TIDMTRIN

RNS Number : 7283L

Trinity Exploration & Production

10 September 2019

Dissemination of a Regulatory Announcement that contains inside information according to

REGULATION (EU) No 596/2014 (MAR).

Trinity Exploration & Production plc

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

Interim Results

Strong Cash Flows and Operating Margins

Trinity, the independent E&P company focused on Trinidad & Tobago ("T&T"), announces its unaudited interim results for the six month period ended 30 June 2019 ("H1 2019" or "the period").

Trinity delivered another strong operational and financial performance during the period with production volumes successfully maintained and effective cost control and strong cash generation continuing. Production averaged 3,008 bopd, a like-for-like increase of 9% versus H1 2018 and is expected to rise in the second half of the year ("H2 2019") following the resumption of onshore drilling.

During the period, Trinity continued to manage its operating costs and capital expenditures carefully. As a consequence, unaudited H1 2019 Adjusted EBITDA increased by 20% to USD 11.2 million (H1 2018: USD 9.3 million) and the Adjusted EBITDA Margin increased to 34.8% (H1 2018: 30.9%) despite a modest decline in the realised oil price. Unaudited H1 2019 cash balances increased to USD 17.8 million as at 30 June 2019 - up from USD 10.2 million at the end of 2018 - and unaudited cash plus working capital surplus increased to USD 22.0 million as at 30 June 2019 - up from USD 18.1 million at the end of 2018.

Production has already commenced from the first new infill well of the H2 2019 drilling campaign with production from the second well expected imminently. This second well is Trinity's first High Angle Well ("HAW"), which has been successfully drilled and has intersected net oil reservoir sandstone one and a half times the thickness of those expected had it been drilled as a conventional well. In addition, the third well of the H2 2019 drilling campaign has spudded.

H1 2019 Highlights

 
                                                           H1 2019(1)          H1 2018   % Change 
 Average realised oil price(2)             USD/bbl               59.1             60.0        (2) 
 Average net production                      bopd               3,008            2,771          9 
 Revenues                                USD million             32.2             30.1          7 
 Adjusted EBITDA(3)                      USD million             11.2              9.3         20 
 Adjusted EBITDA(4)                        USD/bbl               20.6             18.6         11 
 Adjusted EBITDA margin(5)                    %                  34.8             30.9         13 
 Adjusted EBITDA after SPT & PT(6)       USD million              6.5              5.4         20 
 Group operating break-even(7)             USD/bbl               26.3             28.5        (8) 
 Cash balance                            USD million             17.8              9.1         96 
 Cash plus working capital surplus(8)    USD million             22.0             11.8         86 
 

Notes:

1. Excludes the impact of adopting IFRS 16 for H1 2019 to illustrate the like-for like, period-on-period comparative with H1 2018 using IAS 17. Refer to section on Adoption of IFRS 16 for comparative representations.

   2.        Realised price: Actual price received for crude oil sales per barrel ("bbl"). 

3. Adjusted EBITDA: Operating Profit before Taxes for the period, adjusted for Depreciation, Depletion & Amortisation ("DD&A"), non-cash share option expenses and Other Expenses (derivative hedge instruments).

   4.        Adjusted EBITDA (USD/bbl): Adjusted EBITDA/ production over the period. 
   5.        Adjusted EBITDA Margin (%): Adjusted EBITDA/Revenues. 

6. Adjusted EBITDA after SPT & PT: Adjusted EBITDA less Supplementary Petroleum Taxes and Property Taxes. H1 2018 included a write back of USD 1.1 million relating to 2016 and 2017 PT which has been excluded to aid period-on-period comparison.

7. Group operating break-even: The realised price/bbl where the adjusted EBITDA/bbl for the Group is equal to zero. See Appendix 1 - Trading Summary Table.

8. See section on Cash plus working capital surplus (formerly net cash position) for additional information.

H1 2019 Highlights

Operational

-- H1 2019 average production of 3,008 bopd (H1 2018: 2,771 bopd), representing a 9% increase over the corresponding period last year, underpinned by:

o 5 recompletions ("RCPs") (H1 2018: 7)

o Base production maintenance through a continuous campaign of 71 workovers ("WOs") and reactivations (H1 2018: 62)

Financial

   --     Opex reduced by 9% to USD 14.9/bbl (H1 2018: USD 16.5/bbl). 
   --     Group operating break-even decreased by 8% to USD 26.3 /bbl (H1 2018: USD 28.5/bbl) 
   --     Adjusted EBITDA increased 20% to USD 11.2 million (H1 2018: USD 9.3 million) 

-- Adjusted EBITDA/bbl improved by 11% to USD 20.6/bbl (H1 2018: USD 18.6/bbl) and Adjusted EBITDA Margin improved by 13% to 34.8% (H1 2018: 30.9%)

   --     Adjusted EBITDA after SPT and PT increased 20% to USD 6.5 million (H1 2018: USD 5.4 million) 
   --     Capital expenditure of USD 2.5 million (H1 2018: USD 4.4 million) 

-- Cash plus working capital surplus at USD 22.0 million on 30 June 2019 (H1 2018: USD 11.8 million)

-- The new Onshore wells drilled benefit from lower Overriding Royalties ("ORR") in Year 1 at 0% and Year 2 at 10%, compared with the base ORR rates applying under the Lease Operatorship Agreements.

Post Period End Highlights

Operational

o Onshore: First High Angle Well ("HAW") completed

   --     Two wells drilled and completed and third well spudded of the H2 2019 drilling programme 

o First well was spudded in July 2019 and put on production after 21 days

o The second well drilled, Trinity's first HAW, FR 1807, was successfully drilled to Total Depth at 3,038 ft within 14 well days and intersected net oil reservoir sandstone one and a half times the thickness expected had it been drilled as a conventional well on this target. Completion permissions have been granted and the well has been perforated with first production expected imminently

o The third well was spudded in late August with drilling operations expected to be completed by mid-September

o Onshore: Production Optimisation Programme

-- As part of an overall Supervisory Control and Data Acquisition ("SCADA") approach to production optimisation onshore and offshore Trinity and Weatherford International plc (WFTIQ) ("Weatherford") have entered a partnership onshore Trinidad:

o Piloting use of Weatherford's ForeSite(R) Production Optimisation Production 4.0 platform (Software and Automation) in order to maximise returns from the Company's onshore wells

o First instance where technology of this kind has been deployed in the onshore oil producing acreage of Trinidad

o Technology has been deployed on both Progressive Cavity and Sucker Rod Pumps

o By providing support for a broad array of production methods and the ability to optimise an asset from well to surface facility, it will enable Trinity to identify and prioritise production optimisation opportunities

o If deemed successful, Trinity aims to utilise continuous production optimisation on key wells in order to further reduce operating costs and increase reserves and production

o Offshore: East Coast Galeota Development progressing

-- Detailed technical and commercial discussions progressing with partner Heritage Petroleum Company Limited ("Heritage") and technical providers

o Review of commercial terms initiated with Heritage and the Ministry of Energy and Energy Industries ("MEEI")

o A pre-Front End Engineering Design ("pre-FEED") study was completed on the subsea power cable, initial stability analysis completed on a new pipeline, and initial design studies are progressing on the platform. A pre-FEED study on onshore fluids handling requirements to commence during September

o Environmental permit application for field development submitted; it is expected that the relevant environmental studies will be undertaken during H2 2019 and 2020 in order to secure the environmental permit

Corporate

o Hedging

-- Trinity has taken advantage of the oil price strength in July 2019 to put in place a layer of hedging which is designed to protect a portion of Group cash flows between USD 50.0 - USD 55.0/bbl thereby partially offsetting the impact of SPT whilst retaining upside exposure to rising oil prices over the majority of production

 
 Hedge            Floor      Cap     Strike Price     Production      Effective Date   Expiry Date 
                 USD/bbl   USD/bbl     USD/bbl      Barrels monthly 
 Put Spread       50.0      55.0         N/A            12,500          01-Jul-19       31-Dec-19 
 3-Way Option     50.0      55.0         64.4           12,500          01-Jul-19       30-Jun-20 
 

Operational Look Ahead

o Continued Drilling activity

-- The H2 2019 drilling campaign envisages drilling up to eight onshore wells by the end of 2019

-- The number of wells to be drilled will be dependent on results and prevailing market conditions

-- The results from the first HAW will be closely monitored to enable the high grading of further HAW drilling candidates

   --     Routine production activity 

-- H2 2019 work programme will continue with planned RCPs, routine WOs, reactivations and swabbing

   --     Overriding focus on becoming sustainably and significantly free cash flow generative 
   --     Maintain low operating break-even, providing strong operational hedging 

-- Further reduce opex/bbl via increased production (preserving base production and increasing individual well production rates) and leveraging via economies of scale, new technology applications and well optimisations

   --     Reduce capital costs of drilling new wells 
   --     Improve commercial terms across the asset base 

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:

"The first half of the year delivered another strong performance as Trinity continued to increase base production levels whilst controlling costs, deriving further operating efficiencies ahead of the recommencement of our onshore drilling programme. Importantly, with our financial performance demonstrating the success of our near-term strategy, we also continued to progress longer-term objectives with regards to our offshore opportunity.

"Our strong balance sheet and robust base production mean that we are delivering on our financial and production targets, and at the same time, ensuring that we can take advantage of any strategic opportunities that may arise. We remain focused on maximising output and returns for shareholders and continue to evaluate the best ways of protecting and enhancing those returns through prudent treasury management, industry leading operating practices and technical innovation. Given the strength of our business model, the ongoing work programme and visibility afforded by our balance sheet, we continue to face the future with confidence."

