Trinity Regulatory News (TRIN)

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Trinity Exploration & Production plc

("Trinity" or "the Group" or "the Company")

Onshore Licences renewed for 10 years

Enabling Trinity to plan for the long term and deliver higher cash flows

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, today confirms that its Onshore Lease Operatorship Agreements ("LOAs") have been renewed for a 10 year period effective as of 1 January 2021.

Renewal of LOAs

Trinity has renewed its LOAs for its WD-2, WD-5/6, WD-13 and WD-14 blocks for a 10 year period effective as of 1 January 2021. The LOAs were originally set to expire on 31 December 2020 and were previously extended to 31 May 2021 whilst terms were finalised with Heritage Petroleum Company Limited ("Heritage").

Key Changes

The key changes on the renewed licence terms are outlined below:

· Tenure: the 10 year licence period (versus five years previously) provides a longer investment horizon and therefore a greater ability to maximise returns

· Work obligations: appropriate work programmes have been set for each of the LOAs:

o Minimum of 15 new infill wells and 30 heavy workovers (these are inclusive of recompletions) to be completed over the licence period, obligations which Trinity is highly confident of exceeding

o New focus on Enhanced Oil Recovery ("EOR") projects/feasibility assessments marries well with Trinity's 3D data driven approach enabling the company to identify applicable areas of interest and reduce geological risk

· Royalties: The overriding royalty rates ("ORRs") have been favourably adjusted on a block-by-block basis to incentivise higher activity levels and maximise economic recoveries:

o For the current oil price band (US$50.01-70.00) the base ORR has been reduced by 15%

o The enhanced ORRs have been reduced by between 40-63% dependent on the oil price band

o New super-enhanced ORRs, 50% lower than the enhanced ORRs, apply across all oil price bands once the production thresholds are exceeded

o The thresholds up to which the base and enhanced ORRs apply decline at approximately 2% per annum across the licence term, further incentivising the licence operators to optimise the productivity of the fields for the long term

o The improved royalty structure rewards production increases from all activity types (not just drilling new infill wells as was previously the case)

o The aggregate increase in NAV across the onshore portfolio is estimated at between 4-14% dependent on where realised prices are between US$30-US$65/bbl

o At the current oil price, the accretion to the onshore portfolio NAV is estimated to be c.7%

Outlook

Finalising the 10 year LOA licence renewals, integrating the recently acquired 3D seismic data across Trinity's now larger contiguous acreage (following the recently announced acquisition of the PS-4 block, which remains subject to Heritage and regulatory approvals), the improved oil price outlook and the recently implemented SPT reform (with the onshore SPT trigger now at US$75/bbl) provides a much improved outlook for Trinity's onshore business.

The introduction of the super-enhanced ORR (which applies when the enhanced production threshold is exceeded), and simultaneous removal of the new well drilling incentive (under which reduced ORRs were only payable for up to two years on new wells), will encourage lease operators to look to sustain and grow base production by a variety of means (new drilling, RCPs, EOR projects and an active WO programme), to the benefit of all stakeholders.

This improved technical and commercial backdrop gives Trinity confidence that it will be able to plan for the long term, generate greater prospectivity and deliver higher cash flows for the benefit of all its stakeholders. In addition, it will allow Trinity to progress plans to recommence drilling during H2 with a view to further driving value and building on production forecasts over the short and medium term.

Having proven its low cost, low risk production model during the past 12 months - and with Trinity now benefitting from the recovery in the oil price - the focus is on scaling the business. Increased automation across producing assets, combined with a growing opportunity to significantly enhance production in collaboration with key industry partners, will be core to Trinity's development for the remainder of the year.

Bruce Dingwall, CBE, Executive Chairman of Trinity, commented:

"We are delighted to have renewed these licences for double the previous tenure, and on improved terms, which will work for the benefit of all stakeholders. We continue to have a strong relationship with Heritage and the terms of the extension provide us with the ability to focus on driving value as we increase production from existing and new wells, especially on the back of now having the 3D seismic data. When combined with the Government's recent moves to reform the SPT regime, the commercial and fiscal backdrop is moving in the right direction for existing operators to invest further and to attract new entrants into the region.

"Trinity has long-championed its portfolio approach and we have a broad range of near-term and longer-term opportunities all geared towards increased production, returns and scalability."

Enquiries

For further information please visit www.trinityexploration.com or contact:

About Trinity (www.trinityexploration.com)

Trinity is an independent oil and gas exploration and production company focused solely on Trinidad and Tobago. Trinity operates producing and development assets both onshore and offshore, in the shallow water West and East Coasts of Trinidad. Trinity's portfolio includes current production, significant near-term production growth opportunities from low risk developments and multiple exploration prospects with the potential to deliver meaningful reserves/resources growth. The Company operates all of its nine licences and, across all of the Group's assets, management's estimate of 2P reserves as at the end of 2020 was 19.55 mmbbls. Group 2C contingent resources are estimated to be 23.25 mmbbls. The Group's overall 2P plus 2C volumes are therefore 42.80 mmbbls.

Trinity is quoted on the AIM market of the London Stock Exchange under the ticker TRIN.