TIDMTRIN
RNS Number : 5547J
Trinity Exploration & Production
08 April 2015
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN
PART, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO SO WOULD
CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF THAT
JURISDICTION
8 April 2015
Trinity Exploration & Production Plc (the "Company" or
"Trinity")
Strategic Review
Framework of Formal Sale Process and Commencement of Offer
Period
Introduction
Trinity announces that it is launching a strategic review of
options open to the Company to maximise value for shareholders.
The Company has received a number of conditional proposals and
expressions of interest in relation to certain of the Company's
assets.
In light of these approaches, the Company has decided to conduct
a review of its options which may include, but are not limited to,
a farm-out or sale of one or more of the Company's existing assets,
a corporate transaction such as a merger with or sale of the
Company to a third party or a subscription for the Company's
securities by one or more third parties.
The Company is subject to The City Code on Takeovers and Mergers
(the "Code") and has opted to conduct discussions with parties
interested in making a proposal to the Company under the framework
of a "formal sale process" as set out in the Code in order to
enable discussions relating to a merger or sale of the Company, in
particular, to take place on a confidential basis.
Operational Update
During the first quarter, Trinity's net production averaged
3,433 boepd. These production levels reflect the robust nature of
the asset base with declines being modest against a backdrop of
reduced levels of investment.
At Trintes (100% WI) and TGAL (65% WI) a rigorous subsurface
review is well advanced. Initial management best estimate STOIIP
for Trintes is 249 MMbbls. 2P reserves are currently estimated to
be 6.0 MMbbls with 14.0 MMbbls having been re-classified as 2C
contingent resources. Presently 31 candidate drilling locations
have been identified to potentially develop these contingent
resources.
At TGAL, initial STOIIP estimates of 50 MMbbls - 115 MMbbls have
increased significantly with management unrisked best estimates
currently 186 MMbbls and 17 candidate drilling locations having
been identified with the potential to develop 2C contingent
resources of 22.1 MMbbls (gross).
The joint Trintes-TGAL development plan review is on-going. With
Trinity's high working interests across its East Coast assets, the
opportunity to bring in partners following this review is being
considered.
Across all of the Company's assets management's estimate of 2P
reserves (inclusive of revisions, disposals and production) has
moved from 47.7 MMbbls at the end of 2013 to 16.4 MMbbls at the end
of 2014. Group 2C contingent resources are estimated to be 28.4
MMbbls. The Company's overall 2P plus 2C volumes are therefore 44.8
MMbbls. These volumes exclude 39.1 MMboe relating to the previously
announced agreement to acquire an 80% interest in Blocks 1a and 1b
from Centrica, which Trinity will book upon completion of that
transaction.
In regards to Blocks 1a and 1b, the technical work on the draft
Field Development Plan ("FDP") is largely complete and a Gas Sales
Agreement ("GSA") is at an advanced stage with a potential
offtaker. However, submission of the FDP and signature of the GSA
cannot be formally undertaken until the acquisition is
completed.
Financial and Corporate Update
Further to the Corporate and Operational Update announced on 16
February 2015, the Company provides the following update on its
financial position.
Trinity ended the first quarter of 2015 with cash and cash
equivalents of US$7.5 million, receivables of US$27.3 million
(including US$11.2 million VAT receivables owed to the Company),
inventories of US$8.1 million, debt of US$13.1 million, trade &
other payables of US$33.0 million and taxation payable of US$17.3
million.
As noted in the 16 February 2015 announcement, the significantly
lower oil price at the end of 2014 (and lower forecasted prices)
has triggered an impairment review and Trinity expects to recognise
a non-cash impairment charge in its audited 2014 financial
statements.
As previously announced, the Company and its lenders have agreed
on a moratorium on principal repayments relating to Trinity's
outstanding debt balance until 15 June 2015. Completion of the
previously announced acquisition of an 80% working interest in
Blocks 1a and 1b remains subject to the payment of US$22.5 million
to Centrica. Through the strategic review process, Trinity will be
seeking solutions to enable the Company to fund this
consideration.
