Trinity Exploration maintains low costs in 2017

Trinidad and Tobago-focussed exploration and production company Trinity Exploration posted its preliminary results for the 12 months ended 31 December on Thursday, confirming that it maintained a low operating break-even and high operating margin production.

The AIM-traded firm said it was “highly profitable” in the current oil price environment, while remaining resilient to lower oil prices, with operating earnings rising 77% to $11m.

Its operating margin improved to 24.3%, from 17.6% in 2016, or $12.0 per barrel from $6.70.

The board said the balance sheet 2as “significantly strengthened”, with increased cash and reduced debt.

It also accelerated payments to the Board of Inland Revenue of Trinidad & Tobago, and MEEI, with outstanding balances of $5.9m at the period end.

On the operational front, Trinity said its work programme for 2017 included a combination of 37 recompletions, 97 well workovers - inclusive of the reactivation of idle wells - and the resumption of onshore swabbing activities.

Delivering that activity set during the second half resulted in production growth of 10% in that six-month period when compared to the first half.

The board said it had identified extensive recompletion inventory and new infill well drilling locations across its asset portfolio.

It increased its onshore 2P reserves by 50% to 5.98 million stock tank barrels, with total onshore and offshore 2P reserves estimated to be 23.21 mmstb at the end of 2017 - a 9% increase compared to year-end 2016.

Estimated 2C reserves were 23.98 mmstb at the end of 2017, a 14% improvement year-on-year.

Looking at the company’s corporate progress, it completed its refinancing and share capital restructuring during the year, and also strengthened the board, with the appointment of Jeremy Bridglalsingh as an executive director, and David Segel, Angus Winther and James Menzies as non-executive members.

Since the year ended, the firm said its production and resultant cash generation remained on an upward trajectory, with production averaging 2,721 barrels of oil per day at the end of the first quarter.

“2017 was a year that was characterised by the stabilisation of production and the building of well inventory in H1 and a return to production growth in H2,” said chief executive Bruce Dingwall.

“Our low-cost production model has underpinned a significant increase in operating profits, affording the company the opportunity to accelerate debt repayment whilst also increasing cash balances.

“The combination of our strong balance sheet and proven ability to grow production ensures that the company is well placed to realise further value in 2018 and beyond.”