Management Interview

Watch management discuss today's results and future prospects by clicking on the following link: http://bit.ly/TRINH1_2019

Enquiries

 
 
   Trinity Exploration & Production 
   Bruce Dingwall, Executive Chairman 
   Jeremy Bridglalsingh, Chief Financial 
   Officer 
   Tracy Mackenzie, Corporate Development 
   Manager                                                 +44 (0)131 240 3860 
 SPARK Advisory Partners Limited (NOMAD 
  & Financial Adviser) 
  Mark Brady 
  Miriam Greenwood 
  Andrew Emmott                                            +44 (0)20 3368 3550 
 Cenkos Securities PLC (Broker) 
  Joe Nally (Corporate Broking) 
  Neil McDonald 
  Derrick Lee                                              +44 (0)20 7397 8900 
  Pete Lynch                                               +44 (0)131 220 6939 
 
 Whitman Howard Limited (Equity Adviser) 
  Nick Lovering 
  Hugh Rich                                                +44 (0)20 7659 1234 
 Walbrook PR Limited                         trinityexploration@walbrookpr.com 
  Nick Rome                                                +44 (0)20 7933 8780 
 

Competent Person's Statement

All reserves and resources related information contained in this announcement has been reviewed and approved by Graham Stuart, Trinity's Technical Adviser, who has 36 years of relevant global experience in the oil industry. Mr. Stuart holds a BSC (Hons) in Geology.

About Trinity (www.trinityexploration.com)

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 (9) licences and, across all of the Group's assets, management's estimate of 2P reserves as at the end of 2018 was 24.5 mmbbls. Group 2C contingent resources are estimated to be 18.8 mmbbls. The Group's overall 2P plus 2C volumes are therefore 43.3 mmbbls.

Trinity is listed on the AIM market of the London Stock Exchange under the ticker TRIN.

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.

OPERATIONAL REVIEW

During H1 2019, the Company continued to build on the momentum achieved in 2018 through the continuation of the RCP programme, routine WOs, reactivations and swabbing, delivering 9% year-on-year production growth. The H2 2019 activity set will include up to eight new onshore infill wells alongside RCPs, WOs, reactivations and swabbing activities which is expected to lead to an increase in the base level of production going into 2020.

Onshore operations

-- H1 2019 average net production was 1,615 bopd (H1 2018: 1,530 bopd). The 6% increase was as a result of the infill wells drilled in 2018 and continued performance from the ongoing RCPs (5) and base maintenance WOs and reactivations (56) (H1 2018: 7 RCPs, 47 WOs and reactivations).

-- Technological strategies are being implemented using Supervisory Control and Data Acquisition ("SCADA") approach to:

- Reduce time to detect Electrical Shut Downs ("ESDs") from field power losses through the implementation of real time monitoring tools to potentially limit the amount of down time on wells

- Solution application for Sucker Rod Pumps and Progressive Cavity Pumps (support predicative analysis through real time surveillance and support well optimisation)

- Battery Station and Wells Site Tanks automation and monitoring

   --     H2 2019 planned work programme anticipates: 

- Up to eight infill wells which will allow a further rebasing of production levels

- 12 RCPs and ongoing base management via WOs and reactivations and swabbing across all onshore fields

East Coast operations

-- H1 2019 average production was 1,208 bopd (H1 2018: 1,046 bopd). The 15% increase in production was a result of the RCP executed in H2 2018 and the workover and reactivation campaign of 5 WOs during H1 2019 (H1 2018: 15 WOs)

-- H2 2019 work programme is targeting a second RCP offshore in addition to the programme of routine WOs and reactivations

-- Well optimisation strategies are being implemented using the SCADA approach to reduce current spend on real time monitoring and data aggregation of Electrical Submersible Pumps ("ESPs")

-- Trinity continues to invest in maintaining production levels via better power generation management, continued pump optimisation and the review of alternative artificial lift technologies to augment production

West Coast operations

-- H1 2019 average net production was 185 bopd (H1 2018: 195 bopd). The 5% decrease in production was the result of natural production decline. During H1 2019 5 WOs (H1 2018: nil) were executed to maintain base production levels

   --     H2 2019 planned work programme will include WOs on key wells to maintain production levels 

FINANCIAL REVIEW

Income Statement Analysis

 
                                                           H1 2019               H1 2018                        Change 
 Production 
 Average realised oil price (USD/ 
  bbl)                                                        59.1                    60                           (1) 
 Average net production (bopd)                               3,008                 2,771                           237 
 
 Statement of Comprehensive Income                         USD'000               USD'000                       USD'000 
 Operating revenues                                         32,216                30,098                         2,118 
 Operating expenses (excluding DD&A)                      (21,369)              (22,741)                         1,372 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 Operating profit before DD&A                               10,847                 7,357                         3,490 
 DD&A                                                      (5,102)               (4,746)                         (356) 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 Operating profit before SPT & PT                            5,745                 2,611                         3,134 
 SPT                                                       (4,427)            (3,650)                            (777) 
 PT                                                          (247)                  884                        (1,131) 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 Operating profit before exceptional 
  items                                                      1,071                 (155)                         1,226 
 Exceptional items                                           (930)                11,616                      (12,546) 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 Operating profit/(loss)                                                                                             - 
 after exceptional items and SPT & PT                          141                11,461                      (11,320) 
 Finance cost                                                (713)               (1,279)                           566 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 Profit before Taxation                                      (572)                10,182                      (10,754) 
 Taxation (charge)/credit                                    (154)                 5,726                       (5,880) 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 (Loss)/profit after income tax                              (726)                15,908                      (16,634) 
 Currency translation                                           95                  (19)                           114 
-------------------------------------  ---------------------------  --------------------  ---------------------------- 
 Total comprehensive (expense)/income                        (631)                15,889                      (16,520) 
 

Operating Revenues

Operating revenues of USD 32.2 million (H1 2018: USD 30.1 million). Increased production drove the USD 2.1 million increase in revenue for the period despite a modestly lower realised oil price.

Operating Expenses See Note: Adoption of IFRS 16 in relation to Operating and G&A expenses

Operating expenses of USD (26.5) million (H1 2018: USD (27.5) million) comprised of the following:

   --     Royalties of USD (10.1) million (H1 2018: USD (10.0) million) 
   --     Production costs ("Opex") of USD (7.9) million (H1 2018: USD (8.3) million) 

-- Depreciation, Depletion and Amortisation ("DD&A") charges of USD (5.1) million (H1 2018: USD (4.7) million)

-- General and administrative ("G&A") expenditure of USD (2.7) million (H1 2018: USD (2.5) million)

   --     Share Option expense USD (0.5) million (H1 2018: USD (0.4) million) 
   --     Foreign Exchange loss USD (0.2) million (H1 2018: USD (0.0) million) 

-- Other expenses nil (H1 2018: (1.6) million relate to fair value adjustment on the oil price derivative in H1 2018)

Operating Profit Before Supplemental Petroleum Taxes ("SPT") and Property Tax ("PT")

The operating profit before SPT and PT for the period amounted to USD 5.7 million (H1 2018: USD 2.6 million) and was driven by increased production and effective cost control.

SPT & PT

The Group incurred an SPT charge of USD (4.4) million in H1 2019 (H1 2018: USD (3.7) million), on account of the realised oil price exceeding USD 50.0/bbl throughout the period. An accrual for PT of USD (0.2) million arose for the period (H1 2018: USD 0.9 million, comprising an accrual of H1 2018 of USD (0.2) million and a reversal for 2016 and 2017 of USD 1.1 million).

Operating Profit Before Exceptional items

The Operating Profit Before Exceptional items for the period amounted to USD 1.0 million (H1 2018: USD (0.2) million loss) and was mainly driven by increased production and effective cost control.

Exceptional items

Exceptional items charge of USD (0.9) million (H1 2018: USD (11.6) million credit) relate to:

   --     Impairment of property plant and equipment USD 0.8 million (H1 2018: nil) 
   --     Impairment of receivables and inventory USD 0.1 million (H1 2018: nil) 

-- Fees relating to corporate restructuring and unsecured creditor compromise USD 0.0 million (H1 2018: nil)

-- Gain on fair value of financial instrument nil (H1 2018: USD 11.6 million credit). In 2018 a revaluation of the embedded call option associated with the Convertible Loan Notes ("CLNs") incurred a non-cash gain. The embedded call option associated with the CLN was revalued as at 30 June 2018 which resulted in a fair value gain arising on the financial instrument. This gain was eliminated when the CLNs were converted or repaid subsequent to the period end, and as such did not appear in the 2018 full year results.

Net Finance Cost

Finance costs for the period totalled USD (0.7) million (H1 2018: USD (1.3) million), comprised of:

-- Unwinding of the discount rate on the decommissioning provision of USD (0.6) million (H1 2018: USD (0.8) million)

   --     Accrued interest on CLN- nil (H1 2018: USD (0.5) million) 
   --     Interest income -  USD 0.1 million (H1 2018: USD 0.0 million) 
   --     Interest on taxes - USD (0.1) million (H1 2018:  nil) 
   --     Interest on leases - USD (0.1) million (H1 2018:  nil) 

Taxation

Taxation (charge)/credit for the period was USD (0.2) million charge (H1 2018: USD 5.7 million credit), comprised of:

   --     Reduction in deferred tax assets recognised of USD (0.8) million (H1 2018: USD 5.8 million) 
   --     Reduction in deferred tax liability of USD 0.7 million (H1 2018: USD (0.0) million) 
   --     Unemployment Levy of USD (0.1) million (H1 2018: (0.1) million) 

As at 30 June 2019, the Group had unrecognised tax losses of USD 234.8 million (H1 2018: 213.0 million) which have no expiry date.

