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Ab76
“If you don’t think a company is any good, what basis do you have to believe that others will invest and raise the share price.”
What happens on AIM every day? In particular the history of TRIN and other AIM oilers?
SuperRoty
“oil has flowed”
Sorry to fact check you, but where did you see that confirmed?
…companies you don’t believe in. If you don’t think a company is any good, what basis do you have to believe that others will invest and raise the share price.
Following the $2.1 million share buy back earlier this year, Trinity’s Chairman and Chief Executive announced on June 1st 2023, in the annual report, that:
“Going forward, the Board intends to aim to distribute 15% of operating cash flow to shareholders, for each calendar year when the realised oil price is USD 80/bbl and below, and at least 20% of operating cash flow for each calendar year when the realised price is above USD 80/bbl. This is expected to include a total dividend (split 1/3 interim, 2/3 final) of 1.5p per share, provided the realised price is at least USD 50/bbl. It is expected that the maiden interim dividend will be declared following publication of the 2023 interim results, in Q3 2023, followed by a final dividend being declared following publication of the 2023 preliminary results in Q2 2024.” (See page 4 of https://trinityexploration.com/wp-content/uploads/2023/06/Trinity-EP-2022-Annual-Report.pdf).
Nothing’s happened since June 1st 2023 to suggest that the interim dividend of 0.5p won’t announced in the forthcoming interim results (they’re due before the end of the month).
Cenkos, Trinity’s broker, reckons that Trinity’s existing wells experience natural decline rates of 10% per annum. However, “net sales for 2022 were 2,975 bopd (2021: 3,006 bopd). Trinity managed to substantially mitigate natural production decline through a programme including; 3 new wells, 17 RCPs, 120 Workovers, swabbing across its asset base, including the recently acquired PS-4, and improved production monitoring using automation and revised completion strategies” (page 4 of the Annual Report). Those mitigation measures continue into 2023 and in the presentation that accompanied the results Trinity’s management set out their plans to increase production, excluding Galeota, to 5,000bopd by 2026 (see page 18 of https://trinityexploration.com/wp-content/uploads/2023/06/TRIN-Investor-Presentation-June-2023-vF-2023-06-13.pdf).
Trinity’s management have repeatedly provided optimistic information about Jacobin. During the May 2022 presentation (at about 15:00 of https://www.investormeetcompany.com/investor/meeting/results-and-company-update-8 ), the CE said, “if the well is successful you can see what that looks like in a success case where it sort of takes production from 1 times to 1.3/1.4 times existing production [of around 3,000bopd]”. 1.3 to 1.4 times existing production would result in Jacobin production of between 900 to 1,200bopd. During the June 14th 2023 presentation he stated that Jacobin has “the potential in a success case to be a very valuable project for us because the payback for Jacobin success is one year” and was supported by the Finance Director. Payback within a year likely means production of at least 704bopd.
I’m optimistic these things will happen, which is why I continue to hold my shares. If you’re not, don’t buy and if you hold sell. Don’t invest or remain invested in
Yes old tired oilfields, but all being well there will be a significant uplift for the new discovery. The pressure is very high and oil has flowed. This well will be the springboard to open up the field and unlike other companies I am not expecting a fundraise to develop it.
Ab76
“Trinity have maintained production at around 3,000bopd for years, despite normal depletion rates of 10%.”
Yes, but (as you know from their recent presentation) they have admitted that they will not be able to maintain it in future.
Trinity have maintained production at around 3,000bopd for years, despite normal depletion rates of 10%.
They have low costs, which have only recently crept above $30 per barrel due to the significant inflation brought about by Russia’s invasion of Ukrainian.
They’ve benefitted from significant fiscal reform in Trinidad over the past couple of years.
Last year they generated operating profits of just over 20% of turnover ($19 million - unfortunately there was then a $10.4 million deduction for hedge losses as a consequence of the oil price spike, but fortunately there’s no hedging for 2023).
Lots of bad feeling here and rightfully so. Its a struggle to maintain the current level of bopd and that only just covers costs. However, if the last RNS is not misleading and the well flows big, its a game changer and TRIN is materially undervalued. I am cautiously adding at this level and eagerly await the flow result which are due to to be tested this month.
Yes, we all hope it will be great with Jacobin, like many previous schemes. However, we as shareholders have been losing value for years. The management don't share that pain - they always gain from each incentive scheme. I have been holding here for more than 6 years so I have seen it all before. Trinity just hasn't delivered. Maybe this year they will give us a little titbit of a dividend!
The incentives were set by Trinity’s remuneration committee, which until recently and at the time these awards were issued included Angus Winther and David Segel. Those two own 18.6% of Trinity. You can be confident that they were planning for company growth and shareholder returns, not intending to reward failure. In any event, these are exciting times as we await the next Jacobin update and find out how much it will increase production by.
PipeDragger- Don't understand what you are talking about. Do you think the pressure test results is not going to be good?
The new definition of success is TRIN being no worse than its peers. I preferred it when they were focussed on absolute shareholder return, growing production etc. Snouts in the trough all the way.
