TIDMTRIN
RNS Number : 8840Q
Trinity Exploration & Production
23 October 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 Law by virtue of the European (Withdrawal)
Act 2018, as amended. On publication of this announcement via a
Regulatory Information Service, this information is considered to
be in the public domain.
23 October 2023
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Q3 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 September 2023 ("Q3 2023" or "the Period"). The information
contained herein has not been audited and may be subject to further
review and amendment.
Jacobin-1 Discovery
Following the Jacobin oil discovery in the Palo Seco area
onshore Trinidad, announced on 7 August 2023, the well was cased to
10,021 feet in preparation for production testing.
A heavy-duty workover rig, Rigtech Rig # 9, mobilised to the
wellsite and perforated the lower-most of three oil-bearing zones
on 30 September 2023. The well came on at an encouraging rate
during the initial clean-up phase but in doing so produced sand
which has temporarily plugged the well. We recovered a high
quality, light oil (35(o) API) from this lower reservoir. The
reservoir and wellhead pressures, in addition to the rate achieved,
are highly encouraging and we continue with operations to bring on
production from this deep and highly pressurised reservoir.
The well flowed a total of 113 barrels (34 bbls oil and 79 bbls
completion fluid) over a seven-hour period prior to a sand plug
forming in the well. If sustained, this would be a highly
encouraging result however the period is too limited to provide a
reliable indication of the potential production flow rates from
this zone.
The post-perforation closed-in wellhead pressure was 2250psi,
which matches our pre-perforation expected pressures based on a
reservoir pressure of 7500psi. Flowing pressure on 4/32" choke was
1800psi.
Trinity is deploying a coiled-tubing unit to clean-out the well
and bring it back into production. We expect work to unplug the
well to be followed by a period of production optimisation as we
adjust the choke to achieve sustained flow.
Trinity plans to carry out extensive testing of all three
discovered oil-bearing horizons in the deeper exploration section
of Jacobin to establish reliable and meaningful data over an
extended period. The Company will provide details of the flow test
data when this information is available.
The oil produced was sold to Heritage Petroleum Company Limited
under the current sales arrangement within the PS4 Lease Operating
Agreement.
Given that the well has taken longer to drill and the well
testing programme now contemplates three zones, we expect that the
total cost for drilling, completion and testing will exceed the
previously guided capital expenditure ranges for Jacobin. A final
update on the costs associated with Jacobin, will be provided once
finalised.
Q3 2023 Operational Highlights
-- Q3 2023 sales volumes averaged 2,705 bopd (Q2 2023: 2,824
bopd). Production was lower than planned over the quarter due to
extended downtime on a key well in the Trintes field which is now
back online.
-- Production Sales Guidance for the full year 2023 is updated
to 2,800 bopd - 2,900 bopd (previously 2,800 - 3,100 bopd).
Annual and Quarterly Sales by Region
12m 2022 Q1 2023 Q2 2023 Q3 2023
Onshore 1,655 1,548 1,477 1,493
East Coast 1,051 1,038 985 843
West Coast 269 314 362 370
Total 2,975 2,899 2,824 2,705
-- During Q3 2023:
- 37 workovers (Q2 2023: 16; Q3 2022: 32) were completed.
- there were no recompletions ("RCPs") in the Period (Q2 2023: 1; Q3 202 2: 5).
- swabbing operations continued across onshore and West Coast assets.
Q3 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 72.5/bbl for Q3 2023 (Q2 2023: USD
63.7/bbl, Q3 2022: USD 84.3/bbl).
-- EBITDA, pre-hedging(1) , in Q3 2023 of USD 4.6 million
(unaudited) (Q2 2023: USD 4.5 million (unaudited); Q3 2022 USD 8.7
million).
-- Operating break-even(2) , pre-hedging(1) , Q3 2023 of USD
42.27/bbl (Q2 2023 of USD 34.8 /bbl; Q3 2022 USD 32.2/ bbl). This
increased Q3 operating break-even is due mainly to lower Q3 sales
volumes and this is expected to be temporary.
(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 USD 8.4 million (unaudited) at 30 September
2023 versus USD 11.3 million (unaudited) at 30 June 2023 and USD
16.5 million (unaudited) at 30 September 2022.
-- The Group had drawn borrowings (overdraft) of USD 2.0 million
at 30 September 2023 (USD 2.0 million at 30 June 2023 and USD 2.7
million at 30 September 2022).
Outlook
Galeota Concept Screening Study
Trinity commissioned Petrofac to undertake a study to 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.
The study has been completed and has helped to confirm that
lower capital intensity projects, when compared to the previous
'Echo' Field Development Plan, are feasible and should result in
lowering both the risk and quantum of up-front capital required to
exploit the significant reserves and resources in Galeota. The
Company is conducting scoping economic analyses of the key
recommended options. An update will be provided in due course
within the Company's next Corporate Presentation.
Fiscal Changes
On 2 October 2023, the Government of Trinidad and Tobago's 2023
Budget Statement announced proposed reforms to the Supplemental
Petroleum Tax ("SPT") regime for shallow marine areas similar to
reforms that have been made previously to onshore activities. In
addition, the proposed review of the capital expenditure write-off
regime, seems intended to be in favour of operators such as
Trinity. The Statement also included a proposal to increase the
Sustainability Allowance from 20% to 25%.
The proposed SPT changes, which are subject to further
definition through the legislative process and Parliamentary
ratification, will meaningfully improve the economics and value of
the Company's East Coast and West Coast shallow marine
licences.
Jeremy Bridglalsingh, Chief Executive Officer of Trinity,
commented:
"During the period, we made significant progress at our
important Jacobin well, perforating the lower-most of three
oil-bearing zones on 30 September. We had encouraging flow during
the initial clean-up phase but, in doing so, produced sand which
has temporarily plugged the well. Work to resolve that issue is in
train. The oil quality and pressure in the well are very
positive.
The results of the Galeota concept screening study have served
to help validate our approach to reducing the capital intensity of
projects that will help to improve economics, which will be further
improved by the recently proposed changes to SPT.
I look forward to providing a further update on our progress on
Jacobin, which is of paramount importance to our shareholders, as
we progress our well testing programme."
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
(Nominated Adviser and Financial Adviser)
Mark Brady
James Keeshan +44 (0)20 3368 3550
Cavendish Securities plc (Broker)
Leif Powis
Derrick Lee +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Vigo Consulting Limited trinity@vigoconsulting.com
Finlay Thomson +44 (0)20 739 0
Patrick d'Ancona 0230
About Trinity ( 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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