Blencowe Resources: Aspiring to become one of the largest graphite producers in the world. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
25th April 2016 RNS "Trinity is continuing to target an eventual run-rate closer to 3,000 bopd over the next 12 month".
10th July 2023 RNS "Production sales guidance for the full year 2023 remains unchanged at 2,800 bopd - 3,100 bopd".
While the financial health has improved, shareholders have lost interest and SP has halved.
Will they pay a dividend as planned? I wouldn't be surprised if they cancel, given their record.
Not impressive.
I think they mean at least one month before they can figure out whether it is a meaningful drill or n
I suspect they did not return the investment, but we may never know.
I am now wondering if the share price will bottom out before the well
At spudding, it was predicted to reach bottom by 19th June. I wonder how many months before we learn if it is a success or "below expectations". They were terribly coy about the infill wells drilled at the end of last year: I couldn't work out if they returned the investment or not.
Good point, well made.
If NC wishes to obtain approval to allot shares, he should start buying some so he can have some influence on the outcome of any decision.
Https://polaris.brighterir.com/public/trinity_exploration/news/rns/story/xp865mr
Ab76
You should attach a share price chart to that hagiography, for maximum irony.
All the best
Ross
Over the past couple of years, following the unfortunate death of Bruce Dingwall in August 2021, the management of Trinity has changed significantly.
Nick Clayton has been Chairman for less than two years.
Kaat Van Hecke, with over 25 years’ experience of the oil and gas sector, has been a director for less than 18 months.
Derek Hudson, Shell’s former VP and Country Chairman for Trinidad and Tobago, has been a director for less than two years.
Jeremy Bridgalsingh, formerly finance director and then managing director, has been chief executive for less than two years. As FD and then MD (Mr Dingwall was executive chairman), he was credited with significantly reducing Trinity’s cost base.
Just below board level, Trinity has a new Finance Director, a new Chief Operations Officer and a new Executive Manager for development. Although the senior management of the surface team hasn’t changed (other than that it’s no longer supervised/supported by Mr Dingwall), a Technical Committee consisting of two directors (Mr Hudson and James Menzies, who is a successful geologist and chief executive) and three independent experts.
As a consequence of these management changes Trinity’s strategy has been revised and become more focused on a limited number of opportunities, allowing the return of capital to shareholders and hopefully removing the need to raise any in the short/medium term at least.
Drilling the nine Hummingbird deep wells appears to be a good decision. Obviously there’s only so much an investor can assess in reaching such an opinion, but clearly a great deal of work, overseen by a variety of experts, has gone into looking for new sources of oil in Trinity’s existing licences - work that’s taken over two years. The economics look good ($4.5 million to drill a deep well, with payback in less than a year if successful). The risk looks good too (not only are there nine wells, but each well is targeting several layers). Success will result in a significant increase in both production and reserves. It seems obviously a better strategy than drilling lots of little wells that, whilst increasing production by perhaps 50bopd per well, probably wouldn’t result in any increase in reserves and would have a longer payback period. Moreover, it’s a strategy that hasn’t come anywhere near failing. Indeed, quite the opposite: although the well is taking three weeks longer than envisaged to drill, it’s on budget, issues with well stability have been overcome and it’s already encountered more oil than anticipated higher up (which will provide a consolation price if necessary).
Finding an affordable way to develop Galeota is also a sensible strategy. Building a $200 million platform wasn’t appealing and so they’re looking at cost effective alternatives, which is exactly what investors would want their directors to do. And Buenos Ayres is an amazing licence win, one that relies upon two years of seismic analysis to
Ab76
If lower level oil is not found, that will be a massive blow. How long would Jacobin have to produce from the shallower levels to pay back its cost? In fact, could it ever? If no lower level oil is found - or even if just no commercial lower level oil is found - will you be saying “Bring Me the Head of James Menzies”? Maybe you should be. Maybe it will finally be time to use your substantial TRIN shareholding to drive management changes.
