"Another blog from far flung lands will keep you informed from Trinidad.2017 financial highlights from LSE:TRIN:Trinidad Exploration & Production this morning which I'm glad to say are in line with my expectations with operating profits up 74.6% ..."
Summary from the Whitman Howard report on todays update..
Trinity released its FY17 update this morning, ahead of its FY results in May. We have made only minor tweaks to our model, which increases our RENAV (and PT) from 32p to 33p. We continue to think Trinitys share price is trading at an unwarranted discount to its fundamental value, and remain with our BUY given solid operating results and potential 2018 catalysts including removal of the CLN overhang and further clarity on the potential value in Trinitys offshore acreage.
The current year has started positively with production in January rising to 2,811 bopd. The Company aims to at least maintain this level of production during 2018 and is targeting a range of 2,800 - 3,000 bopd for the current year. The Company is planning to implement a further 14 RCPs and 93 workovers/reactivations this year, to continue to invest in the Company's infrastructure and to resume onshore drilling with two new infill wells targeted for H1 2018. The Company is confident that this plan can be delivered under the current fiscal regime, and is refining the pipeline of other well locations for drilling later in the year (contingent on the oil price and clarity regarding the future fiscal regime). The Company's low consolidated operating breakeven (US$30.9/bbl) and the hedging programme which has been implemented in 2017 gives confidence that these growth and investment plans could be delivered even if the oil price declined dramatically to its 2015/16 lows and/or if the current SPT regime remains in place.
The Company continues to explore various options to strengthen the balance sheet further, with the intention of repaying the remaining amounts due to the BIR and MEEI, and redeeming the CLN, during 2018 and accelerating the onshore infill drilling programme.
Bruce Dingwall, CBE, Executive Chairman of Trinity, commented:
"2017 was a transformational year for the Company, with the restructuring and refinancing undertaken at the beginning of the period and our return to production growth in the second half of the year. Our low-cost production model has underpinned a significant increase in operating profits, affording the Company the opportunity to accelerate debt repayment. The combination of our strong balance sheet and proven ability to grow levels of production ensures that the Company is well placed to realise further value in 2018 and beyond.
( Malcay as in Malcom Graham Wood and bucket list as in his top 15 or so picks for the year..2018 is due out imminently)
And that might give the s/p a one off pick me up, hopefully... at least it will put on the radar of a wider audience.. it's still a very low profile share generally imho...
I like this share a lot and have been in it for almost a year now.. i'm doing nicely but I think this can go a lot higher than 17p .. eg it briefly went to 20p not too long ago in a meaningfully lower poo environment...
Good luck to all fellow holders here and nice to see this bulletin board is waking up somewhat ( i was posting to myself here for a good while last year )
Dissemination of a Regulatory Announcement that contains inside information according to REGULATION (EU) No 596/2014 (MAR).
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Q4 2017 Operational Update
Increasing levels of profitable production
Trinity, the independent E&P company focused on Trinidad and Tobago, today provides an update on its operations for the three month period ended 31 December 2017.
During the period, Trinity continued to build on the momentum achieved during the first three quarters by delivering yet further growth in profitable production and strengthening of the balance sheet.
Q4 Operational Highlights
-- 11% quarter on quarter increase in Group average production volumes to 2,777 bopd for the three-month period (Q4) ended 31 December 2017 (Q3 2017: 2,506 bopd)
-- Increase in production was achieved due to the continued positive results on the low-cost high return work programme of recompletions ("RCPs"), workovers, reactivations and swabbing
-- A total of 20 RCPs (Q3: 12) and 25 workovers (Q3: 27) were completed during the period, with swabbing operations executed across all land assets
-- Having subcontracted a third rig to support the increased activity set there was a 19% increase in rig man-hours worked from 1,741 hours to 2,067 hours
-- During December 2017, production exceeded 3,000 bopd for over 14 days as a result of several wells flowing naturally post recompletion, underlining the quality of the RCP inventory
-- These wells have now returned to normal (planned) production rates
-- Whilst a sustained production rate above 3,000 bopd is not expected until later in 2018 it evidences the clear upward trajectory being delivered from the planned work programme
Strong Balance Sheet
-- Cash balance of US$11.7 million as at 31 December 2017
-- Liabilities outstanding to the Board of Inland Revenue ("BIR") and Ministry of Energy and Energy Industries ("MEEI") continue to reduce faster than anticipated by the ratified payment plan
Management is continuing to examine a range of options regarding the sale of the West coast assets. In the interim, the assets continue to generate positive cash flow.
The Company will announce a summary financial review of 2017 including unaudited numbers for the full year in early March. This will provide further detail on production, margins, operating breakeven, costs and profitability - highlighting the growing value of the Company's assets and continued strong financial performance in an environment of improving oil prices.
Profitable production has continued since the year end with the Company commencing its 2018 work programme. As previously announced, this will include the initiation of new drilling operations during the current quarter, with a view to achieving its near term production target of 3,000 bopd during 2018 and achieving a more material step change in production in the medium term.
Bruce Dingwall, CBE, Executive Chairman of Trinity, commented:
"We are extremely pleased with the performance during the period and the ongoing progress across our portfolio of assets. We are focussed on further maximising profitability and cash flow while generating increasing returns for shareholders and look forward to further updating the market with unaudited numbers for 2017 in early March."
Total debt (excluding tax losses to carry forward for years) is in the region of only £10M and looks set to be paid down this year -- including the Credit Loan Notes which would convert at 6p after end 2019.
However, with the management "Significantly Incentivised" to pay them down rather than convert the question is When rather than If..........