Management have undertaken a number of initiatives to actively
manage the Company's liquidity position including, but not limited
to, the implementation of operational and overhead cost reduction
programmes and the sale of certain non-core assets.
As part of these initiatives, Bruce Dingwall's role will change
from Executive Chairman to Non-Executive Chairman, and all Board
members have agreed to a suspension of all fees relating to their
roles as Directors.
Bruce Dingwall, Non-Executive Chairman of Trinity,
commented:
"The opportunity set in Trinidad, in which Trinity shares, is of
enduring appeal throughout the commodity price cycle. Trinity has
received several proposals for different assets, and the task for
the Board must now be to conduct the most comprehensive review to
secure the best value for shareholders."
Formal Sale Process and the Takeover Code
The Company is subject to The City Code on Takeovers and Mergers
(the "Code") and has opted to conduct discussions with parties
interested in making a proposal to the Company under the framework
of a "formal sale process" as set out in the Code in order to
enable discussions relating to a merger or sale of the Company, in
particular, to take place on a confidential basis.
Parties with a possible interest in making a proposal should
contact RBC Capital Markets, the Company's exclusive financial
adviser in relation to the formal sales process, on the contact
details set out below.
Any party wishing to participate in the formal sales process
will be required to enter into a non-disclosure agreement with the
Company on reasonable terms satisfactory to the Board and on the
same terms, in all material respects, as other interested parties
before being permitted to participate in the process.
Following execution of such an agreement, the Company intends to
provide interested parties with information on the Company,
following which, such parties will be invited to submit proposals
to the Company.
The Board reserves the right to alter any aspect of the process
as outlined above or to terminate it at any time and will make
further announcements when appropriate. The Board reserves the
right to reject any approach or terminate discussions with any
interested party or participant at any time.
The Takeover Panel has granted a dispensation from the
requirements of Rules 2.4(a), 2.4(b) and 2.6(a) of the Code such
that any interested party participating in the formal sale process
will not be required to be publicly identified as a result of this
announcement (subject to note 3 to Rule 2.2 of the Code) and will
not be subject to the 28 day deadline referred to in Rule 2.6(a),
for so long as it is participating in the formal sale process.
Interested parties should note Rule 21.2 of the Code, which
prohibits any form of inducement fee or other offer-related
arrangement, and that the Company has not requested any
dispensation from this prohibition under Note 2 of Rule 21.2,
although it reserves the right to do so in the future.
Shareholders are advised this is not a firm intention to make an
offer under Rule 2.7 of the Code and there can be no certainty that
any offers will be made as a result of the formal sales process,
that any sale or other transaction will be concluded, nor as to the
terms on which any offer or other transaction may be made.
As a result of this announcement, the Company is now deemed to
be in an "offer period" as defined in the Code and the dealing
disclosure requirements listed below apply with immediate
effect.
Rule 2.10 Disclosure
In accordance with Rule 2.10 of the Code, as at the date of this
announcement, the Company has 94,799,986 ordinary shares of US$1.00
each. The International Securities Identification Number for the
ordinary shares is GB00B8JG4R91.
Note: all figures referenced are unaudited and subject to
change.
Competent Person's Statement:
The information contained in this announcement has been reviewed
and approved by Craig McCallum, Chief Operating Officer and
Director for Trinity Exploration and Production Plc, who has over
25 years of relevant experience in the oil industry. Mr. McCallum
holds a Master degree in Petroleum Engineering.
Enquiries:
Trinity Exploration & Production Tel: +44 (0) 13 1240
Joel "Monty" Pemberton, Chief Executive 3860
Officer
Tracy Mackenzie, Head of Investor Relations
RBC Capital Markets Tel: +44 (0) 20 7653
Oil and Gas Advisory 4000
Jakub Brogowski
Roland Symonds
Nomad and Corporate Broker
Matthew Coakes
Daniel Conti
Brunswick Group (Public Relations) Tel: +44 (0) 20 7404
Patrick Handley 5959
William Medvei
In accordance with Rule 30.4 of the Code, a copy of this
announcement will be made available on the Company's website at
www.trinityexploration.com as soon as possible. The content of the
website referred to in this announcement is not incorporated into
and does not form part of this announcement.