Total Comprehensive (Expense)/ Income

Total Comprehensive Expense for the period was USD (0.6) million (H1 2018: 15.9 million income, as a result of non-cash exceptional items).

Cash Flow Analysis

Opening Cash Balance

Trinity began the year with an initial cash balance of USD 10.2 million (2018: USD 11.8 million).

 
 Summary of Statement of Cash Flows 
                                                      H1 2019   H1 2018    FY 2018 
                                                      USD'000   USD'000    USD'000 
 Opening cash balance                                  10,201    11,792     11,792 
---------------------------------------------------  --------  --------  --------- 
 Cash movement 
 Net cash inflow from operating activities             10,394     4,996      5,207 
 Net cash outflow from Unsecured and T&T State 
  Creditor payments                                         -   (3,254)    (5,835) 
 Net cash outflow from investing activities           (2,541)   (4,403)   (12,460) 
 Net cash outflow from financing activities             (288)         -     11,497 
---------------------------------------------------  --------  --------  --------- 
 Increase/ (decrease) in cash and cash equivalents      7,565   (2,661)    (1,591) 
 Closing cash balance                                  17,766     9,131     10,201 
===================================================  ========  ========  ========= 
 

Net cash inflow from operating activities

Cash inflow from operating activities was USD 10.4 million (H1 2018: USD 5.0 million).

-- Operating activities for H1 2019 resulting in an adjusted profit before changes in working capital and tax of USD 6.4 million (H1 2018: USD 5.7 million)

-- Changes in working capital resulted in a net increase of USD 3.9 million (H1 2018: USD (0.7) million)

-- Trade and other receivables in relation to Petroleum Company of Trinidad and Tobago ("Petrotrin") restructuring:

- Trinity received USD 5.3 million from Petrotrin in H1 2019 for crude oil volumes delivered for the period October to November 2018 in H1 2019

- At 30 June 2019 the outstanding balance from Petrotrin was USD 1.4 million. Post 30 June 2019 Trinity received a further USD 0.9 million which leaves a remaining outstanding balance of USD 0.5 million. Management anticipates full payment by the end of Q3 2019

   --     Taxation paid USD (0.0) million (H1 2018: USD (0.1) million ) 

Restructuring related payments

There were no working capital cash out ows relating to the restructuring during H1 2019 as these debts were fully repaid in H2 2018. In H1 2018: payments of USD (3.3) million were made to T&T State Creditors (BIR and MEEI)

Cash outflow from investing activities

Trinity incurred capital expenditures mainly on production related investment on its onshore assets and infrastructure investment on its East Coast assets totaling USD (2.5) million in aggregate (H1 2018: USD (4.4) million)

Net cash outflow from financing activities

Cash payment on leases of USD (0.2) million (H1 2018: nil). See note adoption of IFRS 16

Closing Cash Balance

Trinity's cash balance at 30 June 2019 was USD 17.8 million (H1 2018: USD 9.1 million)

Adoption of IFRS 16 Leases

IFRS 16 Leases ("IFRS 16") is a new accounting standard effective 1 January 2019. This accounting standard supersedes IAS 17 Leases and results in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, Right of Use Assets ("ROU") and a financial liability to pay rentals are recognised. The only exceptions are short-term (less than 12 months) and low-value leases (less than USD 5,000).

The Group has adopted IFRS 16 from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the simplified transitional approach. On transition the Group elected to apply the practical expedient to grandfather the assessment of which transactions are leases. It applied IFRS 16 only to contracts that were previously identified as leases. Contracts that were not identified as leases under IAS 17 and IFRIC 4 were not reassessed. Therefore, the definition of a lease under IFRS 16 has been applied only to contracts entered into or changed on or after 1 January 2019.

On adoption of IFRS 16, the group has recognised ROU assets and lease liabilities in relation to Motor vehicles, Office buildings, Staff houses and Office Equipment. The following table sets forth the impact of the adoption of IFRS 16 on the condensed consolidated financial statements as well as non-IFRS measures.

   1.    Impact on Condensed Consolidated Statement of Comprehensive Income 
 
      (a) Impact on Net Profit and Earnings per share:     IFRS 16          IAS 17             Difference 
                                                           USD'000         USD'000                USD'000 
 Expenses 
 Production costs ("Opex")                                 (7,903)         (8,116)                    213 
 General & Administrative Expenses ("G&A")                 (2,665)         (2,739)                     74 
 Depreciation, Depletion and Amortisation                  (5,102)         (4,867)                  (235) 
 Finance costs                                               (713)           (632)                   (81) 
                                                          (16,383)        (16,354)                   (29) 
                                                         =========  ==============  ===================== 
 
 Total Comprehensive (Expense)/Income for the period         (631)           (602)                   (29) 
                                                         ---------  --------------  --------------------- 
 Earnings Per Share                                           0.00            0.00                   0.00 
 

(b) Impact on non-IFRS measures used by the Group:

 
                                             IFRS 16     IAS 17          Difference 
 Opex                           USD '000     (7,903)    (8,116)                 213 
 G&A                            USD '000     (2,665)    (2,739)                  74 
                                           ---------  ---------  ------------------ 
 Total                          USD '000    (10,568)   (10,855)                 287 
 
 H1 2019 Metrics 
 Opex                            USD/bbl        14.5       14.9               (0.4) 
 G&A                             USD/bbl         4.9        5.0               (0.1) 
 Adjusted EBITDA                USD '000      11,506     11,219                 287 
 Adjusted EBITDA                 USD/bbl        21.1       20.6                 0.5 
 Adjusted EBITDA After 
  SPT & PT                      USD '000       6,832      6,545                 287 
 Adjusted EBITDA After 
  SPT & PT                       USD/bbl        12.5       12.0                 0.5 
 Group operating break-even      USD/bbl        25.6       26.3               (0.7) 
 
 
 
 
 
   2.    Impact on Condensed Consolidated Statement of Financial Position 
 
 ROU and Lease Liabilities recognised in Balance Sheet:    1-Jan-19   Depreciation   Lease Payment   30-Jun-19 
                                                            USD'000                                   USD '000 
 ROU recognised 
 Non- current assets                                          1,739          (235)               -       1,504 
                                                          ---------  -------------  --------------  ---------- 
                                                              1,739          (235)               -       1,504 
                                                          =========  =============  ==============  ========== 
 
 Lease Liabilities recognised as at 1 January 2019 
 Current lease liabilities                                      529                          (207)         322 
 Non-current lease liabilities                                1,210                                      1,210 
                                                              1,739              -           (207)        1504 
                                                          =========  =============  ==============  ========== 
 

Cash Plus Working Capital Surplus (Formerly Net Cash/Debt Position)

 
 Statement of Financial Position                         H1 2019                H1 2018 
  Extract 
                                                          USD MM                 USD MM 
 
                                                       Unaudited              Unaudited 
 A: Current Assets 
       Cash and cash equivalents                            17.8                    9.1 
       Trade and other receivables                           9.6                    6.3 
       Inventories                                           5.3                    3.9 
       Derivative financial asset                              -                   11.6 
 Total Current Assets                                       32.7                   30.9 
                                          ======================  ===================== 
 
 B: Liabilities 
       Non-current 
       Convertible loan note(1)                                -                    7.3 
       Total Non-Current Liabilities(2)                        -                    7.3 
 
       Current 
       Trade and other payables                             10.7                    9.9 
       Taxation payable                                      0.0                    0.2 
       Derivative Financial Instrument                         -                    1.7 
       Total Current Liabilities(3)                         10.7                   11.8 
 Total Liabilities                                          10.7                   19.1 
                                          ======================  ===================== 
 
 (A-B): Cash plus working capital 
  surplus                                                   22.0                   11.8 
 

Notes:

1. States the Face Value of the 2018 CLN and MEEI liabilities as opposed to amortised cost stated in the Financials

2. Non-Current Liabilities excludes Lease Liabilities, Deferred Tax Liability & Provision for other liabilities

   3.            Current Liabilities excludes Lease Liabilities and Provision for other liabilities 

APPIX 1: TRADING SUMMARY

A summary of realised price, production, operating break-evens, Opex and G&A expenditure metrics is set out below:

Trading Summary Table

 
 Details                           H1 2019(1)   H1 2018   % Change 
 
 Realised price (USD/bbl)                59.1      60.0         -2 
 Production (bopd) 
 Onshore                                1,615     1,530          6 
 West Coast                               185       195        (5) 
 East Coast                             1,208     1,046         15 
--------------------------------  -----------  --------  --------- 
 Group Consolidated                     3,008     2,771          9 
 
 Operating break-even (USD/bbl) 
 Onshore                                 15.9      15.7          2 
 West Coast                              33.5      24.4         37 
 East Coast                              19.4      27.8       (30) 
 Group Consolidated(2)                   26.3      28.5        (8) 
 
 Metrics (USD/bbl) 
 Opex/bbl - Onshore                      11.7      11.4          3 
 Opex/bbl - West Coast                   27.6      20.3         36 
 Opex/bbl - East Coast                   15.4      21.5       (29) 
 Opex/bbl - Group Consolidated           14.9      16.5        (9) 
 G&A/bbl                                  5.0       5.0          - 
 

Notes:

1. Metrics does not include the impact of IFRS 16 for H1 2019 so as to illustrate the like-for like, period -on-period comparative with H1 2018. Refer to section on Adoption of IFRS 16 Leases for additional explanations

2. Group operating break-even: The realised price/bbl for which the adjusted EBITDA/bbl for the Group is equal to zero.

Independent review report to Trinity Exploration & Production Plc

Report on the Condensed Consolidated Interim Financial Statements

Our conclusion

We have reviewed Trinity Exploration & Production Plc's Condensed Consolidated Interim Financial Statements (the "interim financial statements") in the interim results of Trinity Exploration & Production Plc for the 6 month period ended 30 June 2019. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

What we have reviewed

The interim financial statements comprise:

   --    the Condensed Consolidated Statement of Financial Position as at 30 June 2019; 
   --    the Condensed Consolidated Statement of Comprehensive Income for the period then ended; 
   --    the Condensed Consolidated Cashflow Statement for the period then ended; 
   --    the Condensed Consolidated Statement of Changes in Equity for the period then ended; and 
   --    the explanatory notes to the interim financial statements. 

