malcys take24 Sep 2018 12:45
Trinity Exploration & Production
A ‘transformational’ interim from Trinity who reported production of 2,771 b/d in the period, up 16% and revenue growth up 49% at $30.1m. With a 58% increase in EBITDA to $9.3m or $18.6 per barrel, operating break even was $28.50 pb. The cash position is now very healthy, the pro-forma number post the raise is now $19m after the $20m raise after the period end. Production guidance for this year is for an average of 2,800-3,000 b/d and although there is no official guidance for next year I am working on a figure of c. +10%. The medium term target is for 7,500 b/d which would indicate something from the East Coast which is discussed below.
Trinity got to work with the drill bit very quickly and drilled 2 new wells in the period, 7 recompletions and a continuous campaign of 62 workovers and reactivations. Since then they have accelerated their onshore drilling programme with a planned 8-10 wells p.a. which means that the onshore programme will be self funded by 2020 and with continued double digit growth. The East Coast Asset Development continues and the company are reworking the TGAL FDP which offers the chance of a ‘step-change’ in production in the medium term.
Trinity are in a very strong position to outperform within the sector, they offer a stable and well funded platform for growth with ‘significant reserves and resources’ able to provide a meaningful period of growth in the short, medium and long term. The company have worked as hard as anyone I know in the industry to reduce costs over recent years and have an underlying very low, fixed cost base which contributes to those high margins. Finally, It is worth noting that the management have 24% of the equity in the company which means that they are more than usually aligned with the other shareholders in Trinity.
https://www.malcysblog.com/2018/09/oil-price-trinity-exploration-production-president-energy-tullow-oil-and-finally/
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