Trinity Exploration & Production, the independent E&P company focused on Trinidad and Tobago, has provided an update on operations for the three-month period ended 30 June 2023. The information contained herein has not been audited and may be subject to further review and amendment.
Jeremy Bridglalsingh, Chief Executive Officer of Trinity, commented:
'Trinity is delivering on important catalysts within our refreshed strategy. We are greatly encouraged by progress at our Jacobin well, testing the first of our nine deep Hummingbird prospects and where we reported multiple oil-bearing reservoirs in the Lower Cruse interval; the well sidetrack is drilling ahead and making good progress.
'In June, we announced that we had been successful in our bid for the Buenos Ayres block where we intend to leverage our competitive advantage in the Palo Seco area.
'On our Galeota East Coast asset, we appointed Petrofac to undertake a Concept Screening study for the development of further reserves and resources using a low cost, more flexible approach than originally envisaged.
'I look forward to continuing to update shareholders on our further progress at a very busy and exciting time for Trinity.'
Q2 2023 Operational Highlights
- The Company maintained solid production performance over the quarter with Q2 2023 sales volumes averaging 2,824 bopd (Q1 2023: 2,899 bopd; Q2 2022: 3,019 bopd).
- Production sales guidance for the full year 2023 remains unchanged at 2,800 bopd - 3,100 bopd.
- During Q2 2023:
- 1 recompletion ("RCP") (Q1 2023: 2; Q2 2022: 9) was completed.
- 16 workovers (Q1 2023: 39; Q2 2022: 31) were completed.
- swabbing operations continued across onshore and West Coast assets.
- The ABM-151 well in the Brighton Marine block, offshore the West Coast of Trinidad, was returned to production on 21 March 2023. During Q2 2023, the well flowed at an average rate of 125 bopd, above the target range.
Q2 2023 Financial Highlights
- The Group reports its consolidated financial information half yearly, in its Annual Report & Accounts and Interim Results, in accordance with UK adopted International Accounting Standards and the London Stock Exchange's AIM Rules for Companies. Quarterly, the Company provides unaudited information for guidance.
- Average realisation of US$ 63.7/bbl for Q2 2023 (Q1 2023: US$ 67.9/bbl, Q2 2022: US$ 96.8/bbl).
- EBITDA, pre-hedging(1), in Q2 2023 of US$ 4.5 million (unaudited) (Q1 2023: US$ 5.3 million (unaudited); Q2 2022 US$ 11.2 million).
- Operating break-even(2), pre-hedging(1), Q2 2023 of US$ 34.8/bbl (Q1 2023 of US$ 35.4/bbl; Q2 2022 US$ 31.3/bbl).
- Cash balance of US$ 11.3 million (unaudited) at 30 June 2023 versus US$ 11.4 million (unaudited) at 31 March 2023 and US$ 15.0 million at 30 June 2022.
- The Group had drawn borrowings (overdraft) of US$ 2.0 million at 30 June 2023 (US$ 2.3 million at 31 March 2023 and US$ 2.7 million at 30 June 2022). These borrowings match the Company's outstanding VAT receivable balance.
- The Company's second buyback programme, announced on 24 October 2022, concluded on 26 April 2023 with 760,000 Ordinary Shares repurchased.
On 28 April 2023, the Company announced a further share buyback programme which concluded on 27 June 2023, the date of the Annual General Meeting, and repurchased a further 117,000 Ordinary Shares bringing the total number of shares held in treasury to 1,549,000 (4.0 % of the Company's shares in issue).
Outlook
Jacobin Update
As announced on 13 July 2023, the Jacobin sidetrack is currently drilling ahead following unexpected well bore conditions in the original well.
The original wellbore penetrated over 2,000 ft of Lower Cruse section, with preliminary evaluation using a combination of Measurement While Drilling ("MWD") data (inclusive of MWD gamma ray) and together with analysis of well bore cuttings, pointing to at least three well developed, oil-bearing sand intervals in the Lower Cruse.
The next update on Jacobin is expected to be announced once the sidetrack has been completed and the full suite of data acquisition has been completed, which will provide a definitive view on all sands encountered.
2022 Onshore and Nearshore Competitive Bid Round
On 13 June 2023, Trinity announced its successful bid for the onshore Buenos Ayres block further leveraging our competitive advantage in the Palo Seco area.
Our investment in purchasing the North West District 3D seismic dataset and resultant exhaustive subsurface work has provided Trinity with an unparalleled understanding of the trapping mechanisms in the Palo Seco area. Our review of the 3D seismic over Buenos Ayres block, utilising our in-house knowledge, has highlighted multiple prospects at a variety of levels in this virgin block.
Buenos Ayres contains multiple stacked target reservoirs of the Lower Forest, Upper Cruse and Lower Cruse which are the most productive reservoirs in the Southern Basin in Trinidad.
We are planning to fast track the first exploration well on Buenos Ayres in 2024, subject to acquiring environmental approvals.
Galeota Concept Screening Study
On 27 June 2023, Trinity announced it had appointed Petrofac to undertake a Concept Screening study for the development of further reserves and resources in its Galeota Block. The Galeota Block contains estimated 2P+2C reserves and resources of 46.1 million barrels of oil equivalent and is the Company's largest asset.
The study will take a fresh look at development concepts for the Galeota Block, using the latest subsurface information and marrying that with Petrofac's global low-cost marginal field track record to develop a concept that can be taken forward into Conceptual Engineering, Front End Engineering and Project Sanction. Key elements will comprise flexibility to deal with reservoir uncertainty and using equipment that could be potentially relocated around the large Galeota Block. Leased Mobile Offshore Production Units ("MOPU") concepts such as converted jack-ups or Floating Production, Storage and Offloading ("FPSO") vessels will be considered as well as any other suitable scheme. The cost of the study is included within this year's capex guidance range.
The study has commenced and is expected to conclude in September, at which point a further update will be provided.
(1) The Company has no hedging in place in 2023.
(2) Operating break-even is the realised price/bbl where the adjusted EBITDA/bbl for the Group is equal to zero.
Source: Trinity Exploration
