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(Alliance News) - Trinity Exploration & Production PLC said on Thursday that it is well-positioned for its next growth phase despite a slight decline in profit last year, and announced a new capital allocation policy including "modest but sustainable" dividends.
Trinity is a Trinidad & Tobago-focused independent exploration and production company, with assets onshore and offshore on both the East and West Coasts.
The company said its pretax profit was down 18% to USD2.5 million in 2022 from USD3.0 million the prior year.
Revenue increased by 39% over the same period to USD92.2 million from USD66.3 million. Net sales decreased by 1.0% to 2,975 barrels of oil per day from 3,006 barrels per day, however the average price of Trinity's oil increased 41% to USD84.9 from USD60.4 per barrel received.
Meanwhile, Trinity said total operating expenses increased 29% to USD73.3 million. These included a 52% increase in royalties to USD30.1 million and an eightfold rise in derivative expenses to USD10.4 million. Production costs also rose 9.2% to USD19.2 million.
Trinity also is committing to a new capital allocation policy, under which it aims to distribute 15% of operating cash flow to shareholders for each calendar year when its realised oil price is over USD50 per barrel, and at least 20% when the price goes above USD80 per barrel.
Furthermore Trinity expects to include "a modest but sustainable dividend" and to declare a total 2023 dividend of 1.5p per share. It intends to declare its maiden interim dividend in the third quarter and a final dividend for the current year in the second quarter of 2024.
Moreover there may be scope for further distributions through special dividends or share buybacks, it said.
Going forward, Trinity said its "dynamic strategy" for future growth will be supported by its strong balance sheet and reliable cash flow. It plans to focus on "maximising value" from existing assets and through new acquisitions and partnerships, and is seeking opportunities which can "increase scale and optimise returns" while still mitigating risks.
Shares in Trinity were up 5.8% at 81.44p on Thursday in London.
"During 2022 Trinity initiated an ambitious growth programme, seeking to develop a series of catalysts to drive shareholder value that we are now starting to execute in 2023," said Chief Executive Officer Jeremy Bridglalsingh.
"We have actioned three key growth initiatives which we believe have the potential to deliver meaningful value for shareholders.
"Our core business has continued to perform consistently, forming the basis upon which the capital allocation policy has been designed...2022 was a significant year for Trinity and 2023 has begun to bear the fruits of this work. I believe we have the right focus to deliver further progress," he added.
By Emma Curzon, Alliance News reporter
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