The interim financial statements included in the interim results have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the AIM Rules for Companies.

As disclosed in note 1 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Group is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.

Responsibilities for the interim financial statements and the review

Our responsibilities and those of the directors

The interim results, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the interim results in accordance with the AIM Rules for Companies which require that the financial information must be presented and prepared in a form consistent with that which will be adopted in the company's annual financial statements.

Our responsibility is to express a conclusion on the interim financial statements in the interim results based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the AIM Rules for Companies and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

What a review of interim financial statements involves

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. 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.

We have read the other information contained in the interim results and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements.

PricewaterhouseCoopers LLP

Chartered Accountants

Aberdeen

10 September 2019

STATEMENT OF DIRECTORS' RESPONSIBILITY

The Directors confirm that this condensed consolidated interim financial information has been prepared in accordance with International Accounting Standards ("IAS") 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

-- 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

Bruce Dingwall, CBE

Executive Chairman

 
                                                            Trinity Exploration & Production plc 
 
                                        Condensed Consolidated Statement of Comprehensive Income 
                                                               for the period ended 30 June 2019 
                                                            (Expressed in United States Dollars) 
------------------------------------------------------------------------------------------------ 
                                                Notes      6 months    6 months       Year ended 
                                                         to 30 June    to 30 June    31 December 
                                                               2019       2018              2018 
                                                              $'000         $'000          $'000 
                                                        (unaudited)   (unaudited)      (audited) 
 Operating Revenues 
    Crude oil sales                                          32,205        30,085         62,578 
    Other income                                                 11            13             15 
                                                       ------------  ------------  ------------- 
                                                             32,216        30,098         62,593 
 
 Operating Expenses 
    Royalties                                              (10,142)      (10,013)       (20,390) 
    Production costs                                        (7,903)       (8,259)       (17,754) 
    Depreciation, depletion and amortisation    1,7,8       (5,102)       (4,746)       (10,694) 
    General and administrative expenses                     (2,665)       (2,510)        (5,240) 
    Share option expense                           11         (494)         (369)          (737) 
    Foreign exchange (loss)/gain                              (165)           (4)             17 
    Other operating expenses                                     --       (1,586)        (1,075) 
                                                       ------------  ------------  ------------- 
                                                           (26,471)      (27,487)       (55,873) 
                                                       ------------  ------------  ------------- 
 
 Operating Profit Before Supplemental 
  Petroleum Taxes ("SPT") and Property 
  Tax ('PT")                                                  5,745         2,611          6,720 
 
 SPT                                                        (4,427)       (3,650)        (7,050) 
 PT                                               4           (247)           884            607 
                                                       ------------  ------------  ------------- 
 
 Operating Profit/ (Loss) Before 
  Exceptional Items                                           1,071         (155)            277 
 
 Exceptional items                                3           (930)        11,616        (2,312) 
                                                       ------------  ------------  ------------- 
 
 Operating Profit/ (Loss) After 
  Exceptional Items                                             141        11,461        (2,035) 
 
 Net finance cost                                 6           (713)       (1,279)        (2,056) 
                                                       ------------  ------------ 
 
 (Loss)/Profit Before Income Taxation                         (572)        10,182        (4,091) 
 
 Income Taxation (expense)/credit                 5           (154)         5,726        (1,270) 
                                                       ------------  ------------  ------------- 
 
 (Loss)/Profit for the period                                 (726)        15,908        (5,361) 
 
 Other Comprehensive Income/(Expense) 
 Currency Translation                                            95          (19)             40 
                                                       ------------  ------------  ------------- 
 
 Total Comprehensive (Expense)/Income 
  for the period                                              (631)        15,889        (5,321) 
                                                       ============  ============  ============= 
 
 
 
 Earnings per share (expressed in 
  dollars per share) 
 
 Basic                               16   (0.00)   0.06   (0.02) 
 Diluted                             16   (0.00)   0.04   (0.02) 
 
 
 
                                                        Trinity Exploration & Production plc 
 
                                      Condensed Consolidated Statement of Financial Position 
                                                           for the period ended 30 June 2019 
                                                        (Expressed in United States Dollars) 
-------------------------------------------------------------------------------------------- 
                                               Notes      As at 30      As at 30    As at 31 
                                                         June 2019     June 2018    December 
                                                                                        2018 
 ASSETS                                                      $'000         $'000       $'000 
                                                       (unaudited)   (unaudited)   (audited) 
 Non-current Assets 
    Property, plant and equipment                7          50,112        52,552      53,599 
    Right-of-use assets                          1           1,504            --          -- 
    Intangible assets                            8          26,082        25,708      25,757 
    Abandonment fund                                         3,124         2,185       2,979 
    Performance bond (Investment held 
     to maturity)                                              253           253         253 
    Deferred tax asset                          12           5,217         9,948       5,973 
                                                      ------------  ------------  ---------- 
                                                            86,292        90,646      88,561 
                                                      ------------  ------------  ---------- 
 Current Assets 
    Inventories                                              5,255         3,940       3,738 
    Trade and other receivables                  9           9,570         6,254      13,343 
    Derivative financial assets                                 --        11,616          -- 
    Cash and cash equivalents                               17,766         9,131      10,201 
                                                      ------------  ------------  ---------- 
                                                            32,591        30,941      27,282 
                                                      ------------  ------------  ---------- 
 Total Assets                                              118,883       121,587     115,843 
                                                      ============  ============  ========== 
 
 Equity 
 Capital and Reserves Attributable 
  to Equity Holders 
    Share capital                               10          97,692        96,676      97,692 
    Share premium                               10         139,879       125,362     139,879 
    Other equity                                                --           590          -- 
    Share based payment reserve                 11          13,784        12,922      13,290 
    Reverse acquisition reserve                           (89,268)      (89,268)    (89,268) 
    Merger reserves                                         75,467        75,467      75,467 
    Translation reserve                                    (1,649)       (1,532)     (1,638) 
    Accumulated deficit                                  (177,104)     (155,204)   (176,473) 
                                                      ------------  ------------  ---------- 
 Total Equity                                               58,801        65,013      58,949 
 
 Non-current Liabilities 
    Lease liabilities                            1           1,210            --          -- 
    Convertible loan note ("CLN")                               --         3,378          -- 
    Deferred tax liability                      12           4,911         2,508       5,598 
    Provision for other liabilities             13          42,569        38,772      41,802 
                                                      ------------  ------------  ---------- 
                                                            48,690        44,658      47,400 
                                                      ------------  ------------  ---------- 
 Current Liabilities 
    Trade and other payables                    14          10,711         9,862       9,147 
    Lease liabilities                            1             322            --          -- 
    Taxation payable                             5              41           198          -- 
    Derivative financial liabilities                            --         1,703          -- 
    Provision for other liabilities             13             318           153         347 
                                                      ------------  ------------  ---------- 
                                                            11,392        11,916       9,494 
 Total Liabilities                                          60,082        56,574      56,894 
                                                      ------------  ------------  ---------- 
 Total Shareholders' Equity and Liabilities                118,883       121,587     115,843 
                                                      ============  ============  ========== 
 

Trinity Exploration & Production plc

Condensed Consolidated Statement of Changes in Equity

for the period ended 30 June 2019

(Expressed in United States Dollars)

 
                    Share     Share     Other      Share       Reverse     Merger   Translation   Accumulated    Total 
                  Capital   Premium    Equity      Based   Acquisition    Reserve       Reserve       Deficit 
                                                 Payment       Reserve 
                                                 Reserve 
                    $'000     $'000     $'000      $'000         $'000      $'000         $'000         $'000    $'000 
                 --------  --------  --------  ---------  ------------  ---------  ------------  ------------  ------- 
 
 Balance at 1 
  January 2018     96,676   125,362       590     12,553      (89,268)     75,467       (1,678)     (171,112)   48,590 
 Share based 
  payment 
  charge               --        --        --        369            --         --            --            --      369 
 Translation 
  difference           --        --        --         --            --         --           146            --      146 
 Total 
  comprehensive 
  income 
  for the 
  period               --        --        --         --            --         --            --        15,908   15,908 
 Balance at 30 
  June 2018 
  (unaudited)      96,676   125,362       590     12,922      (89,268)     75,467       (1,532)     (155,204)   65,013 
                 ========  ========  ========  =========  ============  =========  ============  ============  ======= 
 
 Balance at 1 
  January 2019     97,692   139,879        --     13,290      (89,268)     75,467       (1,638)     (176,473)   58,949 
 Share based 
  payment 
  charge               --        --        --        494            --         --            --            --      494 
 Translation 
  difference           --        --        --         --            --         --          (11)            --     (11) 
 Total 
  comprehensive 
  loss for 
  the period           --        --        --         --            --         --            --         (631)    (631) 
 Balance at 30 
  June 2019 
  (unaudited)      97,692   139,879        --     13,784      (89,268)     75,467       (1,649)     (177,104)   58,801 
                 ========  ========  ========  =========  ============  =========  ============  ============  ======= 
 