All the best
Ross
James Menzies said the well would find oil as it went through Forest/Upper Cruise as that’s where Trinity’s wells primarily produce from at the moment. The real price remains the lower levels, but it’s encouraging that even if they don’t find lower level oil they may well be able to boost production/recoup the cost from the higher level oil which has “exceeded pre-drill estimates”.
Exciting news.
Looking forward to the deeper drilling results now.
Cheers
63%. Let’s assume that when James Menzies arguably put his job on the line with that figure and his appraisal comment, he had a sound basis for doing so (such as data from older analogous wells). But what does a CoS figure actually mean? Is there a 63% chance here of a transformational, share price popping result from Jacobin? No. Any CoS figure covers a range of outcomes, from marginal commerciality to the kind of best case figures that lead retail punters astray. What is the percentage chance of a transformational, share price popping result from Jacobin? Much lower. Even James Menzies, if pressed, would have to admit that.
Ab76
Perhaps Cenkos did not miss anything but simply felt that 33% was realistic. They have of late been injecting such doses of reality, another example being that revised 2023 production estimate.
So James Menzies has indeed made a bold statement about Jacobin. I would point out that TRIN are in share promotion mode here and that you might therefore want to take that figure of 63% with a pinch of salt.
TRIN have form for making aspirations sound a bit like forecasts - stay cynical.
Ross
It’s a waste of time discussing things with you rossannan. When you’re not insulting people you insist on commenting on things repeatedly without bothering to look at the materials.
If you watch the presentation, which is available free of charge on InvestorMeetingCompany’s website, you’ll hear James Menzies say that Jacobin “is more an appraisal than exploration” at about 26:34 in. That’s just after he said there’s a very good chance of finding hydrocarbons and explained that a 63% chance of success is unusually high.
If you read a Cenkos report they don’t blindly accept Trinity’s figures. For example, the March 30th 2023 report acknowledges that Trinity assess the chance of success of a typical deep well at 55%, but they state that’ve given Jacobin a 33% change of success. No explanation is given as to where that figure comes from and they don’t explain that oil is being explored for in the three different levels, which raises the possibility that they simply took the chance of success of one of the levels and failed to work out the probability of a success over three. From the beginning Trinity have said 55% is the typical chance and Mr Menzies has stated that Jacobin looks like the best which plausibly explains why the chance is a bit higher.
Ab76
So where do you think Cenkos got that from?
Did JM actually say “like an appraisal instead of exploratory”?
ATB
Ross
When did Trinity say that the deep wells only have a 33% prospect of success? As far as I’m aware that was an opinion expressed by Cenkos.
In the May 2022, when Trinity first provided details of their deep well programme, they said that the deep wells identified typically had a 55% chance of finding 1 to 5 mmbls in place. Yesterday James Menzies told us that Hummingbird looks like the best of the nine Hummingbird prospects, which presumably accounts for the slightly higher than typical chance. He’s clearly optimistic - he made the point yesterday that a 50% chance is usually as good as it gets and to have a 63% chance almost makes the drill like an appraisal instead of exploratory, but he also know that nothing is certain (he said yesterday that “seismic can be deceptive”). He’s also very optimistic about Buenos Ayres and explained in great deal why (it’s largely unexplored as it had been considered non-prolific due to the basin shape, but Trinity have discovered through careful analysis of the seismic various fault lines that mirror the prolific production areas of their other licence and which they hope will also be very prolific).
As I wrote before, investors and potential investors will struggle to find another company Trinity’s size that is taking a more rigorous approach to drilling. It’s a nuisance that not much has happened over the past couple of years whilst they been carefully analysing all of the data they have, but hopefully it will be worth it. We’re about to start finding out.
Ab76
A genuine 63% CoS below 5500 feet probably translates into a near 100% chance of finding oil below 5500 feet. So why even contemplate the possibility of a duster?
Why does the Jacobin CoS keep changing? We have had 50% then 33% and we now have 63%.
Do you know enough about the migration of oil from source rock to reservoir rock to say that “the presence or absence of oil in any one reservoir is unlikely to meaningfully increase or decrease the prospect of it being in another”?
