RE: Jacobin drilling26 Jun 2023 15:20
Over the past couple of years, following the unfortunate death of Bruce Dingwall in August 2021, the management of Trinity has changed significantly.
Nick Clayton has been Chairman for less than two years.
Kaat Van Hecke, with over 25 years’ experience of the oil and gas sector, has been a director for less than 18 months.
Derek Hudson, Shell’s former VP and Country Chairman for Trinidad and Tobago, has been a director for less than two years.
Jeremy Bridgalsingh, formerly finance director and then managing director, has been chief executive for less than two years. As FD and then MD (Mr Dingwall was executive chairman), he was credited with significantly reducing Trinity’s cost base.
Just below board level, Trinity has a new Finance Director, a new Chief Operations Officer and a new Executive Manager for development. Although the senior management of the surface team hasn’t changed (other than that it’s no longer supervised/supported by Mr Dingwall), a Technical Committee consisting of two directors (Mr Hudson and James Menzies, who is a successful geologist and chief executive) and three independent experts.
As a consequence of these management changes Trinity’s strategy has been revised and become more focused on a limited number of opportunities, allowing the return of capital to shareholders and hopefully removing the need to raise any in the short/medium term at least.
Drilling the nine Hummingbird deep wells appears to be a good decision. Obviously there’s only so much an investor can assess in reaching such an opinion, but clearly a great deal of work, overseen by a variety of experts, has gone into looking for new sources of oil in Trinity’s existing licences - work that’s taken over two years. The economics look good ($4.5 million to drill a deep well, with payback in less than a year if successful). The risk looks good too (not only are there nine wells, but each well is targeting several layers). Success will result in a significant increase in both production and reserves. It seems obviously a better strategy than drilling lots of little wells that, whilst increasing production by perhaps 50bopd per well, probably wouldn’t result in any increase in reserves and would have a longer payback period. Moreover, it’s a strategy that hasn’t come anywhere near failing. Indeed, quite the opposite: although the well is taking three weeks longer than envisaged to drill, it’s on budget, issues with well stability have been overcome and it’s already encountered more oil than anticipated higher up (which will provide a consolation price if necessary).
Finding an affordable way to develop Galeota is also a sensible strategy. Building a $200 million platform wasn’t appealing and so they’re looking at cost effective alternatives, which is exactly what investors would want their directors to do. And Buenos Ayres is an amazing licence win, one that relies upon two years of seismic analysis to
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