Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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“One of the lowest rated small-cap oil producers on London’s junior market is ramping up production, unwinding hedging arrangements and plans to return capital to shareholders.”
Simon Thompson in the IC on Trinity.
https://www.investorschronicle.co.uk/ideas/2022/09/21/targeting-production-growth-and-cash-returns/
This team just seems happy taking their wages and maintains the operation. Disappointing. Lots they could be doing.
I am beginning to wonder how much they can control. If Monday’s Budget doesn’t see the current temporary $75 onshore SPT threshold made permanent, TRIN really won’t have much going for it.
Ross, SPT is not helping (but that is not in TRIN's direct control). On the things they can control I think we are seeing some improvements.
Is it that positive? The badly judged hedges that are part of the problem are at least are expiring, but there is no sign that the other part of the problem, SPT, is going away anytime soon. I am not expecting much from the Budget on Monday. Amazing lack of interest/volume in TRIN. Investors have watched the potential growth catalysts disappear one by one and have now largely given up.
This is really positive. Finally some value to shareholders pledged. And some consolidation with share but back. If they are excited then I am! Been a long time coming but think the investor chronicles tip may be coming good!
It seems from today's RNS that they have drilled. So more production within a year and a dividend too. Overall better outlook (a pleasant change)
Train is back to the buffers it seems. Exploration drilling programme started in June but we don't know if they have even spudded into ground yet. Another month before a routine production update.
Would be nice to know........
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Looks like the train is moving... last chance to get on.
A message from Trinidad and Tobago’s Energy Chamber ahead of the budget on September 2nd: https://energynow.tt/blog/reform-energy-tax-now-to-encourage-investment
"4 low angle wells will be producing before this year ends". They will need to drill a well every 6 weeks or so to have these 4-off producing by end of year. Drilling started in June so should we not expect some progress announcement?
Great to get Mark covering it & being positive as his analysis is top drawer and he is a hard man to please. I don't subscribe to stockopedia but hopefully he'll pick up on Trin on his SCL channel
Mark Simpson has covered resource companies in his latest article today and includes TRIN.
He concludes as follows;
Combined with the re-pricing of their hedges, this means that the 2023 estimates put them on a forward P/E of 3. This looks too cheap, particularly given that they have possible exploration targets in their portfolio as well. The mix of low-risk onshore production and exploration upside seems particularly attractive.
GLA
So is trin still a well run company with Bruce having passed away? Do you know what happened with all his shares? Looks like a good story but a bit of a dog of a stock the last couple of years…
Hedges r unwinding as 70 per cent of second-half output is exposed to the spot oil price, believe the hedging has held this back. As new drill's come on stream so share price movve higher, only concern if oil prices start too fall back
the price is flying right now... I think the paper version of IC is sold on Fridays which could explain the price rise, as new buyers load up while its dirt cheap. Or...maybe someone on the drill rig knows something....
Rosannan, looking forward the P/E ratio for 2023 is one thing but what about a forecast to 2024?
Cenkos predict that TRIN could double its production by 2024. Taking the current 2022 estimate (3,229 BOPD) and doubling that arrives at 6,454 BOPD). Assuming that production is 100% unhedged by then and assuming a conservative $95/barrel (you might disagree on this but it is the position of Goldmans and a few others that oil will probably exceed $100 a barrel in 2024) then assuming the same EBITDA margin as that forecast for FY2023 (i.e. 41%) then we see growth to $225m revenue and $92.4m EBITDA.
That would be a EV/EBITDA of just 0.46 in 2024 (based on today's stock price). The corresponding PE would be around 1.0 .
If you consider a PE of 5 to be attainable then you are looking at a 5 bagger. If you consider a PE of 11 (like Serica is today for example) then it's an 11 bagger from here. Just to be clear, the market would "forward price" so by Q1 or Q2 2023 we will know the results of the 6 wells programme and whether a doubling has happened. By that point we should see the market repricing TRIN i.e. 9-12 months from now.
GLA
“A P/E ratio of just 1.4 in 2023”
You will want to kick the tyres of that one!
The tip did cause a rally from 90p lows to current price 105p, I bought at 93p, so it has "shifted the needle" this time. Its true though, that his tips sometimes lead to a drop in the price, but I would say more often than not his tips benefit the share price. Of course, with O&G stocks which are inherently risky, and volatile, things can go wrong very easily. But I was disappointed I missed out on CHAR in its recent rally, though I did catch a multibagger on it the year before. And I made some decent profit from JOG around the same time, and more recently PMG. I''m not a long term investor, so I'm happy that the price has big swings up and down, that suits my style of trading as a swing trader.
Issuing a few large dividends would raise the dial.
Simon Thompson at IC has been recommending TRIN since at least 2018 as a BUY. Doesn't seem to shift the needle on the SP. The lack of drill bit action until now hasn't helped.
Thanks Bazzaman,
A P/E ratio of just 1.4 in 2023. This is definately looking like a multibagger from the current price.
The outlier is Trinity Exploration & Production (TRIN:94p), a £36.5mn market capitalisation oil and gas explorer and producer focused on Trinidad and Tobago, which has shed a quarter of its market value. The de-rating is wholly unjustified. Second-quarter results highlight a company that produced operating cash flow of $6.9mn (pre-tax and hedging) with operating break-even less than a third of the $96.80 per barrel average realised price on 3,093 barrels of oil daily production.
Hedges are unwinding as 70 per cent of second-half output is exposed to the spot oil price, while a low-risk onshore drilling programme offers attractive cash payback of 1.6 years (conventional infill well) to 1.3 years (horizontal well). It will be mainly funded by internal cash flow, so net cash of $15mn (33p a share) should be little changed by the year-end.
Rated on price/earnings (PE) ratios of 3.3 (2022) and 1.4 (2023), when output will be completely unhedged, the value on offer here is compelling.
GLA