 
                                                             Trinity Exploration & Production plc 
 
                                                        Condensed Consolidated Cashflow Statement 
                                                                for the period ended 30 June 2019 
                                                             (Expressed in United States Dollars) 
------------------------------------------------------------------------------------------------- 
                                                 Notes      6 months      6 months     Year ended 
                                                          to 30 June    to 30 June    31 December 
                                                                2019          2018           2018 
                                                               $'000         $'000          $'000 
                                                         (unaudited)   (unaudited)      (audited) 
 Operating Activities 
 Profit before taxation                                        (572)        10,182        (4,091) 
 Adjustments for: 
     Translation difference                                     (93)         (675)            330 
     Finance Income                                               78            31             -- 
     Finance cost                                  6              --           359            499 
     Share option expense                                        494           368            737 
     Finance cost - decommissioning provision      6             586           778          1,557 
     Depreciation, depletion and amortisation    1,7,8         5,102         4,746         10,694 
     Loss on disposal of assets                    7              --           (6)            (6) 
     Impairment of property, plant and 
      equipment                                    7             835            --          2,561 
     Impairment of inventory                                      50            --             -- 
     Impairment of receivables                                    54            --             -- 
     Fair value zero cost collar                                  --         1,586             -- 
     Gain recognised on embedded derivative                       --      (11,616) 
     Unsecured creditors claim                     3            (19)            --          (192) 
     Compromised creditor balances                                --          (18)             -- 
                                                               6,515         5,735         12,089 
                                                        ------------  ------------  ------------- 
 
 Changes In Working Capital 
    (Increase)/Decrease in Inventory                         (1,567)         (163)             28 
    Decrease/(Increase) in Trade and other 
     receivables                                               3,687         (843)        (9,513) 
    Increase/(Decrease) in Trade and other 
     payables                                                  1,802           395          2,731 
                                                        ------------  ------------  ------------- 
    Taxation paid                                               (43)         (128)          (128) 
                                                        ------------  ------------  ------------- 
 
 Net Cash Inflow From Operating Activities                    10,394         4,996          5,207 
 
 Restructuring related payments 
    T&T State creditors (BIR and MEEI)                            --       (3,254)        (5,835) 
 
 Investing Activities 
    Purchase of computer software                                 --            --           (26) 
    Exploration and Evaluation Assets              8           (332)          (46)          (170) 
    Purchase of property, plant & equipment        7         (2,209)       (4,357)       (12,264) 
 Net Cash Outflow From Investing Activities                  (2,541)       (4,403)       (12,460) 
                                                        ------------  ------------  ------------- 
 
 Financing Activities 
    Finance cost                                                  --            --           (94) 
    Cash payment on lease (ROU)                                (288)            --             -- 
    Issue of shares (net of costs)                                --            --         12,361 
    Repayment of CLNs                                             --            --          (770) 
                                                        ------------  ------------  ------------- 
 Net Cash (Outflow)/Inflow From Financing 
  Activities                                                   (288)            --         11,497 
                                                        ------------  ------------  ------------- 
 
 Increase/(Decrease) in Cash and Cash 
  Equivalents                                                  7,565       (2,661)        (1,591) 
                                                        ============  ============  ============= 
 Cash And Cash Equivalents 
    At beginning of period                                    10,201        11,792         11,792 
    Increase/(Decrease)                                        7,565       (2,661)        (1,591) 
                                                        ------------  ------------  ------------- 
     At end of period                                         17,766         9,131         10,201 
                                                        ============  ============  ============= 
 

Trinity Exploration & Production plc

Notes to the Condensed Consolidated Financial Statements for the period ended 30 June 2019

   1    Background and Accounting Policies 

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.

Basis of Preparation

These condensed interim financial statements for the six months ended 30 June 2019 have been prepared in accordance with IAS 34, 'Interim financial reporting', as adopted by the European Union ("EU"), on a going concern basis. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31 December 2018, which have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the EU.

The results for the six months ended 30 June 2019 and 30 June 2018 are unaudited 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 2018 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.

Going Concern

In making their going concern assessment, the Directors have considered the Group's budget and cash flow forecasts taken together with its performance during the first half of the financial year.

During the period, the Group continued to control its operating costs and capital expenditures carefully. As a consequence, unaudited cash balances increased to $17.8 million as at 30 June 2019, an increase of $7.6 million compared to the cash balance at the end of 31 December 2018 ($10.2 million), which is available to support the recommencement of the Group's drilling campaign in H2 2019.

The Group continues to work hard on all facets of its business by maintaining close attention to base production, growing production through new infill drilling, progressing the TGAL development, and being well positioned to capitalise on the changing local market. The Group meets its day-to-day working capital requirements through revenue generation and positive operating cash flows. The Group's forecast and projections, taking account of reasonable possible changes in oil price and sales volume, show that the Group will be able to operate within the level of its current cash resources. Should there be a decline in the oil price, the Board believe there are a number of actions within their control that can be effected. These include deferral of capital expenditure and further reducing operating costs to manageable levels. For these reasons, the Board of Directors have a reasonable expectation that the Group has adequate resources to continue operational existence for the foreseeable future. The Group therefore continues to adopt the going concern basis of preparing the interim financial statements.

Accounting policies

The accounting policies adopted are consistent with those of the previous financial year, and corresponding interim reporting period, except for the estimation of income tax (note 5a) and the adoption of new and amended standards as set out below.

New and amended standards adopted by the group

A number of new or amended standards became applicable for the current reporting period, and the Group had to change its accounting policies as a result of adopting IFRS 16 Leases.

The impact of the adoption of the leasing standard and the new accounting policies are disclosed in note "Changes in accounting policies" below. The other standards did not have any impact on the Group's accounting policies and did not require retrospective adjustments.

Changes in accounting policies

   --      Adoption of IFRS 16 Leases ("IFRS 16") 

The Group adopted IFRS 16, effective 1 January 2019. This is a new accounting standard resulting in almost all leases being recognised on the balance sheet, as the distinction between operating and finance leases is removed. Under the new standard, an asset (the right to use the leased item) and a financial liability to pay rentals are recognised. The only exceptions are short-term (less than 12 months) and low-value leases (less than $5,000).

The Group has adopted IFRS 16 from 1 January 2019, but has not restated comparatives for the 2018 reporting period, as permitted under the simplified transitional approach.

On adoption of IFRS 16, the Group has recognised right of use assets and lease liabilities, but under the practical expedient permitted by the standard, elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the Group relied on its assessment made applying IAS 17 and IFRIC 4 determining whether an arrangement contains a Lease.

   a)    Adjustments recognised on adoption of IFRS 16 

Right of Use Assets ("ROU") and Lease Liabilities recognised in Balance Sheet

 
                                         30 June 2019   01 January 
                                                              2019 
                                                $'000        $'000 
 ROU recognised 
 Non- current assets                            1,504        1,739 
 
 Lease Liabilities recognised 
 Current lease liabilities                        322          529 
 Non-current lease liabilities                  1,210        1,210 
                                                1,504        1,739 
                                 ====================  =========== 
 

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.

   i.      Impact on Earnings per share 
 
 
                                              IFRS 16     IAS 17     Difference 
                                                $'000      $'000          $'000 
 Expenses 
 Production costs                             (7,903)    (8,116)            213 
 General and administrative expenses          (2,665)    (2,739)             74 
 Depreciation, depletion and amortisation     (5,102)    (4,867)          (235) 
 Finance cost                                   (713)      (632)           (81) 
                                            ---------  ---------  ------------- 
                                             (16,383)   (16,354)           (29) 
                                            ---------  ---------  ------------- 
 
 Total Comprehensive (Expense)/Income 
  for the period                                (631)      (602)           (29) 
                                            ---------  ---------  ------------- 
 Earnings per Share                            (0.00)     (0.00)         (0.00) 
 
   ii.       Practical expedients applied 

In applying IFRS 16 for the first time, the Group has used the following practical expedients permitted by the standard:

-- the use of a single discount rate to a portfolio of leases with reasonably similar characteristics

   --      reliance on previous assessments on whether leases are onerous 

-- the accounting for operating leases with a remaining lease term of less than 12 months as at January 2019 as short-term leases

-- the exclusion of initial direct costs for the measurement of the right-of-use asset at the date of initial application, and the use of hindsight in determining the lease term where the contract contains options to extend or terminate the lease.

The Group has also elected not to reassess whether a contract is, or contains a lease at the date of initial application. Instead, for contracts entered into before the transition date the Group relied on its assessment made applying IAS 17 and IFRIC 4 Determining whether an Arrangement contains a Lease.

   b)    The Group's leasing activities and how these are a accounted for: 

The Group has lease agreements for various types of assets; Motor vehicles, Office buildings, Staff house and Office equipment leases are typically made for fixed terms ranging between 1-3 years but may have extension options.

Until the 2018 financial year, leases of property, plant and equipment were all classified as operating leases as the Group had no finance leases. Payments made under operating leases (net of any incentives received from the lessor) were charged to profit or loss on a straight-line basis over the period of the lease.

From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance cost is charged to profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of fixed payments (including in-substance fixed payments), less any lease incentives receivable.

The lease payments are discounted using a 9.25% incremental borrowing rate, being the rate that the Group believes it would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions.

Right-of-use assets are measured at cost comprising the following:

   --      the amount of the initial measurement of lease liability 

-- any lease payments made at or before the commencement date less any lease incentives received

   --      any initial direct costs, and 
   --      restoration costs. 

Payments associated with short-term leases and leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise of assets value less than $5,000.

