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I like the look of this deal - TXP has a huge foothold in Trinidad off the back of the deal and appears grossly undervalued IMO!
I wonder if there is any RNS that TXP could release to which the market doesn't respond negatively? Bloody ridiculous.
Ol well....I'm sure PB has a masterplan somewhere in his locker.
I own 2.6% of Trinity and will be taking a 50% loss on my investment by accepting this offer (which at least is better than the 75% loss I’m currently sitting on). However, it seems to me that the expanded Touchstone should quickly see its share price double: it can use the tax losses, there’s plenty of room for cost cutting (just getting rid of Trinity’s senior management will save over $1 million per year; the CE alone has been picking up $500,000 or so), and the increased cash flow will drive investment.
Add in $16m EBITDA and 13mbo 2P to the mix, coupled with highlandmatts other observations.
It does appear to be a good deal, even with the premium they’ve picked the assets up cheaply and TRIN will be in favour of this due to synergies, efficiencies of scale via cost reductions at an operational level and a huge upside potential via TXPs existing assets.
When you're buying something at a 72 premium while your own SP is 50% underrated and you're paying with shares... who's the real winner?
TRIN produces 2,600-2,700 bopd, its Net Cash position is $9.7m when taking in to account the $5.1m VAT receipts due.
It's share price is bargain basement due to the poor performance of management, it should be many multiples higher. Obviously once acquired you remove that downside of poor management. There's then the sizeable tax losses Ab mentions and the shallow water Galeota development, which is in middle of a revised concept study and was working to FID in 2024. The original concept was for "Echo phase 1" to produce 4,000bopd and Foxtrot/Golf Phase 2 to produce combined 7,000bopd.
Combined 2P Reserves and 2C Resources end of 2023 at 51.58mmstb.
As much of a kick in the teeth this notional price is to TRIN holders, based on its current share price it's very good deal for both parties.
Trinity is spending millions per year on five non-executive directors and two director executives (https://trinityexploration.com/about-us/board-of-directors/) and a chief operating officer and five other senior managers (https://trinityexploration.com/about-us/executive-management-team/). That cost will be quickly cut, adding to the bottom line.
This appears a good deal for both parties and then savings on the Senior Management Team. This will create some significant synergies here, so should be seen very favourably.
Https://www.lse.co.uk/rns/q1-2024-operational-update-1l0aa1srgo2so7m.html
TRIN producing 2,500 bopd, $8.6m cash, $4m overdraft, $5m VAT reclaim. Not terrible for $26m.
Trinity’s biggest asset is $225 million of tax losses.
They exempt the holder from paying 50% profit tax on 75c of every $1 of profit.
Touchstone is getting a bargain on the basis of just the tax losses. The cash, cash generating assets and reserves all come for free.
Firstly at 61.9p I don’t think that’s too rich. Pheeew!
But if I wanted trinity I’d have bought their stock!
It does though show our robust revs will amortise the acquisition comfortably.
Other than that I have to look through here and TRIN RNS’s later in more detail.
Usual caveats
Trek
Touchstone Explrtn. - RECOMMENDED ALL SHARE OFFER
worth around 61.9p share
Well that's a joker.
Level 2 now 5 v 1 so should move back very shortly
I know, annoyingly I see the 100k sell, but maybe something will appear later .... anyway can't help the fact we about to rerate. markets are normally 6 months ahead and from experience due to the PI's AIM stock as seem to be about 3 months ahead of news so with that in mind I would start to expect some positioning getting ahead of the two new pipes (income streams) getting hooked up :) they are due Q3 so lets say mid that gives us a few weeks before people really start getting to grips with what we have and how cheap we are ..... we're producing !!!!
Also Q1 figures due in 2 weeks :)
LOL, somebody got fecked by a MM in Canada. 0.67 CAD = 39p. Or it's just MM's trying to rattle people and accumulating cheap stock before the ER May 14th.
42.22 now being paid.... just SCAP to clear at 42.5p with 10k .. .so expect one or two to move up on the bid shortly as well as the offer.
As predicted we're just ticked up ....only 1 MM left now on the 42.5 so grab them while you can !
Yes I agree TXP needs alot more of this to light up the board
Now 4 v 1 literally the last 42p stock left....who wants them ?
Agree 1000% and not overly excited just looking to promote the opportunity and the business will take care of the rest :)
Can't get excited about these small movements North we should be double.
If you're looking to get some stock, this is probably the best time as pretty much the next buy or two will move the SP and you'll be level and just about in profit straight away !
Now 3 v 1 ... last 42p stock left and probably for ever !!
Level 2 now 2 v 1 ..... one more buy and we'll tick up again :)