Trinity Exploration - Q2 2023 Operational Update
20/07/2023 07:00
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RNS Number : 5660G Trinity Exploration & Production 20 July 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
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20 July 2023
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Q2 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 30 June 2023 ("Q2 2023" 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 is delivering on important catalysts within our refreshed strategy.
We are greatly encouraged by progress at our Jacobin well, testing the first
of our nine deep Hummingbird prospects and where we reported multiple
oil-bearing reservoirs in the Lower Cruse interval; the well sidetrack is
drilling ahead and making good progress.
"In June, we announced that we had been successful in our bid for the Buenos
Ayres block where we intend to leverage our competitive advantage in the Palo
Seco area.
"On our Galeota East Coast asset, we appointed Petrofac to undertake a Concept
Screening study for the development of further reserves and resources using a
low cost, more flexible approach than originally envisaged.
"I look forward to continuing to update shareholders on our further progress
at a very busy and exciting time for Trinity."
Q2 2023 Operational Highlights
· The Company maintained solid production performance over the quarter
with Q2 2023 sales volumes averaging 2,824 bopd (Q1 2023: 2,899 bopd; Q2
2022: 3,019 bopd).
· Production sales guidance for the full year 2023 remains unchanged at
2,800 bopd - 3,100 bopd.
· During Q2 2023:
- 1 recompletion ("RCP") (Q1 2023: 2; Q2 2022: 9) was completed.
- 16 workovers (Q1 2023: 39; Q2 2022: 31) were completed.
- swabbing operations continued across onshore and West Coast
assets.
· The ABM-151 well in the Brighton Marine block, offshore the West
Coast of Trinidad, was returned to production on 21 March 2023. During Q2
2023, the well flowed at an average rate of 125 bopd, above the target
range.
Q2 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 US$ 63.7/bbl for Q2 2023 (Q1
2023: US$ 67.9/bbl, Q2 2022: US$ 96.8/bbl).
· EBITDA, pre-hedging(1), in Q2 2023 of US$ 4.5 million (unaudited) (Q1
2023: US$ 5.3 million (unaudited); Q2 2022 US$ 11.2 million).
· Operating break-even(2), pre-hedging(1), Q2 2023 of US$ 34.8/bbl (Q1
2023 of US$ 35.4/bbl; Q2 2022 US$ 31.3/bbl).
(1) The Company has 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 US$ 11.3 million (unaudited) at 30 June 2023 versus
US$ 11.4 million (unaudited) at 31 March 2023 and US$ 15.0 million at 30
June 2022.
· The Group had drawn borrowings (overdraft) of US$ 2.0 million at 30
June 2023 (US$ 2.3 million at 31 March 2023 and US$ 2.7 million at 30 June
2022). These borrowings match the Company's outstanding VAT receivable
balance.
· The Company's second buyback programme, announced on 24 October 2022,
concluded on 26 April 2023 with 760,000 Ordinary Shares repurchased.
On 28 April 2023, the Company announced a further share buyback programme
which concluded on 27 June 2023, the date of the Annual General Meeting, and
repurchased a further 117,000 Ordinary Shares bringing the total number of
shares held in treasury to 1,549,000 (4.0 % of the Company's shares in
issue).
Outlook
Jacobin Update
As announced on 13 July 2023, the Jacobin sidetrack is currently drilling
ahead following unexpected well bore conditions in the original well.
The original wellbore penetrated over 2,000 ft of Lower Cruse section, with
preliminary evaluation using a combination of Measurement While Drilling
("MWD") data (inclusive of MWD gamma ray) and together with analysis of well
bore cuttings, pointing to at least three well developed, oil-bearing sand
intervals in the Lower Cruse.
The next update on Jacobin is expected to be announced once the sidetrack has
been completed and the full suite of data acquisition has been completed,
which will provide a definitive view on all sands encountered.
2022 Onshore and Nearshore Competitive Bid Round
On 13 June 2023, Trinity announced its successful bid for the onshore Buenos
Ayres block further leveraging our competitive advantage in the Palo Seco
area.
Our investment in purchasing the North West District 3D seismic dataset and
resultant exhaustive subsurface work has provided Trinity with an unparalleled
understanding of the trapping mechanisms in the Palo Seco area. Our review of
the 3D seismic over Buenos Ayres block, utilising our in-house knowledge, has
highlighted multiple prospects at a variety of levels in this virgin block.
Buenos Ayres contains multiple stacked target reservoirs of the Lower Forest,
Upper Cruse and Lower Cruse which are the most productive reservoirs in the
Southern Basin in Trinidad.
We are planning to fast track the first exploration well on Buenos Ayres in
2024, subject to acquiring environmental approvals.
Galeota Concept Screening Study
On 27 June 2023, Trinity announced it had appointed Petrofac to undertake a
Concept Screening study for the development of further reserves and resources
in its Galeota Block. The Galeota Block contains estimated 2P+2C reserves
and resources of 46.1 million barrels of oil equivalent and is the Company's
largest asset.
The study will take a fresh look at development concepts for the Galeota
Block, using the latest subsurface information and marrying that with
Petrofac's global low-cost marginal field track record to develop a concept
that can be taken forward into Conceptual Engineering, Front End Engineering
and Project Sanction. Key elements will comprise flexibility to deal with
reservoir uncertainty and using equipment that could be potentially relocated
around the large Galeota Block. Leased Mobile Offshore Production Units
("MOPU") concepts such as converted jack-ups or Floating Production, Storage
and Offloading ("FPSO") vessels will be considered as well as any other
suitable scheme. The cost of the study is included within this year's capex
guidance range.
The study has commenced and is expected to conclude in September, at which
point a further update will be provided.
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
Cenkos Securities PLC (Broker) +44 (0)20 7397 8900
Leif Powis +44 (0)131 220 6939
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.
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. Ryan Ramsook also lectures and is involved in
collaborative Geoscience research with the University of the West Indies and
is a Fellow of the Geological Society ("FGS") of London. He is a Geologist by
background with 19+ 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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