Trinity, an independent E&P company focused on Trinidad and Tobago, announces its interim results for the six months ended 30th June 2015.
Operating highlights
- Group average net production levels of 3,085 boepd for H1 2015 (H1 2014: 3,795 boepd)
- Net Q2 production averaged 2,939 boepd
- Continued progress made towards TGAL Field Development Plan (“FDP”)
- 45% reduction in General and Administrative (“G&A”) costs year-on-year to USD 5.7 million for H1 2015
- Further G&A reductions post period end to take run rate down by an additional USD1.6 million per annum
- Development and exploration activities currently suspended
Financial highlights
- Trinity benefited from not being subject to Supplemental Petroleum Taxes (“SPT”) when the WTI oil price fell below USD 50.0/bbl
- Revenues of USD 27.8 million (H1 2014: USD 62.3 million)
- Reduced operating costs by 36% at USD 12.0 million (H1 2014:USD 18.7 million)
- Impairment of USD 6.1 million pre acquisition costs to date on Blocks 1(a) & 1(b)
- EBITDA before exceptional items/ exploration costs written off of USD 1.6 million (H1 2014: USD 12.5 million)
- Operating loss before exceptional items/ exploration costs write off of USD 1.3 million (H1 2014 : USD 3.8 million profit)
- Cash outflow from operating activities USD 1.1 million (H1 2014 : USD 4.4 million inflow)
- Net loss after tax of USD 15.8 million (H1 2014:USD 22.9 million)
- Cash balance at period end of USD 8.2 million (H1 2014: 9.6 million)
- Current extension for moratorium on principal repayments relating to Trinity’s outstanding debt extended to 9th October 2015
Strategic highlights
- Trinity is currently conducting a strategic review of its business in order to maximise value for shareholders. The Company is subject to The City Code on Takeovers and Mergers and has opted to conduct discussions with parties interested in making a proposal to the Company under the framework for a “Formal Sales Process” (FSP) of its assets
- Post the period end, Trinity announced the sale of the Company’s 100% interest in the Guapo-1 block for a cash consideration of USD 2.8 million, against a book value of USD 2.2 million. Proceeds from the sale will be used to service the Company’s senior debt
- Trinity has been unable to extend the term of its agreement to complete the purchase of 80% interest in Blocks 1(a) & 1(b) from Centrica. Consequently, the Sale and Purchase Agreement (“SPA”) between Trinity and two subsidiaries of Centrica was terminated
- The Tabaquite block, is currently classified as ‘held-for-sale’ with no proceeds as yet having been received from LGO Energy plc (“LGO”) despite signature of a binding Sale and Purchase Agreement (“SPA”) to acquire 100% of the issued shares of Tabaquite Exploration & Production Company Limited (“TEPCL”) from Trinity for a total consideration of USD 2.0 million. Trinity is yet to receive monies due under the SPA. The company is working hard to bring this matter to a satisfactory conclusion.
Outlook
Key priorities for the Company are to:
- Achieve a c. 20% reduction in full year production operating expenditure to USD 26.0 million
- Submission of the TGAL draft FDP
- Identify and arrange financing to fund the Company’s future developments
Further to the strategic review and FSP that we announced in April, Trinity is in discussions with a number of parties. Trinity Shareholders are advised that there can be no certainty that any offer or other transaction will result from the formal sales process or as to the terms on which any offer or other transaction may be made.
Discussion with the Group’s bankers is ongoing and, under the assumption that the Group’s remaining external debt is not recalled following expiry of the current moratorium on 9th October 2015, the Group has sufficient cash flow to continue operating for at least the next 12 months from the date of approval of these financial statements and the Board of Directors continues to adopt the going concern basis of preparing the financial statements (see note 1).
Joel “Monty” Pemberton, Chief Executive Officer of Trinity, commented:
“We remain on track to reduce our operating costs by 20% this year and have made good progress in cutting G&A by 45% for the half year with further reductions post the period end. Despite the significantly reduced levels of capital expenditure our production levels have held up well, reflecting the robust nature of the asset base.
We continue to explore all of the options for our business to ensure we can maximise value for our shareholders. The SPA agreed on the Guapo-1 block demonstrates the on-going attractiveness of Trinity’s portfolio. The FSP process remains competitive, with discussions ongoing with several interested parties, and we look forward to announcing additional news on the strategic review and FSP in due course.
At oil prices below US$50/bbl we do not pay SPT which in conjunction with on-going operational efficiencies and cost cutting enhances our production economics and the value of Trinity’s portfolio.”
Competent Person’s Statement
The information contained in this Circular has been reviewed and approved by Dr Ryan Ramsook, the Company’s Head of Sub Surface, who has 10 years of relevant experience in the oil industry. Dr Ramsook holds a PhD in Geology.
Read the full Interim Results and Condensed Consolidated Financial Statements here.