early January the rates were materially below expectations
at approximately 20bfpd split 50/50 oil and water. There continues to be a
high volume of gas produced from the well and some traces of sand. A pressure
survey has been conducted to assess, inter alia, the reservoir pressures and
this data showed that a significant reduction in reservoir pressure had
occurred over the period. The inference from this is that the volumes of
hydrocarbons connected to the wellbore are lower than originally anticipated.

The forward plan is to convert the well to pumped production and monitor the
performance of the LC-1 zones. We will assess the potential in the uphole
zones and see if a recompletion of either the Upper Cruse, Lower Forest or
Upper Forest zones is justified. Daily production is being collected and sold
to Heritage. The data gathered to date on Jacobin will also be of immense
value in finessing Trinity's subsurface models for the other Palo Seco
"Hummingbird" prospects and elsewhere in the basin, including Buenos Ayres.

As announced on 18 December 2023, Trinity estimates that the undisputed costs
incurred to date thus far to be USD 8.3 million, of which USD 6.2 million
(unaudited) has already been paid up to the end of the period. As previously
reported, Trinity expects to settle the total cost of this well without
recourse to any external finance.

 

Fiscal Reforms

As announced on 4 January 2024, the Trinidad and Tobago Finance Act 2023 ("The
Act") was assented to on 20 December 2023. The Act includes reforms to the to
the Supplemental Petroleum Tax ("SPT") regime which are of material benefit to
Trinity's ongoing and prospective growth opportunities. The reforms will
positively affect the Company's cashflow throughout 2024 and be beneficial to
Trinity's ongoing projects, in particular the Trintes and wider Galeota
developments.

SPT liability for Trinity's offshore production is estimated at USD 4-5m for
2023 and we expect a similar amount, adjusted for production, to be additional
operating cash flow in 2024 and the future, at current long term oil price
forecasts, which suggest that the realised price will be below USD 75/bbl.

 

Q4 2023 Operational Highlights

·    Q4 2023 sales volumes averaged 2,736 bopd (Q3 2023: 2,705 bopd).

·    Full year 2023 sales volumes averaged 2,790 bopd (2022: 2,975 bopd),
marginally below the lower end of previous guidance.

Averaged Annual and Quarterly Sales by Region

             12m 2023  Q1 2023  Q2 2023  Q3 2023  Q4 2023
 Onshore     1,495     1,548    1,477    1,493    1,462
 East Coast  943       1,038    985      843      908
 West Coast  353       314      362      370      365
 Total       2,790     2,899    2,824    2,705    2,736

 

·    During Q4 2023:

-      33 workovers (Q3 2023: 37; Q4 2022: 27) were completed.

-      There were 3 recompletions ("RCPs") in the Period (Q3 2023: 0;
Q4 2022: 1).

-      A total of 6 RCPs and 117 workovers were completed during 2023
(2022: 17 RCPs and 120 workovers).

-      Swabbing operations continued across onshore and West Coast
assets.

 

Q4 2023 Financial Highlights

The Group reports its consolidated financial information half yearly, in its
Annual Report & Accounts and Interim Results, in accordance with UK
adopted International Accounting Standards and the London Stock Exchange's AIM
Rules for Companies.  Quarterly, the Company provides unaudited information
for guidance.

·    Average realisation of USD 71.6/bbl for Q4 2023
(Q3 2023: USD 72.5/bbl, Q4 2022: USD 75.4/bbl).

·    EBITDA, pre-hedging(1), in Q4 2023 of USD 4.1 million (unaudited)
(Q3 2023: USD 4.6 million (unaudited); Q4 2022 USD 7.0 million).

·    Operating break-even(2), pre-hedging(1), Q4 2023 of USD 39.79/bbl (Q3
2023: 42.27bbl and USD 38.61 /bbl (unaudited) for the full year 2023 (2022:
USD 32.1/bbl).

(1         ) The Company had no hedging in place in 2023.

(2)       Operating break-even is the realised price/bbl where the
adjusted EBITDA/bbl for the Group is equal to zero.

·    Cash balance of USD 9.8 million (unaudited) at 31 December 2023
versus USD 11.3 million (unaudited) at 30 June 2023 and USD 8.4 million
(unaudited) at 30 September 2023.

·    The Group had drawn borrowings (overdraft) of USD 4.0 million at 31
December 2023 (USD 2.0 million at 30 September 2023), which reflect the
value of outstanding VAT refunds due.

·    Completion of first dividend payment on 26 October 2023, consistent
with our Capital Allocation Policy.

 

Jeremy Bridglalsingh, Chief Executive Officer of Trinity, commented:

"During the period, we continued to progress our work at the Jacobin well. Our
ongoing data collection work is important for us to develop our understanding
of the area and its potential for the Buenos Ayres licence. We also continue
to invest in our wider asset base to offset natural decline and underpin its
strong cash generation potential.

"We welcomed the Government's fiscal reforms to the SPT regime in Trinidad and
Tobago which should have a significant impact on our 2024 cashflow and
facilitate strengthening of the balance sheet.

"I look forward to updating shareholders on our progress throughout the
upcoming quarter."

 

 Enquiries:

 Trinity Exploration & Production plc            Via Vigo Consulting

 Jeremy Bridglalsingh, Chief Executive Officer

 Julian Kennedy, Chief Financial Officer

 Nick Clayton, Non- Executive Chairman

 SPARK Advisory Partners Limited                 +44 (0)20 3368 3550

 (Nominated Adviser and Financial Adviser)

 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                         trinity@vigoconsulting.com

 Finlay Thomson                                  +44 (0)20 7390 0230

 Patrick d'Ancona

 

 

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 ten licences and,
across all of the Group's assets, management's estimate of the Group's 2P
reserves as at the end of 2022 was 17.96 mmbbls.  Group 2C contingent
resources are estimated to be 48.88 mmbbls.  The Group's overall 2P plus 2C
volumes are therefore 66.84 mmbbls.

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.

 

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