Trinity reports continued strong production

Trinidad and Tobago-focussed exploration and production company Trinity updated the market on its operations for the three months ended 30 June on Thursday, reporting that its low cost breakeven and a technically-led operating model had resulted in continued strong production levels and operating cash generation.

The AIM-traded firm said both of those underpinned its strategic push to “meaningfully scale” the business.

It said that, despite the Covid-19-related state of emergency in Trinidad, production levels remained “resilient” during the second quarter, with volumes averaging 3,047 barrels of oil per day, compared to 3,107 in the first quarter, thus yielding a first half average of 3,032 barrels per day.

The group's unaudited cash balances remained “robust” at $19m as at 30 Jun, compared to $20.2m at the end of December, which the board put down to “strong” operating cash generation of $5.1m.

Trinity said it remained on track to meet its operating breakeven target of below $30 per barrel for 2021.

Average pre-hedge income operating breakeven for the first half was $27.80 per barrel, compared to $24.7 a year earlier, with the increase said to partially reflect additional costs associated with the coronavirus crisis.

Looking ahead, the company said it was “well-placed” to pursue multiple growth opportunities organically and inorganically across the energy spectrum, due to its unique position in Trinidad, its well-established asset base and operating philosophy, and the partnerships it had developed.

The board said partnerships would continue to play an “important part” in enhancing its capabilities, reducing risk and increasing its ability to win mandates.

Internally, it said the opportunities across both an expanded onshore acreage and the Galeota licence area, particularly the Echo development, were being advanced, with further developments on both fronts expected to be announced during the second half.

“The board is extremely proud of the Trinity team for, once again, safely delivering a strong operational and financial performance despite the ongoing state of emergency in Trinidad,” said chairman Bruce Dingwall.

“Strong base production and operating cash generation, and the maintenance of a robust balance sheet, are the foundations that continue to enable us to pursue the numerous initiatives underway to meaningfully scale the business.

“In addition, the capital reduction which we have recently effected will enable the company to return value to shareholders via dividends and/or share buybacks as and when appropriate.”

At 1440 BST, shares in Trinity Exploration & Production were down 1.83% at 160.5p.