Estimates

The preparation of 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 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 Condensed Consolidated Financial Statements for the year ended 31 December 2018.

Cash and cash equivalents

For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

Trade receivables

Trade receivables are amounts due from customers 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.

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.

Impairment of financial assets

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.

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.

Financial assets at fair value through profit or loss financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

   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 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 2018, which can be found at 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. At the end of June 2019 the Group held cash at bank of $17.8 million (2018:$10.2 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 - the Petroleum Company of Trinidad & Tobago ("Petrotrin") Limited and, from 1 December 2018, Heritage Petroleum Company Limited ("Heritage")

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. Having reviewed past payments combined with the credit profile of its existing trade debtors in order to assess the potential for impairment, the Company has concluded that this is insignificant as there has been no history of default or disputes arising on invoiced amounts since inception and as such the credit loss percentage is assumed to be almost zero. No provision for doubtful accounts against these sales has been recorded as at 30 June 2019 and 31 December 2018.

   3    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 financial statements are highlighted below.

 
                                              30 June   30 June   31 December 
                                                 2019      2018          2018 
                                                $'000     $'000         $'000 
 Reversal of bad debt written off                  --        --         (205) 
 Unsecured creditor compromise                     19        --          (70) 
 Impairment of property, plant and 
  equipment (Note 8)                            (835)        --         2,561 
 Impairment of receivables and inventory        (104)        --            -- 
 Fees relating to corporate restructuring        (10)        --            26 
 Gain on fair value of financial                   --    11,616            -- 
  instrument 
 
 
 Exceptional (charge)/credit                    (930)    11,616         2,312 
                                             ========  ========  ============ 
 

-- Unsecured creditor compromise - ($0.0 million): Gain under the creditor settlements arising from compromised balances with suppliers.

-- Impairment on Property, Plant and Equipment - ($0.8 million): Charge resulting from impairment losses in Onshore Assets.

-- Impairment of receivables and inventory - ($0.1 million): Charge for impairment of debtor balance no longer recoverable and charge resulting from impairment of inventory.

-- Fees relating to corporate restructuring - ($0.0 million): Charge in relation to trustee fees incurred in H1 2019.

   4    Property Tax ("PT") 
 
                                      30 June   30 June   31 December 
                                         2019      2018          2018 
                                        $'000     $'000         $'000 
 PT charges                             (247)     (216)         (493) 
 Reversal of 2016 and 2017 charges         --     1,100         1,100 
 
                                        (247)       884           607 
                                     ========  ========  ============ 
 

On 8 June 2018 the Property Tax Amendment Act 2018 was assented to by the Government of Trinidad and Tobago. The Act effectively waived the obligation to pay PT up to December 2017. The Company continues to accrue for PT in 2019.

   5    Income taxation (expense)/ credit 
 
 a. Taxation                                 30 June   30 June   31 December 
                                                2019      2018          2018 
 Current tax                                   $'000     $'000         $'000 
 
   *    Current period 
 Petroleum profits tax                            --        --           (5) 
 Unemployment levy                              (84)      (62)            -- 
 
 Deferred tax 
 
   *    Current period 
 Movement in asset due to tax losses           (757)     5,750         1,794 
 Movement in liability due to accelerated 
  tax depreciation                               650         5       (2,991) 
 Unwinding deferred tax on FV uplift              37        33          (68) 
 Income tax expense/(credit)                   (154)     5,726       (1,270) 
                                            ========  ========  ============ 
 

Current tax: The Group's effective tax rate varies from the statutory rate for UK companies of 19.0% (2018: 19.0%) mainly as a result of tax losses set off against future taxable profits, allowable and disallowable expenses.

Deferred tax: The Group has a deferred tax asset of $5.2 million on its Condensed Consolidated Statement of Financial Position which it expects to recover in more than 12 months based on the expected taxable profits generated by Group companies.

 
                                                              30 June   31 December 
                                               30 June 2019      2018          2018 
                                                      $'000     $'000         $'000 
 b. Taxation payable current 
 Petroleum Profits Tax("PPT")/ Unemployment              41        --            -- 
  Levy("UL") 
 Due to BIR (PPT,CT and UL)                              --       198            -- 
 Taxation payable                                        41       198            -- 
                                              =============  ========  ============ 
 

The $0.04 million relates to Unemployment Levy incurred for the period.

   6    Net finance cost 
 
                                                                           31 December 
                                             30 June 2019   30 June 2018          2018 
                                                    $'000          $'000         $'000 
 Unwinding of discount on Decommissioning           (586)          (778)       (1,557) 
 Interest on loans                                     --          (390)         (592) 
 Interest unwind on liabilities                        --          (142)            -- 
 Interest on taxes                                  (125)             --            -- 
 Interest on leases                                  (80)             --            -- 
 Interest income                                       78             31            93 
 
                                                    (713)        (1,279)       (2,056) 
                                            =============  =============  ============ 
 
   7    Property, Plant and Equipment 
 
                                                Plant &          Land &           Oil & 
                                              Equipment       Buildings    Gas Property   Other           Total 
                                                  $'000           $'000           $'000   $'000           $'000 
                                            -----------  --------------  --------------  ------  -------------- 
 Opening net book amount at 1 
  January 2019                                      962           1,705          50,932      --          53,599 
 Additions                                          389              52           1,768      --           2,209 
 Impairment                                          --              --           (835)      --           (835) 
 Depreciation, depletion and amortisation 
  charge for period                               (209)            (82)         (4,569)      --         (4,860) 
 Translation difference                              --              --             (1)      --             (1) 
 Closing net book amount 30 June 
  2019                                            1,142           1,675          47,295      --          50,112 
                                            ===========  ==============  ==============  ======  ============== 
 
 Period ended 30 June 2019 
 Cost                                            11,309           3,297         290,448     336         305,390 
 Accumulated depreciation, depletion, 
  amortisation and impairment                  (10,167)         (1,622)       (243,152)   (336)       (255,277) 
 Translation difference                              --              --             (1)      --             (1) 
 Closing net book amount 30 June 
  2019                                            1,142           1,675          47,295      --          50,112 
                                            ===========  ==============  ==============  ======  ============== 
                                                Plant &          Land &           Oil & 
                                              Equipment       Buildings    Gas Property   Other         Total 
                                                  $'000           $'000           $'000   $'000         $'000 
                                            -----------  --------------  --------------  ------  ------------ 
 Opening net book amount at 1 
  January 2018                                    3,767           1,726          46,957      --        52,450 
 Additions                                          205               2           4,434      --         4,641 
 Disposal                                            --             (6)              --      --           (6) 
 Reclassification of DDA                        (2,470)              --           2,470      --            -- 
 Depreciation, depletion and amortisation 
  charge for period                               (784)            (70)         (3,892)      --       (4,746) 
 Translation difference                              --             (1)             214      --           213 
 Closing net book amount 30 June 
  2018                                              718           1,651          50,183      --        52,552 
                                            ===========  ==============  ==============  ======  ============ 
 
 Period ended 30 June 2018 
 Cost                                            10,643           3,111         279,353     336       293,443 
 Accumulated depreciation, depletion, 
  amortisation and impairment                   (9,925)         (1,459)       (229,384)   (336)     (241,104) 
 Translation difference                              --             (1)             214      --           213 
                                            -----------  --------------  --------------  ------  ------------ 
 Closing net book amount 30 June 
  2018                                              718           1,651          50,183      --        52,552 
                                            ===========  ==============  ==============  ======  ============ 
                                                Plant &          Land &           Oil & 
                                              Equipment       Buildings      Gas Assets   Other         Total 
                                                  $'000           $'000           $'000   $'000         $'000 
                                            -----------  --------------  --------------  ------  ------------ 
 Year ended 31 December 2018 
 Opening net book amount at 1 
  January 2018                                    3,767           1,726          46,957      --        52,450 
 Additions                                          483             135          11,646      --        12,264 
 Disposal                                            --             (6)              --      --           (6) 
 Adjustment for decommissioning 
  estimate                                           --              --           2,076      --         2,076 
 Impairment                                          --              --         (2,561)      --       (2,561) 
 Reclassification of assets between 
  categories                                    (2,470)              --           2,470      --            -- 
 Depreciation, depletion and amortisation 
  charge for year                                 (818)           (150)         (9,696)      --      (10,664) 
 Translation difference                              --              --              40      --            40 
                                            -----------  --------------  --------------  ------  ------------ 
 Closing net book amount 31 December 
  2018                                              962           1,705          50,932      --        53,599 
                                            ===========  ==============  ==============  ======  ============ 
 
   At 31 December 2018 
 Cost                                            13,391           3,245         286,172     336       303,144 
 Accumulated depreciation, depletion, 
  amortisation and impairment                  (12,429)         (1,540)       (235,280)   (336)     (249,585) 
 Translation difference                              --              --              40      --            40 
                                            -----------  --------------  --------------  ------  ------------ 
 Closing net book amount                            962           1,705          50,932      --        53,599 
                                            ===========  ==============  ==============  ======  ============ 
 

Note: An impairment loss of $0.8 million was recognised in respect of several Oil and Gas assets as a result of carrying value being higher than the recoverable amount. The recoverable amount was determine by utilising its fair value less costs of disposal.

