TIDMTRIN
RNS Number : 1882D
Trinity Exploration & Production
25 April 2017
25 April 2017
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Operational, Corporate, Financial & Strategic Update
Trinity, the independent E&P company focused on Trinidad and
Tobago, today provides an update on its operations and financials
for the year to 31 December 2016 and the first quarter ("Q1") 2017
as well as details on its future strategy for developing its
attractive asset portfolio.
Operating Update
-- Group average net production volumes of 2,542 bopd for the
year to 31 December 2016 (2015: 2,896 bopd)
-- Average realised price of US$39.4/bbl (2015: US$45.4/bbl)
-- High quality reservoirs, low natural decline rates and
successful low-cost workovers continue to assist in maintaining
production levels, despite the backdrop of reduced investment in
2016
-- Improved operating metrics (higher oil price and reduced
operating costs) supported an increase in management estimated 2P
reserves to 21.3 mmbbls as at 31 December 2016 (2015: 21.0 mmbbls)
despite producing 0.9 mmbbls during the year and the Guapo field
divestment (2P: 0.8 mmbbls)
-- For Q1 2017 daily production averaged c.2,500 bopd, a
satisfactory performance given the reduced levels of investment in
2016
-- Contingent upon the prevailing oil price environment, and
subsequent investment, net average production for 2017 is expected
to be in the range of 2,600 - 2,800 bopd
-- Trinity is continuing to target an eventual run-rate closer
to 3,000 bopd over the next 12 months (predominantly contingent
upon the results of the pending onshore infill drilling
programme)
Corporate Update
-- Completion of successful fundraising in January 2017 of
approximately US$15.0 million through an issue of shares (US$11.7
million) and convertible loan notes (US$3.3 million)
-- Successful execution of agreements with creditors to settle outstanding debts
-- All trade, senior debt and initial state creditor settlements
have been made to the Trustee in accordance with the Proposal
-- Board significantly strengthened by the appointments of three
new directors on completion of the fundraising: Jeremy N.
Bridglalsingh (Executive) our current Chief Financial Officer,
David A. Segel (Non-Executive) and Angus C. Winther
(Non-Executive)
Financial Update*
-- As a direct result of lower oil prices, reduced operating and
G&A costs and minimal capital expenditure, for the 12 months
ending 31 December 2016:
o Revenues of US$35.3 million (2015: US$48.2 million)
o EBITDA of US$6.3 million (2015: US$1.2 million)
o Loss after tax of US$7.0 million (2015: US$58.5 million
loss)
o Positive operating cash flow of US$9.0 million (2015: US$2.5
million)
-- Cash balance at end of December 2016 of US$7.6 million (2015: US$8.2 million)
-- Following the successful fundraising completed in January
2017, and payments of creditor settlements, cash balances at the
end of February 2017 had increased to US$13.0 million
-- Creditor settlements have resulted in a reduction in
like-for-like total pre-restructuring liabilities (outstanding debt
plus current and non-current liabilities) from US$50.7m (as at 31
December 2016) to US$14.2m at the end of February 2017. This
includes amounts due to State Creditors (US$13.5m), which are due
to be repaid in 10 quarterly instalments commencing in June
2017
-- To date, the Group has put hedging in place (through
purchasing put options) which covers over 35% of the Group's
production should the WTI oil price fall below US$40.0/bbl over the
next 12 months
-- The Board will continue to review the options available to
further hedge its oil price exposure, as market conditions
permit
*All figures for the financial year 2016 and Q1 2017 are
unaudited
The Board currently expects to issue its preliminary results
announcement on 2 May 2017, and to publish its annual report and
accounts for the year to 31 December 2016 during May 2017, with the
annual general meeting expected to take place in Edinburgh on 23
June 2017.
Strategic & Portfolio Update
As a result of the significant reduction in operating and
G&A costs, and the resultant increased margins, the Company's
plan to develop its asset base is attractive, even at relatively
low oil prices.
Across Trinity's asset base the Company has identified clear
pathways for value-creating production growth. Whilst the
restructuring and re-alignment of the Company's cost base has
created a much stronger platform for growth, the Board is mindful
that it must continue to adhere to the disciplined approach to
costs through the implementation of staged, risk-mitigated
development activities. In the short-term, the Company has embarked
upon a work programme to sustain the current production base via
routine workovers, whilst growing current production levels from an
existing wide inventory of opportunities from recompletions
("RCP"s) and reactivations on its current well stock.
A programme of 12 RCP's is planned for 2017 with 2 having
already been undertaken and a further 4 expected to be completed
before the end of June. As the year progresses, the re-initiation
of swabbing activities will take place alongside the drilling of
new onshore wells from previously identified locations. This
initial onshore drilling programme is expected to comprise of four
new wells in each of the next two years, again subject to market
conditions. Additionally, the Company anticipates capital
expenditure works for planned repairs and maintenance to its
equipment and infrastructure.
These combined activities have the potential to increase
production from current levels of c. 2,500 bopd to an eventual
target-rate of approximately 3,000 bopd within 12 months of
completing the initial onshore infill well drilling programme.
In addition the Company has initiated an internal review of the
Trintes infill drilling programme and the Trintes-TGAL and Galeota
Ridge development plan.
Bruce A. I. Dingwall CBE, Executive Chairman of Trinity,
commented:
"Following the successful completion of the restructuring, the
Company is now focusing on curtailing natural decline of existing
production and adding new production through increased well work
via recompletions and the drilling of new onshore development
wells. We are also re-focusing effort on our offshore East Coast
asset at Galeota where attractive in field opportunities exist and
where large upside can be realised through the Trintes-TGAL and
wider Galeota Ridge development."
Competent Person's Statement
The information contained in this announcement has been reviewed
and approved by Graham Stuart, the Company's Technical Advisor who
has 34 years of relevant global experience in the oil industry. Mr
Stuart holds a BSC (Hons) in Geology. Reserve are based on internal
management estimates in accordance with SPE PRMS guidelines
(Petroleum Resources Management System 2007 & Revisions).
This announcement contains inside information for the purposes
of Article 7 of EU Regulation 596/2014.
Enquiries:
Trinity Exploration & Production Tel: +44 (0) 131 240
Bruce Dingwall, Executive Chairman 3860
Tracy Mackenzie, Head of Corporate Development
SPARK Advisory Partners Limited (Nominated Tel: +44 (0) 203 368
& Financial Adviser) 3550
Mark Brady
Miriam Greenwood
Sean Wyndham-Quin
Cantor Fitzgerald Europe (Broker) Tel: +44 (0) 207 894
David Porter 7000
Sebastien Maurin
Craig Francis
About Trinity
Trinity is an independent oil and gas exploration and 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 nine
licences and, across all of the Group's assets, management's
estimate of 2P reserves as at the end of 2016 was 21.3 MMbbls
(excluding the Guapo-1 license which was disposed of in April
2016). Group 2C contingent resources are estimated to be 21.1
MMbbls. The Group's overall 2P plus 2C volumes are therefore 42.3
MMbbls.
Trinity is listed on the AIM market of the London Stock Exchange
under the ticker TRIN.
END
This information is provided by RNS
The company news service from the London Stock Exchange
END
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