Last checked at 13 Sep 2013 07:00
Trinity Exploration & Production plc
(the "Company" or "Trinity"; AIM:TRIN)
Trinidad & Tobago upstream sector to see increased investment due to positive changes in the fiscal regime
13th September 2013
Trinity, the leading independent E&P company focused on Trinidad and Tobago, is pleased to update on recent positive changes to the tax legislation for oil and gas companies operating in the country.
Senator the Honourable Larry Howai, Minister of Finance and the Economy, presented the 2014 budget statement to parliament on 9th September 2013. The budget was the largest ever presented, with an annual spend of circa US$10 billion which is the largest budget in the English speaking Caribbean. The energy industry underpins the economy of the country with current production at circa 800,000 boe/d.
In recognising that the hydrocarbon province in Trinidad is mature, the Government of Trinidad & Tobago has introduced a progressive fiscal package to ensure that activity levels are increased and that the region remains internationally competitive (as detailed below).
These changes will stimulate Trinity's cash flows and improve returns on future projects, and hereby allows further investments in exploration and development.
The full text of the budget statement can be found at the following link and the key changes that impact Trinity are summarised in the table at the end of this announcement.
http://www.finance.gov.tt/content/Budget-Statement-2014.pdf
Joel "Monty" Pemberton, Chief Executive Officer of Trinity, commented:
"These progressive fiscal reforms endorse Trinity's strategy and philosophy of operating and investing in Trinidad. The increased return to the Company will assist in driving project economics and delivering greater shareholder value through increased activity levels."
Enquiries
Trinity Exploration & Production Monty Pemberton, Chief Executive Officer Robert Gair, Corporate Development Manager
| Tel: +44 (0)20 7404 5959
|
RBC Capital Markets (NOMAD & Joint Broker) Tim Chapman Matthew Coakes Daniel Conti
| Tel: +44 (0) 20 7653 4000 |
Jefferies (Joint Broker) Chris Zeal Graham Hertrich
| Tel: +44 (0) 20 7029 8000 |
Brunswick Group LLP (PR Adviser) Patrick Handley Catriona McDermott
| Tel: +44 (0) 20 7404 5959
|
About Trinity
Trinity is the largest independent E&P company focused on Trinidad and Tobago. Trinity operates assets onshore and offshore on both the West and East coasts. 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 licences and has 2P reserves of 36 mmbbl and is targeting 5,000 bopd production by the end of 2013. Trinity is listed on the AIM market of the London Stock Exchange under the ticker TRIN.LN.
Notes to analysts:
The key changes to the fiscal regime that impact Trinity are summarised in the table below.
| Current | Revised (effective January 2014) |
Investment tax credit | · Tax credit of 20% on capex | · Unchanged |
| · Tax credit can only be used in year incurred | · Unused credits can be rolled forward for one year |
Capital allowances | Exploration · Initial allowance 10% · Annual allowance 20% reducing balance |
· 100% of cost to be written off in year incurred |
| Development · Intangible expenditure o Initial allowance 10% o Annual allowance 20% reducing balance · Tangible expenditure o Initial allowance 20% o Annual allowance 20% straight line |
· Intangible & tangible expenditure o 50% in year 1 o 30% in year 2 o 20% in year 3 |
| Workovers & Qualifying Sidetracks · Deduction of intangible costs incurred |
· 100% deduction of all costs incurred |