RBC Europe Limited (trading as RBC Capital Markets), which is
authorised by the Prudential Regulation Authority and regulated by
the Financial Conduct Authority and the Prudential Regulation
Authority in the United Kingdom, is acting for Trinity and no one
else in connection with the matters referred to in this
announcement and will not be responsible to anyone other than
Trinity for providing the protections afforded to clients of RBC
Capital Markets, or for providing advice in connection with the
matters referred to in this announcement.
This announcement is not intended to, and does not, constitute
or form part of any offer, invitation or the solicitation of an
offer to purchase, otherwise acquire, subscribe for, sell or
otherwise dispose of, any securities whether pursuant to this
announcement or otherwise. The distribution of this announcement in
jurisdictions outside the United Kingdom may be restricted by law
and therefore persons into whose possession this announcement comes
should inform themselves about, and observe such restrictions. Any
failure to comply with the restrictions may constitute a violation
of the securities law of any such jurisdiction.
Disclosure Requirements of the Takeover Code
Under Rule 8.3(a) of the Code, any person who is interested in
1% or more of any class of relevant securities of an offeree
company or of any securities exchange offeror (being any offeror
other than an offeror in respect of which it has been announced
that its offer is, or is likely to be, solely in cash) must make an
Opening Position Disclosure following the commencement of the offer
period and, if later, following the announcement in which any
securities exchange offeror is first identified. An Opening
Position Disclosure must contain details of the person's interests
and short positions in, and rights to subscribe for, any relevant
securities of each of (i) the offeree company and (ii) any
securities exchange offeror(s). An Opening Position Disclosure by a
person to whom Rule 8.3(a) applies must be made by no later than
3.30 pm (London time) on the 10th business day following the
commencement of the offer period and, if appropriate, by no later
than 3.30 pm (London time) on the 10th business day following the
announcement in which any securities exchange offeror is first
identified. Relevant persons who deal in the relevant securities of
the offeree company or of a securities exchange offeror prior to
the deadline for making an Opening Position Disclosure must instead
make a Dealing Disclosure.
Under Rule 8.3(b) of the Code, any person who is, or becomes,
interested in 1% or more of any class of relevant securities of the
offeree company or of any securities exchange offeror must make a
Dealing Disclosure if the person deals in any relevant securities
of the offeree company or of any securities exchange offeror. A
Dealing Disclosure must contain details of the dealing concerned
and of the person's interests and short positions in, and rights to
subscribe for, any relevant securities of each of (i) the offeree
company and (ii) any securities exchange offeror, save to the
extent that these details have previously been disclosed under Rule
8. A Dealing Disclosure by a person to whom Rule 8.3(b) applies
must be made by no later than 3.30 pm (London time) on the business
day following the date of the relevant dealing.
If two or more persons act together pursuant to an agreement or
understanding, whether formal or informal, to acquire or control an
interest in relevant securities of an offeree company or a
securities exchange offeror, they will be deemed to be a single
person for the purpose of Rule 8.3.
Opening Position Disclosures must also be made by the offeree
company and by any offeror and Dealing Disclosures must also be
made by the offeree company, by any offeror and by any persons
acting in concert with any of them (see Rules 8.1, 8.2 and
8.4).
Details of the offeree and offeror companies in respect of whose
relevant securities Opening Position Disclosures and Dealing
Disclosures must be made can be found in the Disclosure Table on
the Takeover Panel's website at www.thetakeoverpanel.org.uk,
including details of the number of relevant securities in issue,
when the offer period commenced and when any offeror was first
identified. You should contact the Panel's Market Surveillance Unit
on +44 (0) 20 7638 0129 if you are in any doubt as to whether you
are required to make an Opening Position Disclosure or a Dealing
Disclosure.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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