I use IG as my trading / investment platform. However every morning i notice that TRIN is marked with an X meaning you can't trade any shares with it. This often happens when a share goes berserk in either direction. I don't know the dark arts of the MMs but every morning there seems to be a period when something is happening with the TRIN share market. Be interested to know if anybody as noticed something similar or possible reasons whey this is happening.
Good luck all.
SuperRoty
“a big discounted placement to flow test and bring the well into production”
Not sure that even the most sceptical folk on here think that, and there are few on here more sceptical than me. Folk sell for a rainbow coalition of reasons.
A lot selling out expecting a big discounted placement to flow test and bring the well into production. They need to do a bit more research as TRIN is already producing nearly 3000 bopd and have enough cash in the bank. I am adding.
Divi on the way. Production about to increase significantly. Why are there so many sellers at this price??? Price was 170 on no news except for imminent political reform on taxes to increase margin. This has to be a raving guy as suggested by the Investors chronicle a while ago. Held these shares for 7 years and always said I carried too many of them for my portfolio but right now I don’t think I have! As you can tell I am excited for the first time in a while
As I noted before, nothing really counts until the well has been flowed and shut-in pressure checked.
PipeDragger
So what? TXP’s last Royston production test “produced light crude oil, with wellhead shut in pressure up to 2,450 pounds per square inch. Production flowed to the surface at non-commercial rates. This section of the formation appears to be a low permeability reservoir, and further testing will not be conducted.”
The Royston wellhead figure could presumably have been 3,500psi with the same result. And Jacobin’s production tests could presumably still be as disappointing as Royston’s have been thus far.
Https://masterinvestor.co.uk/equities/small-cap-catch-up-pawnbrokers-longboats-and-the-trinity/
Jon Cooper looks like a good addition to the board. He replaces Angus Winther, who resigned at the AGM and who also had a financial background.
One of the differences between Trinity and many other AIM companies is the depth of its board. We’re now back to having four non-executive directors and a non-executive chairman. They all have extensive oil and gas management experience (James Menzies and Mr Cooper are chief executives, Derek Hudson was a Shell Vice President and Country Chairman for Trinidad and Tobago, and Kaat Van Hecke was an interim chief executive for 9 months as Nostrum), and two are also geologists (Mr Menzies and Mr Hudson).
7,500 psi at 10,000ft depth, I work that out at roughly 3,500 psi at surface. That is very strong indeed. Won't need any pump behind that. I look forward to the well test results.
Very promising appointments confirmed today. This discovery like I said the other day for Trinity is very significant indeed and I stand by my prediction that this has short term £3-£5 a share written all over it...
Here are some of the local reports on Trinity’s “very significant and material achievement” of discovering oil at Jacobin, in both the primary targets and the secondary target (“adding to the commercial attractiveness of the well”), that validates the “geological model and are within pre-drill range for a commercial discovery”:
https://trinidadexpress.com/business/local/trinity-discovers-virgin-oil-onshore-trinidad/article_6fc20406-358a-11ee-8fca-871b7bc91da6.html
https://guardian.co.tt/business/trinity-discovers-virgin-oil-in-new-well-6.2.1770855.3d6f141de1
https://newsday.co.tt/2023/08/07/trinity-confirms-palo-seco-onshore-oil-find/
https://tt.loopnews.com/content/trinitys-jacobin-1-oil-discovery-confirmed
Trinity have been confident about Jacobin for some time. They’ve made that confidence clear, including by going as far as to describe it as an appraisal well rather than an exploration well (see the box on the right hand side of page 12 of https://trinityexploration.com/wp-content/uploads/2023/06/Investor-Technical-Presentation-June-2023-Hummingbird-Buenos-Ayres-vF.pdf) and by stating that the 63% chance of success was about as good as it gets in the oil industry. Jacobin was never a speculative drill, but rather the result of years of careful analysis and planning supervised in part by independent experts.
Trinity’s confidence in Jacobin clearly remains. There’s little caution in describing the discovery as “very significant and material”. Furthermore, it’s notable that the purpose of the heavy-duty workover rig, that will soon replace the drilling rig, is “to run the completion, perforate and tie the well into production facilities.” Why would they want to tie the well into production facilities other than because they intend to produce from it?
Obviously we’ll have to wait for the production figures, but part of the excitement of Jacobin’s primary targets is the high “virgin pressures” as no production has previously been taken from these pools.
Of course, the bigger prize remains that Jacobin unlocks the other eight deep prospects and Buenos Ayers. More details will follow in September, but after a very slow start to drilling (not much has happened over the past three years whilst the careful analysis has been taking place) these are now exciting times.
Looks like the share price is moving sideway or down a bit until flow test results?
I agree with Rossannan. Wells have to be flow tested then shut-in to see if the pressure comes back. If it flows well and then the shut-in pressure stays super high then they have a great find. If the shut-in pressure doesn't come back then they have a little pocket. I think they know the geology well enough that it is highly likely to be a good find. Just have to wait another month or so for the flow data