TIDMTRIN
RNS Number : 3590V
Trinity Exploration & Production
23 July 2018
RNS ANNOUNCEMENT: The information communicated in this
announcement contains inside information for the purposes of
Article 7 of Regulation 596/2014.
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Q2 2018 Operational Update
Trinity Exploration & Production plc (AIM: TRIN), the
independent E&P company focused on Trinidad and Tobago, today
provides an update on its operations for the three-month period
ended 30 June 2018.
This was a pivotal period for the Company with onshore
production commencing at two new infill wells and the announcement
of a US$20.0 million fundraise, completed post the period end, to
further accelerate onshore activities and facilitate full repayment
of all outstanding debt.
Q2 Operational Highlights
-- Group average production volumes were 2,821 bopd for the
three-month period (Q2) ended 30 June 2018 (Q1 2018: 2,721
bopd)
-- 4% increase in quarter on quarter Group production volumes from Q1 levels
-- 16% increase in year on year Group production for H1 2018
with average sales of 2,771 bopd (H1 2017: 2,397 bopd)
-- Production levels during Q2 2018 were impacted by equipment
and maintenance issues on two key offshore wells (both now back on
production)
-- A total of 3 RCPs (Q1: 4) and 29 workovers (Q1: 33) were
completed during the period, with swabbing operations executed
across all onshore assets
-- Two new infill development wells commenced production in Q2
2018, with an initial programme of six new onshore infill wells to
commence during H2 2018
-- Drilling contract signed for the initial six well campaign
Strong Balance Sheet
-- Cash balance of US$9.1 million (unaudited) as at 30 June 2018
(31 March 2018: US$12.2 million)
-- Net proceeds from the US$20.0m fundraise, which were received
post period end, together with the Company's existing cash
resources and forecast cash flow from operations, will enable the
Company to:
o accelerate its onshore drilling programme, positioning the
Company to grow production > 10% year-on-year with a planned
8-10 wells per year
o generate significant free cash flow and self-fund new onshore
drilling activity from 2020 onwards
o repay all outstanding debt (including the potentially dilutive
Convertible Loan Notes)
o selectively pursue acquisitions and other value accretive
opportunities
Funding to Accelerate Onshore Growth
In a period of improving oil prices and with continued, robust
break-evens (2017: US$30.9/bbl), Trinity's focus is on enhancing
shareholder value by increasing production across a largely fixed
operating cost base to deliver a further step-change in operating
earnings (2017: US$11.0m up 77% on 2016: US$6.2m).
In its Q1 2018 Operational Update, the Company noted that the
resurgence in activity levels on its onshore assets had effectively
lifted base level production from which to grow. This was as a
result of an intense focus on RCPs, workovers and swabbing
alongside continuous production optimisation across Trinity's
extensive well portfolio. Alongside this activity the preparation
for infill drilling operations has been ongoing with Trinity's
dedicated subsurface teams working up incremental locations for
future drilling, work which facilitated an increase on onshore 2P
reserves (+50% to 5.98 mmstb) and the commencement of infill
drilling in H1 2018.
This preparatory work has also now enabled Trinity to hit the
ground running with an accelerated and fully funded drilling
campaign commencing in H2 2018 with the aim of maintaining double
digit year-on-year production growth going forward.
Outlook
The completion of the US$20.0m fundraising has ensured that the
Company is now well positioned to take full advantage of the near,
medium and long-term opportunities that are available to grow and
develop its onshore and offshore activities. The near-term growth
will be underpinned by the accelerated drilling programme onshore
while the Company works towards a further material step-change in
production in the medium-term with the resumption of East Coast
drilling.
The Company will announce its interim results for the six-month
period ended 30 June 2018 in September. This will provide further
detail on production, margins, operating break-even, costs and
profitability - highlighting the growing value of the Company's
assets and continued strong financial performance in an environment
of improving oil prices.
Bruce A. I. Dingwall CBE, Executive Chairman of Trinity,
commented:
"We have established a stable and well-funded platform and are
ideally positioned to continue growing production, cash flow and
shareholder value with an accelerated infill drilling programme,
significant reserves and resources and an established growth
trajectory. With peer leading break-evens and plans to increase
production we can grow profitability in the short-term whilst
working up a further step-change from future developments. The
Board would like to take this opportunity to thank existing
shareholders for their support and welcome new shareholders as we
move forward debt free and ideally positioned to take advantage of
future opportunities as the environment in Trinidad & Tobago
evolves."
Enquiries
For further information please visit www.trinityexploration.com
or contact:
Trinity Exploration & Production plc +44 (0)131 240 3860
Bruce Dingwall CBE, Executive Chairman
Jeremy Bridglalsingh, Chief Financial Officer
Tracy Mackenzie, Corporate Development
Manager
SPARK Advisory Partners Limited (Nominated
Adviser and Financial Adviser) +44 (0)20 3368 3550
Mark Brady
Miriam Greenwood
Andrew Emmott
Cenkos Securities PLC (Broker)
Joe Nally (Corporate Broking)
Neil McDonald
Beth McKiernan
Derrick Lee +44 (0)20 7397 8900
Pete Lynch +44 (0)131 220 6939
Whitman Howard Limited (Equity Adviser) +44 (0)20 7659 1234
Nick Lovering
Hugh Rich
Walbrook PR Limited +44 (0)20 7933 8780
Nick Rome trinityexploration@walbrookpr.com
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London Stock Exchange. RNS is approved by the Financial Conduct
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END
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