Member Info for rossannan

jfk9

Totally agree. I would love to see an RNS about them starting to explore opportunities in other jurisdictions. It just feels like they are being mugged off by the T&T Government.

LuckCounts

Let’s see what the Q1 update says in a couple of weeks. The market will tell us whether TRIN is cheap.

As for the Newlands, you can track their investing history via RNSs and decide for yourself whether they are likely to be on to something. They may be in the long run, but for most retail investors it comes down to whether meaningful fiscal reform is tabled in the near future.

LuckCounts

Yes, but not that much higher income. TRIN is a solid enough business but it is hardly throwing off money, even though this is often suggested on TRIN BBs. As with any business right now, TRIN’s costs will be rising. The current fiscal regime only allows businesses like TRIN to do modestly better than running to stand still. This is why capital is flowing elsewhere. This is neither de-ramping nor misleading, it is simply the way things are. We are still waiting for the fiscal reform that could change all this and that was supposedly imminent. I’m afraid that what I have been saying about TRIN stacks up better than most of the over-optimistic BB commentary.

You know that I could give examples.

LuckCounts

I am not currently invested, I ditched my 10K recently for a small profit as I just don’t think meaningful SPT reform is imminent and I have therefore decided that I do not want to be holding when the April update comes out. Do you realise that the rate of SPT goes up with higher oil prices? If is not simply a flat rate that kicks in at $75 ($50 for offshore). Consider the possibility that your take on this may be wrong and that the market may have this one about right.

crl123

At least we are having a good day on the pharma front!

In the Budget delivered in late 2019, against the background of calls for root and branch SPT reform, all we got was an increase in the investment tax credit allowable against SPT from 20% to 25%. A very small positive. But at the same time we had a potentially negative change to capital allowances and a clear negative on loss relief with a reduction from 100% allowability to 75% allowability, basically a PPT tax rise by the back door.

Then we looked to the Budget to be delivered in late 2020, after further calls for root and branch SPT reform and rising hope that meaningful reform was really going to happen this time. But arguably the less reform-minded party got in and we ended up with reform that was limited in scope (small onshore) and duration (2 years).

At least, as the oil price slips back, the threat of higher rate SPT is receding.

Courtesy of Ab76 on ADVFN:

The IMF has released a new country report on Trinidad and Tobago (see https://www.imf.org/-/media/Files/Publications/CR/2022/English/1TTOEA2022001.ashx ). Paragraph 34 says “Moreover, comprehensive review of the oil and gas taxation regime will soon be conducted to ensure that the domestic hydrocarbon sector remains internationally competitive. The authorities reiterated their strong commitment to reducing emissions and developing solar energy, calling for a delicate balancing act and recognizing natural gas and ammonia as cleaner carburants.”

https://trinidadexpress.com/news/local/rowley-bullets-coming-at-us/article_ee8993a8-a274-11ec-a324-6372d800d9d7.html

RRA22

No specific reforms have been signalled though, just a general intention to reform, which is nothing new. TRIN needs to know about the specific reforms before it and its partners can make business decisions.

Stuart Young also said:

“I make it very clear that part of the job of the Minister of Energy and Energy Industries, under this PNM administration, and in particular of myself in the seat, is to fight for better returns for the people of Trinidad and Tobago whilst keeping us competitive.”

This is the key to the whole thing and highlights the extent to which they want to have their cake and eat it. There is no meaningful SPT reform which is not going to initially reduce the tax take for T&T. This is something that the PNM seem to struggle with. They seem to lack the political courage to lay out a program of reform that is an immediate win for the likes of TRIN and a (not that far) down the line win for T&T. Yet there is no other way to achieve better returns for the people of T&T.

If the PNM fail them again I hope that TRIN take their available capital where it will secure a better return for us shareholders.

LuckCounts

Not undervalued, arguably fairly valued on the basis of the current fiscal regime. The authorities have after all still not even deigned to signal any reforms. They have not even reassured us that the current temporary onshore SPT reforms won’t simply be allowed to lapse!

This is the problem with TRIN: the fiscal regime makes it neither as profitable nor as able to grow production as folk seem to think. And then of course there is the likelihood of that fiscal regime changing in a meaningful way - again not as high as folk seem to think. The market gets it though, sadly. Limited downside from here at least.

I wish it was that profitable!

If TRIN had a pound for every time one of its officers has said something like this, it could pay us a cracking dividend…

I think it all comes down to the regime pulling the trigger on meaningful tax reform. If that happens Galeota and everything else will fall into place and £3+ will very much be on the cards. But I think the market is sceptical about the regime actually following through on their business friendly rhetoric.

mhow

If it was a simple as that, would the share price not reflect this?

You can see how the SPT rate gets progressively higher set out on page 11 of this:

https://assets.ey.com/content/dam/ey-sites/ey-com/en_tt/article/ey-tt-budget-2021-20201005.pdf?download

In the meantime TRIN could be looking at the higher rate of SPT rate for next quarter if their average realised price exceeds $90 per barrel.

PD

Seems fair enough until they see the whites of the fiscal regime’s eyes.

Stockable

These are reserves with limited potential profitability under the current fiscal regime - we do not know if and when the fiscal regime is going to be significantly reformed, in fact the current onshore SPT reform measures could still be allowed to lapse, in theory.

At the same time inflation will be showing up in TRIN’s costs and eroding the benefit of higher WTI. The market gets all this, hence the very limited ST effect this morning.