   8    Intangible Assets 
 
                                       Computer       Exploration    Total 
                                       Software    and evaluation 
                                                           assets 
                                          $'000             $'000    $'000 
 At 1 January 2019                          246            25,511   25,757 
 Additions                                   --               332      332 
 Amortisation                               (7)                --      (7) 
 At 30 June 2019                            239            25,843   26,082 
                                     ----------  ----------------  ------- 
 
 At 1 January 2018                          250            25,341   25,591 
 Additions                                   --                46       46 
 Translation difference                      --                71       71 
 At 30 June 2018                            250            25,458   25,708 
                                     ----------  ----------------  ------- 
 
 At 1 January 2018                          250            25,341   25,591 
 Computer software                           26                --       26 
 Exploration and evaluation assets           --               170      170 
 Amortisation                              (30)                --     (30) 
 At 31 December 2018                        246            25,511   25,757 
                                     ==========  ================  ======= 
 

Exploration and evaluation assets: related to the TGAL exploration well and field development plan.

   9    Trade and Other Receivables 
 
                            30 June   30 June   31 December 
                               2019      2018          2018 
 Due within one year          $'000     $'000         $'000 
 Trade receivables - net      5,020     3,264        10,408 
 Prepayments                  1,389     1,217           846 
 VAT recoverable              2,584     1,372         1,610 
 Other receivables              577       401           479 
                              9,570     6,254        13,343 
                           ========  ========  ============ 
 

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 - Having reviewed past payment performance combined with the credit rating of Petrotrin/Heritage in order to assess the potential for impairment, the Group has concluded this to be insignificant as there has been no history of default or disputes arising on invoiced amounts in the past 5 years and as such the credit loss percentage is assumed to be almost zero.

There was a delay in collecting trade receivables for October and November 2018 amounting to $6.7 million due to the restructuring of the Group's sole customer Petrotrin/ Heritage at the end of December 2018. However, $5.3 million of these have been collected with a remaining $1.4 million outstanding as at 30 June 2019.

VAT recoverable - VAT recoverable is due from the Trinidad and Tobago Board of Inland Revenue ("T&T BIR"). In reviewing past payment performance combined with credit rating of the T&T BIR, the Group has concluded the ECL to be insignificant as there has been no history of default arising on the amount collectable and the timing of recovery is consistent with past outstanding amounts.

   10   Share capital 
 
                            Number of   Ordinary   Share premium     Total 
                               shares     shares           $'000 
                                           $'000                     $'000 
 As at 1 January 2019     384,049,246     97,692         139,879   237,571 
 As at 30 June 2019       384,049,246     97,692         139,879   237,571 
                         ============  =========  ==============  ======== 
 
   11   Share Based Payment Reserve 

The share-based payments reserve is used to recognise over the vesting period:

- The grant date fair value of options issued to employees but not exercised

- The grant date fair value of shares issued to employees

- The grant date fair value of deferred shares granted to employees but not yet vested

- The issue of shares held by the Employee Share Trust to employees.

During 2019 the Group granted share-based payment arrangements to certain of its employees and Executive Directors under the Long Term Incentive Plan ('LTIP'). The charge in relation to these arrangements is shown below, with further details of the new LTIP grants following:

 
                                                                31 December 
                                 30 June 2019   30 June 2018           2018 
                                        $'000          $'000          $'000 
 At 1 January                          13,290         12,553         12,553 
 Share based payment expense: 
 Long term incentive plan                 494            369            737 
                                -------------  -------------  ------------- 
 At 31 December                        13,784         12,922         13,290 
                                =============  =============  ============= 
 

Long Term Incentive Plan

In January 2019 Options over 2,824,000 ordinary shares and in May 2019 Options over 3,832,824 ordinary shares were granted under the LTIP in accordance with the policy announced to the market on 25 August 2017. The LTIP awards are designed to provide long-term incentives for Senior Managers and Executive Directors to deliver long-term shareholder returns. Under the plan, participants were granted options which only vest if certain performance standards are met. Participation in the plan is at the Board's discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefits.

The LTIP Awards are subject to the achievement of Relative Total Shareholder Return ("TSR") performance targets measured over a three-year performance period ending on 1 January 2021 and 31 December 2021 respectively. TSR is the increase in share price plus the value of any dividends paid over a period of time and captures the full return shareholders see on an investment. Relative TSR is the comparison of these returns against peer companies over a set period of time.

The January 2019 LTIP awards will vest on 1 January 2021, while the May 2019 awards will vest on 2 January 2022 subject to meeting the performance criteria set out in the table below and continued employment with the Company. The Options are exercisable at nil cost by the participants.

 
 Performance targets          January 2019 LTIPs         May 2019 LTIPs 
 
 Below the Median           None of the award will   None of the award will 
                             vest                     vest 
                           -----------------------  ----------------------- 
 Median (50th percentile)   30% of the maximum       30% of the maximum 
                             award will vest          award will vest 
                           -----------------------  ----------------------- 
 Between Median and         Straight Line basis      Straight Line basis 
  Upper Quartile             between these points     between these points 
                           -----------------------  ----------------------- 
 Upper Quartile (75%)       100% of the maximum      100% of the maximum 
                             award will vest          award will vest 
                           -----------------------  ----------------------- 
 Above the Upper Quartile   100% of the maximum      100% of the maximum 
                             award will vest          award will vest 
                           -----------------------  ----------------------- 
 

The total fair value at grant date of the 2019 LTIP awards was $0.9 million and this will be pro-rated and expensed over the vesting period. The fair value at grant date was determined using a Monte Carlo simulation model that takes into account the exercise price, the term of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield, the risk free interest rate for the term of the option and the correlations and volatilities of the peer group companies. The model inputs for the 2019 LTIP awards granted during the period ended 30 June 2019 included:

 
                                 January 2019   May 2019 LTIPs 
                                        LTIPs 
 Grant Dates                   2 January 2019       9 May 2019 
 Share price at grant dates          GBp16.77         GBp14.66 
 Exercise price                       GBP0.00          GBP0.00 
 Expected volatility                   113.9%           113.9% 
 Risk-free interest rates               0.73%            0.73% 
 Expected dividend yields                  0%               0% 
 Vesting dates                 1 January 2021        2 January 
                                                          2022 
 
   12   Deferred Income Taxation 

The analysis of deferred income taxes is as follows:

 
                                                          30 June   31 December 
                                         30 June 2019        2018          2018 
                                                $'000       $'000         $'000 
 Deferred tax assets: 
 -Deferred tax assets to be recovered 
  in more than 12 months                      (5,217)     (9,948)       (5,973) 
 -Deferred tax assets to be recovered 
  in less than 12 months                           --          --            -- 
 Deferred tax liabilities: 
 -Deferred tax liabilities to be 
  settled in more than 12 months                4,911       2,508         5,598 
 Net deferred tax (assets)/liability            (306)     (7,440)         (375) 
                                        =============  ==========  ============ 
 

The movement on the deferred income tax is as follows:

 
                                                      30 June   31 December 
                                       30 June 2019      2018          2018 
                                              $'000     $'000         $'000 
                                      -------------  --------  ------------ 
 At beginning of year                         (375)   (1,641)       (1,641) 
 Movement for the year                          106   (5,799)         1,334 
 Unwinding of deferred tax on fair 
  value uplift                                 (37)        --          (68) 
 Net deferred tax (asset)/liability           (306)   (7,440)         (375) 
                                      =============  ========  ============ 
 

The deferred tax balances are analysed below:

 
                       1 January    Movement      30 June   Movement   31 December    Movement      30 June 
                            2018                     2018                     2018                     2019 
                           $'000       $'000        $'000      $'000         $'000       $'000        $'000 
                     -----------  ----------  -----------  ---------  ------------  ----------  ----------- 
 Deferred tax 
  assets 
 Acquisition            (33,436)          --     (33,436)         --      (33,436)                 (33,436) 
 Tax losses 
  recognised            (34,293)     (5,760)     (40,053)      3,966      (36,087)     (1,195)     (37,282) 
 Tax losses 
  derecognised            63,550         (9)       63,541          9        63,550       1,951       65,501 
                     -----------  ----------  -----------  ---------  ------------  ----------  ----------- 
                         (4,179)     (5,769)      (9,948)      3,975       (5,973)         756      (5,217) 
                     ===========  ==========  ===========  =========  ============  ==========  =========== 
 Deferred tax          1 January    Movement      30 June   Movement   31 December    Movement        30 June 
  liabilities               2018                     2018                     2018                       2019 
 Accelerated 
  tax depreciation        14,043          --       14,043      3,127        17,170       (651)         16,619 
 Non-current 
  asset impairment      (33,214)          --     (33,214)         --      (33,214)          --       (33,214) 
 Acquisitions             19,580          --       19,580         --        19,580          --         19,580 
 Fair value 
  uplift                   2,129        (30)        2,099       (37)         2,062        (36)          2,025 
                     -----------  ----------  -----------  ---------  ------------  ----------  ------------- 
                           2,538        (30)        2,508      3,090         5,598       (687)          4,911 
                     ===========  ==========  ===========  =========  ============  ==========  ============= 
 

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 is probable. The Group recognises deferred tax assets over a 3 year outlook which is consistent with prior periods. Deferred tax assets of $0.8 million have been de-recognised (2018: $1.8 million was recognised). Deferred tax liabilities have reduced by $0.7 million (2018: $3.0 million increase) based on the carrying values of property, plant and equipment and intangible assets which gave rise to the temporary differences. The Group has unrecognised tax losses amounting to $234.8 million which have no expiry date (2018: $233.3 million).

Deferred tax assets and liabilities can only be offset in the Statement of Financial Position 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).

