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(Sharecast News) - Trinidad and Tobago-focussed Trinity Exploration updated the market on its third quarter on Monday, reporting that preparations for production testing had been underway after the Jacobin oil discovery in the Palo Seco area of onshore Trinidad in August.
The AIM-traded firm said the well was cased to 10,021 feet.
A workover rig, Rigtech Rig 9, was deployed to the well site, and on 30 September, the lower-most of three oil-bearing zones was perforated.
The well exhibited an encouraging flow rate during the initial clean-up phase but encountered a temporary sand plug.
Despite that, high-quality light oil was recovered from the lower reservoir, with both the reservoir and wellhead pressures, along with the achieved flow rate, described as promising.
Efforts were ongoing to bring the deep and highly pressurised reservoir into production.
The well flowed a total of 113 barrels - 34 barrels of oil and 79 barrels of completion fluid - over seven hours before the sand plug formed, making it too early to determine sustainable production flow rates from the zone.
Trinity said the post-perforation closed-in wellhead pressure matched expectations based on a reservoir pressure of 7500psi.
To address the sand plug issue, Trinity said it was deploying a coiled-tubing unit to clean out the well and facilitate production optimisation, with further flow test data to be provided when available.
The oil produced from the discovery was sold to Heritage Petroleum Company under the current sales arrangement within the PS4 Lease Operating Agreement.
Due to the extended drilling time and expanded testing programme encompassing three zones, the total cost for drilling, completion, and testing in Jacobin was anticipated to exceed previous capital expenditure estimates.
A final cost update would be provided once details were finalised.
On the operational front, Trinity reported an average third-quarter sales volume of 2,705 barrels of oil per day (bopd) - slightly lower than the prior quarter's 2,824 daily barrels.
The decrease was put down to extended downtime on a key well in the Trintes field, which had since resumed production.
As a result, the production sales guidance for the full year was updated to 2,800 to 2,900 barrels per day, down from the previous range of 2,800 to 3,100 bopd.
Regarding financial performance, Trinity reported an average realised oil price of $72.5 per barrel in the third quarter, compared to $63.7 per barrel in the second quarter and $84.3 per barrel a year earlier.
EBITDA, pre-hedging, stood at $4.6m for the quarter - slightly up from the second quarter but lower than the 2022 third-quarter figures.
The operating break-even price per barrel was $42.27, reflecting mainly lower sales volumes.
Trinity's cash balance totalled $8.4m as of 30 September, compared to $11.3m at the end of June and $16.5m at the same time in 2022.
Borrowings remained steady at $2m.
Looking ahead, Trinity said it had undertaken a study with Petrofac to explore development concepts for the Galeota Block.
It said the study aimed to identify lower capital intensity projects and reduce upfront capital requirements for exploiting the significant reserves and resources in Galeota, with ongoing scoping economic analyses of recommended options.
Additionally, reforms to the supplemental petroleum tax (SPT) regime in Trinidad and Tobago could enhance the economic value of Trinity's East Coast and West Coast shallow marine licenses, pending further legislative developments.
"During the period, we made significant progress at our important Jacobin well, perforating the lower-most of three oil-bearing zones on 30 September," said chief executive officer Jeremy Bridglalsingh.
"We had encouraging flow during the initial clean-up phase but, in doing so, produced sand which has temporarily plugged the well.
"Work to resolve that issue is in train; the oil quality and pressure in the well are very positive."
Bridglalsingh said the results of the Galeota concept screening study served to help validate the firm's approach to reducing the capital intensity of projects that would help to improve economics, which the recently proposed changes to SPT would further improve.
"I look forward to providing a further update on our progress on Jacobin, which is of paramount importance to our shareholders, as we progress our well testing programme."
At 1245 BST, Trinity Exploration & Production shares were down 9.49% at 61.09p.
Reporting by Josh White for Sharecast.com.
