Trinity pleased with first quarter as oil prices rise

That was slightly lower than the 3,103 barrels per day it recorded in the fourth quarter, and 3,107 barrels per day in the first quarter of 2021.

The AIM-traded firm said production sold averaged 2,929 barrels per day, down from 3,039 barrels quarter-on-quarter, and 3,051 barrels year-on-year.

A total of five recompletions and 24 workovers were completed in the period, with swabbing continuing across the Onshore and West Coast assets.

The company said the recently-acquired PS-4 asset was “smoothly transitioned” into the Onshore portfolio, with recompletions to enhance its production continuing into the second quarter, followed by two new wells in the second half.

Trinity said the installation of the 31 supervisory, control and data acquisition (SCADA) units on its tier-1 wells in WD-5 and WD-6 was now complete, covering 50% of its land production, with initial indications of lower volatility from those wells through better performance optimisation and quicker response times to well issues.

Financially, Trinity reported an average realisation of $83.10 per barrel in the quarter, compared to $52.30 a year earlier.

Unaudited gross quarterly revenues increased 52% year-on-year to $21.9m from $14.4m.

Owing to higher realised prices, supplemental petroleum taxes of $2.0m - equivalent to 9% of gross revenues - would be payable in April for onshore and offshore production during the first quarter.

Trinity’s cash balance stood at $17.5m as at 31 March, reflecting “strong” operating cash generated in the period of $5.5m.

That was offset by hedge payments of $1.8m, capital expenditure of $1.7m, tax payments of $2.5m, and annual prepayments of $0.5m for things such as insurance.

The firm’s average operating break-even for the quarter was $31.10 per barrel, compared to $25.80 per barrel a year earlier.

While that was expected, lower sales volumes created upward pressure on the breakeven, the board said.

The company said it was forecasting an increase on its usual operating breakeven to$31.50 per barrel for the full-year, as planned, to support medium-term growth through increased technical and intellectual capacity.

Base production for 2022, before execution of its growth strategy, was expected to be between 2,900 and 3,100 barrels of oil per day.

However, the company said it believed that successful execution of the growth strategy via the planned drilling programme, acquisitions and other initiatives, were likely to “significantly enhance” production volumes and cash generation in the medium term.

“Trinity's core business remains robust - our reservoirs are performing in line with expectations, and once we are able to deploy human resources with less Covid-related restrictions we anticipate returning to usual production capacity,” said chief executive officer Jeremy Bridglalsingh.

“We look forward to the resumption of drilling which will include high angle, horizontal and deeper wells.

“While more complex, with higher risk, these wells will have the potential to increase the cumulative number of barrels recovered per dollar of capex invested, and could change the economic paradigm of onshore drilling very positively.”

Additionally, Bridglalsingh said the company was “excited” by the prospect of farming down Galeota, allowing the asset to become a “more meaningful contributor” to production and cash flow in the medium to long term.

“We remain confident that the government understands the requirement for fiscal reform, despite the near-term outlook for crude oil prices, in order to accelerate the country-wide development of oil and gas resources and to stimulate development of a more robust independent sector in Trinidad.

“We understand that the government's deliberations over tax reform, specifically in relation to SPT, are ongoing, and we look forward to news on this matter in the near term with keen interest.

“We have a resilient, growing business, and are focused on optimising returns from our assets. We are determined to build on the strong foundations in place as we execute against our plans for the next stage of Trinity's development, and we look forward to updating the market across all activities in due course.”

At 1027 BST, shares in Trinity Exploration & Production were down 1.41% at 140p.