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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
Thanks smet. I was wondering why that also went up 8 percent today.
San Leon Energy (SLE)
Trin was tipped on yesterday's Investor Chronicles by Simon Thompson, expect some positive movement going forward. As I don't have a subscription, anyone care to post the full article here Also SImon mentions "Two small-cap oil producers offer investors a compelling investment opportunity". Anyone know what the other tip was? Cheers.
"We have a clearly defined strategy in place, focused on increasing our cash generation to enable us to fund future growth initiatives and deliver cash returns to shareholders."
Could a small dividend finally surface in a year or two? One can dream
TRIN have been carefully vague.
I am underwhelmed by that update but it is not true to say that if the drilling fails the cash is gone, not when four of the wells are low risk/conventional.
Agree and if the drilling fails the cash is gone.
Nothing this year.
Positive news
Yes, all will be forgiven if they show real determination in pressing ahead with stuff they can actually control.
rossannan agreed about the fiscal Regime .
"We remain optimistic about the prospects for imminent, and necessary, reform of T&T's fiscal regime, specifically SPT which significantly discourages investment and stifles activity in the sector. This is, in our view, essential if Trinidad is to attract the necessary investment to maximise the value of its world class hydrocarbon deposits within the Net Zero time frame. We continue to work with the MEEI and wider Government with the goal of delivering a positive outcome. "
But with Trinity being one of T&T's top five crude oil producers you would hope they could finally start to put some real pressure on the government.
My comments are mainly about how long this has taken to get to this stage.
"We believe that this is an inflection point for the Company with the imminent resumption of drilling" Let us hope this is true.
comeonvog
That seems unduly harsh. Is the toxic fiscal regime not the main problem?
As i said , BOD comatized , inept , out of depth. life style management with no real drive.
The Q2 update in the next week or so will be telling.
No one really knows. All you can do is make an educated guess. While I do own these, it is just a very small stake which I will increase on drops providing I see it as a good return in the future.
Does a drop not feel like the most likely outcome in the short term?