   13   Provisions and Other Liabilities 
 
 Non-Current:                        Decommissioning        Total 
                                                cost 
                                               $'000        $'000 
 6 months ended 30 June 2019 
 Opening amount as at 1 January 
  2019                                        41,802       41,802 
 Unwinding of discount                           586          586 
 Decommissioning provision                        --           -- 
 Translation differences                         181          181 
                                  ------------------  ----------- 
 Closing balance as at 30 
  June 2019                                   42,569       42,569 
                                  ==================  =========== 
 
 6 months ended 30 June 2018 
 Opening amount as at 1 January 
  2018                                        37,151       37,151 
 Unwinding of discount                           778        1,062 
 Decommissioning provision                       739          455 
 Translation differences                         104          104 
                                  ------------------  ----------- 
 Closing balance as at 30 
  June 2018                                   38,772       38,772 
                                  ==================  =========== 
 
 Year ended 31 December 2018 
 Opening amount as at 1 January 
  2018                                        37,151       37,151 
 Increase in provision for 
  new wells                                    1,164        1,164 
 Unwinding of discount                         1,557        1,557 
 Revision to estimates                           867          867 
 Decommissioning provision                     1,074        1,074 
 Translation differences                        (11)         (11) 
                                  ------------------  ----------- 
 Closing balance at 31 December 
  2018                                        41,802       41,802 
                                  ==================  =========== 
                                                       Closure of 
   Current:                        Litigation claims         pits   Total 
                                               $'000        $'000   $'000 
 6 months ended 30 June 2019 
 Opening amount as at 1 January 
  2019                                           115          232     347 
 Litigation claims settled                      (29)           --    (29) 
 Closing balance as at 30 
  June 2019                                       86          232     318 
                                  ==================  ===========  ====== 
 
 6 months ended 30 June 2018 
 Opening amount as at 1 January 
  2018                                           115           --     115 
 Provision for litigation 
  claims                                           6           --       6 
 Litigation claims settled                      (38)           --    (38) 
 Provision for drill pit 
  closure                                         --           70      70 
 Closing balance as at 30 
  June 2018                                       83           70     153 
                                  ==================  ===========  ====== 
 
 Year ended 31 December 2018 
 Opening amount as at 1 January 
  2018                                           115           --     115 
 Increase in provision                            --          232     232 
 Closing balance at 31 December 
  2018                                           115          232     347 
                                  ==================  ===========  ====== 
 
   14   Trade and Other Payables 
 
                                    30 June   30 June 2018   31 December 
                                       2019                         2018 
                                      $'000          $'000         $'000 
 
 Current: 
 Trade payables                       2,009          1,085         3,076 
 Accruals                             3,548          3,009         3,454 
 VAT payable                             --            170            -- 
 Other payables                         951            783           701 
 SPT & PT                             4,203          2,436         1,916 
 Due to BIR Interest on taxes(1)         --          1,749            -- 
 Due to MEEI(2)                          --            630            -- 
                                     10,711          9,862         9,147 
                                   ========  =============  ============ 
 

Notes 2018:

1. Due to the BIR is interest on taxes totaling $1.7 million. These were fully repaid by year end 2018

2. Financial liabilities due to the MEEI of $2.1 million were substantially modified based on the new terms of repayment. This transaction was accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability of $1.9 million based on its fair value. In 2018 $0.3 million was repaid with a nominal value of $0.6 million outstanding at 30(th) June 2018 and fully repaid by year end 2018

   15   Adjusted EBITDA 

Adjusted EBITDA is a non-IFRS measure used by the Group to measure business performance. It is calculated as Operating Profit before SPT and PT for the period, adjusted for depreciation, depletion and amortisation, share option expenses, foreign exchange loss/(gain) and the impact of derivative hedge instruments (other expenses).

The Group presents Adjusted EBITDA as it is used in assessing the underlying performance of the Group's business by excluding items not considered by management to reflect the underlying performance of the Group.

Adjusted EBITDA is calculated as follows:

 
                                                                6 months           6 months        Year ended 
                                                              to 30 June         to 30 June          December 
                                                                    2019               2018              2018 
                                                                   $'000              $'000             $'000 
                                                       -----------------  -----------------  ---------------- 
            Operating Profit Before SPT & PT                       5,745              2,611             6,720 
 
            Depreciation, depletion and amortisation               5,102              4,746            10,694 
            Share option expenses                                    494                369               737 
            Loss on oil derivative hedge instruments                  --              1,586             1,075 
            Foreign exchange loss/ (gain)                            165                  4              (17) 
                                                       -----------------  -----------------  ---------------- 
            Adjusted EBITDA                                       11,506              9,316            19,209 
 
                                                                   $'000              $'000             $'000 
                                                       -----------------  -----------------  ---------------- 
            Weighted average ordinary shares 
             outstanding - basic                                 384,049            282,400           330,579 
            Weighted average ordinary shares 
             outstanding - diluted                               416,123            400,708           355,995 
                                                                       $                  $                 $ 
            Adjusted EBITDA per share - basic                      0.030              0.033             0.058 
 Adjusted EBITDA per share - diluted                               0.028              0.023             0.054 
 

Adjusted EBITDA after the impact of SPT and PT is calculated as follows:

 
                                                         6 months           6 months        Year ended 
                                                       to 30 June         to 30 June          December 
                                                             2019               2018              2018 
                                                            $'000              $'000             $'000 
                                                -----------------  -----------------  ---------------- 
            Adjusted EBITDA                                11,506              9,316            19,209 
            SPT                                           (4,427)            (3,650)           (7,050) 
            PT(1)                                           (247)              (216)             (493) 
                                                -----------------  -----------------  ---------------- 
            Adjusted EBITDA after SPT and PT                6,832              5,450            11,666 
 
                                                            $'000              $'000             $'000 
                                                -----------------  -----------------  ---------------- 
            Weighted average ordinary shares 
             outstanding - basic                          384,049            282,400           330,579 
            Weighted average ordinary shares 
             outstanding - diluted                        416,123            400,708           355,995 
                                                                $                  $                 $ 
            Adjusted EBITDA per share - basic               0.018              0.019             0.035 
 Adjusted EBITDA per share - diluted                        0.016              0.014             0.033 
 

(1 PT - 30 June and Year ended December 2018 excludes the reversal of 2016 and 2017 waiver of $1.1 million)

   16   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.

 
                 Weighted            Total             Earnings      Exceptional          Adjusted           Adjusted 
                  Average        Comprehensive         Per Share       Items $         Comprehensive         Earnings 
                  Number           (Expense)/              $                         Income/ (Expense)       Per Share 
                 Of Shares         Income For                                          For The Period            $ 
                   '000            The Period                                             $'000(1) 
                                     $'000 
 Period ended 30 June 2019 
    Basic        384,049             (631)              (0.00)           930                299                0.00 
   Diluted       384,049             (631)              (0.00)           930                299                0.00 
 
 Period ended 30 June 2018 
    Basic        282,400             15,889              0.06         (11,616)             4,273               0.02 
   Diluted       400,708             15,889              0.04         (11,616)             4,273               0.01 
 
 Year ended 31 December 2018 
    Basic        330,579            (5,321)             (0.02)          2,312             (3,009)             (0.01) 
   Diluted       330,579            (5,321)             (0.02)          2,312             (3,009)             (0.01) 
 

1 Adjusted Comprehensive income - Total Comprehensive (Expense)/Income before Exceptional items

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 comprising 32,072,822 are considered potential ordinary shares. Share options of 1,975,084 are considered potential ordinary shares and have not been included as the exercise hurdle would not have been met.

There was no impact on the weighted average number of shares outstanding during period ended 30 June 2019 as all share options and LTIP's were excluded from the weighted average dilutive share calculation because their effect would be anti-dilutive and therefore both basic and diluted earnings per share are the same.

   17   Contingent Liabilities 

i) The farm-out agreement for the Tabaquite Block (held by Coastline International Inc.) has expired. The Coastline entity had a sub licence (farm out) with Petrotrin for the Tabaquite Block in relation to Petroleum operating activities. The last sub licence agreement dated March 2000 had various renewal options which expired on 28 February 2010. The terms of a renewed sub licence have been agreed with Heritage but the agreement has not been executed pending renewal of the exploration and production head licence between Heritage and the Government of the Republic of Trinidad and Tobago. There may be additional liabilities arising when a new agreement is finalised, but these cannot be presently quantified until a new agreement is available.

ii) Parent company guarantee. A Letter of Guarantee has been established over the Point Ligoure, Guapo Bay & Brighton ("PGB") Block where a subsidiary of Trinity is obliged to carry out a Minimum Work Programme to the value of $8.4 million. The guarantee shall be reduced at the end of each twelve month period upon presentation of all technical data and results of the Minimum Work Programme performed.

iii) On 3 June 2017 a performance bond was established by the Group's Lease Operatorship Assets ("LOA"). A performance bond in the form of a cash deposit of $0.3 million in the name of the beneficiary Petrotrin/ Heritage was established for due and punctual observance of the matters under the LOA effective until 31 December 2020.

   18   Events after the Reporting Period 

-- Subsequent to the period end in the month of July 2019 the Company put in certain oil price derivatives which are intended to help mitigate the impact of SPT on its cash flows. The derivatives comprise of the following.

- Put spread with a WTI price floor of $50.0/bbl and a cap of $55.0/bbl for 12,500 bbls per month over the period from 1 July 2019 to 31 December 2019.

- 3 way option with a WTI price floor of $ 50.0/bbl and a cap of $55.0/bbl and with a call strike price of $ 64.4/bbl for 12,500 bbls per month over the period from 1 July 2019 to 30 June 2020.

-- At the end of June 2019 Trinity had $1.4 million outstanding from Petrotrin in relation to crude oil receivables relating to October and November 2018. Subsequent to 30 June 2019 $0.9 million of the outstanding amount has been received by Trinity, with remaining balance of $0.5 million expected to be repaid in the coming months.

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(END) Dow Jones Newswires

September 10, 2019 02:00 ET (06:00 GMT)

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