ATB
Ross
The Jacobin well is drilling to a total depth of 9,800 feet and is the deepest well drilled in the area for over a decade.
For the first 5,500 feet or so it will go through some of the most prolific oil producing land in Trinidad. As a consequence, James Menzies was able to say yesterday that the well will find oil, but Trinity isn’t targeting oil in the first 5,500 feet (they’re already producing oil at that level from other wells).
Rather they’re targeting three deeper levels. The first target reservoir, T6, is just over 6,500 feet deep. The second target, T7, is almost 7,500 feet deep. The third, T8, is about 9,000 feet deep.
In other words, there’s almost a quarter of a mile in distance between the existing producing oil reservoir and T6, and then almost another quarter of a mile to T7, and then another quarter of a mile to T8. These reservoirs have developed and, hopefully, filled with oil over millions of years. The presence or absence of oil in any one reservoir is unlikely to meaningfully increase or decrease the prospect of it being in another. Were it otherwise the chance of success in T6 would likely be much higher given that it sits under a known oil reservoir.
Rather Trinity has assessed and published the chances of success of finding oil at each of the three levels they’re exploring, and then using quite proper probability calculations provided an estimate of the chances of at least one of the three reservoirs containing oil. Those assertions have been backed up by the competent person and are in turn backed up by a Technical Committee that consists of Mr Menzies (a geologist, non-executive director of Trinity, and the founder/former CEO of Salamander Energy), Derek Hudson (a geologist, non-executive director of Trinity, and Shell’s former Vice President and Country Chairman of it’s operations in Trinidad) and “three other independent experts who bring complementary and relevant expertise” to the deliberations (see page 36 of https://trinityexploration.com/wp-content/uploads/2023/06/Trinity-EP-2022-Annual-Report.pdf). It’s unlikely that any other smallish energy company has more rigorous oversight of its drilling plans and it’s an approach that has led to considerable refinement of Trinity’s drilling plans.
It’s also worth remembering that Jacobin is about more than finding oil on this occasion. It’s the first of nine deep wells and, if no oil is found, it will likely provide useful information that will assist the rest of the campaign.
In any event, it’s not long to wait now until we find out what Jacobin has discovered - the report is due by about mid-July (although Mr Menzies cautioned yesterday that “God laughs at oil drillers timescales”).
I remember that from The Curious Incident of the Dog in the Night-Time. I guess this is more observational than mathematical - the CoS for exploratory drilling, stacked targets or not, is typically no more than 30% or 1 in 3. It is like they are telling us we are getting three exploratory drills for the price of one. I just won’t buy that until an independent geologist, who can give us chapter and verse on oil migration, for example, tells us otherwise, namely that they can multiply up the probabilities like that.
Could the Monty Hall problem apply to this?
Ab76
That does not answer my question, which is whether it is correct to say that what is actually found at one level in a given well makes NO difference to the CoS at any other level in that particular well. Unless that statement is correct, TRIN would appear to me to be using misleading methodology.
As I said before, if there is a geologist out there your answer to my question would be most welcome.
ATB
Ross
The probability of Trinity finding oil in at least one of the three levels is almost 63%. There are two ways of working out the probability of at least one of three events occurring.
First the manual method, which involves the following steps:
1. As a fraction deduct the chance of each event occurring from 1, which in this case gives us 0.66 (K6 has a 1 in 3 chance, 1 minus 0.33 = 0.66), 0.75 (K7 has a 1 in 4 chance, 1 minus 0.25 = 0.75) and 0.75 (K8 also has a 1 in 4 chance, 1 minus 0.25 = 0.75).
2. Multiply the deductions, which in this case gives us 0.3712.
3. Deduct the multiplied amount from 1, which in this case gives us 0.6287.
4. Convert the above into a percentage, which in this case gives us 62.87%.
Second the automatic method, which involves using this website: https://www.omnicalculator.com/statistics/probability-three-events
Using 33.33333%, 25% and 25% as the inputs, that website says that the prospect of at least one event with those prospects occurring is 62.5% (unfortunately the prospect of all three occurring is just 2%).