Quoting from Whitman Howard Report:
"Whilst the CLN may act as an overhang for some new
investors (it would dilute our RENAV from 32p to 25p if it converts),
management have guided that they are committed to paying it down pre
conversion or looking at alternative financing options. "
At that event last year in London, Bruce was asked why the shares are so cheap...TRIN is "Bruised Fruit" was the reply.
So, when does TRIN stop being bruised fruit and start to be an attractive investment?
Right now in the Oil markets there is a clear re-evaluation going on as to what is an "appropriate" price....appropriate meaning sustainable...the glut (as was) pointed toward a lower for longer pricing paradigm. It seems that this is not sustainable...I point you towards 8 simple supply and demand factors:
1 Shale has to run to stand still...for every one good well they need 2 wells to replace it with flow that drops rapidly
2 Mature oil fileds (circa 35 mln barrels a day of supply) are declining annually at 6-8% with next to no spend on improving them
3 Replacement rates last year were 11%...world replaced 11% of what we used with new supply
4 Is OPEC compliance so high because it is actually fairly close to peak production for many of its members?
5 Shale business model is not looking good (Cheap financing wont go on and on)
6 Shale wells are expensive...and labour intensive...and pollutant
7 Geopolitical risks are not going away and the market has been very complacent about this
8 Global demand is being understated by the EIA and IEA
TRIN's journey sits with this backdrop...oil is hunting around for its optimum level that is sustainable for purchasers and sustainable for producers. 40's wasn't appropriate, 50's probably isn't, 60's - 70's may very well be.....or not? We will see.
Meanwhile TRIN quietly rolls on in a great year of opportunity...the balance sheet is repairing. Bruising is healing.
The market is seeing what is going on with oil and rubbing its "but what about electric cars now" and "lower for longer" eyes as it realises that all the journalistic huffing and puffing isn't going to change the infrastructure that has taken years to build...23,000 man hours of labour per barrel of oil...hard to replace...the world needs an incentive...clue is that is NOT lower for longer...it is higher forever as price of extraction runs higher...until the world is forced off oil.
What if nobody buys TRIN during such a period of higher for longer oil prices? Then...we are a cash cow for all holders with massive growth of cash flow: further growth, very strong balance sheet and dividends.
The truth will out...it always does: Cash cow, Great management, Great industry, discipline on costs, strong balance sheet, no nonsense approach to performance, great assets in an arena that cannot be lower for longer...I am in no hurry for the share price to move. I am in a hurry for a quiet.........
fundamental driven re-rate through the numbers. MR Market can be greedy or fearful in the process...
Number driven re-rates are much more satisfying than the agony and ecstasy (think Bitcoin at an extreme) of greed driven baseless share price moves.
(Gabriel - LSE)
At $66 oil and with taking off SPT (average 22%) leaves us with $54 a $24 per barrel profit. At hopefully a conservative 2850 bopd prudcution rate that is $2m per month profit. Refute these numbers if you disagree but valuation here is exceptional imo.
My charts doesn't show a Gap were yours does as it shows high & low tails on the two candles so they cover the your Gap.
Have you got your chart set to one day or what ?
IMO you'd be better off using the free end of day charts Prorealtime as they are clearer and more precise plus they have loads of tools to use if one knows how to use them.
I don't know so I only need & use the 14, 20, 28, 50 & 200sma's and an RSI set at 30--70.
If it pops through the 30 its over sold & time to buy and through the 70 its over bought and normally time to sell, but as stocks can still continue climbing one has to check other signals before selling, but in any case, after a stock taps or goes through the RSI top or bottom, and if it starts to come out of the 70 or 30 its definitely time to sell or buy.
Below 30 with the RSI while I may not catch the bottom I can and will buy at any time because it will rebound at some time..
But over the 70 as GKP has proved on more than one occasion, it get more difficult and being an investor type in GKP I am too involved in the blasted stock, heyhum
With GKP at the moment the 2nd Amendment News is imminent IMO so even though its overbought its a hold
Anyway I'm waiting for 14--14.2 as my start point for a buy, but it may go lower so I hoping for further signs.
So far the 14sma is moving down which will be followed by the 20 then possible the 28 and possibly the 50sma.
But finding the rhythm
Never never never buy with your heart into any stock like TRIN as if you miss a low another will come round again.
Instead its best to watch and if it has one finds its trading pattern then you can catch the bottom.
And if anyone posts a buy, check you chart, look for an expectancy rise and what possible News is on its way, and if nothing shows then stick to a set of principles and keep your powder dry for another day.
Buy Low Sell High and remember, stocks are not love objects they are to make money from so IF you can beat the Bank you have won.
The Market is a hard unsympathetic mistress and she will take your hard earn profit away just as quick as she shows it you . . . so take profit when it comes and don't be greedy trying to get more.
Work out what you need to be able to make a profit, 5% tax + Brokers fees two ways + your stake and write it down, 3% to 10% profit is better than nothing . . . any more is pure luck which won't happen every time so take the risk at your own peril.
Bygum, I do enjoy trying to beat the Market and winning feels even better.
If you work try then try and check in pre 8am for news and lunchtime if possible o see whats happening and remember you can always set limit Buys and Sells and again, do not be greedy.
16p is a hard pill but you can get it back . . . I'll tell you when and what to do when the time is right.
Yes I do "use" charts, albeit rather poorly.
I picked up a little from my early days when a "Chief Chimpanzee"(who I think was Zak Mir) was getting his hand in by giving some free schooling.
'Tis such a shame that I am still learning, though, hence my buy at 16p. ^_^
If you use Charts then watch for the RSI (at the bottom of the screencast) to move below the 30 line as that's a Buy signal.
I'll buy some when the price hits around 14 to 14.20 which if I am right should be around Friday give or take a day
Being a tight sod I use "prorealtimes" end of day charts which are free.
I work on the principle of buy low sell in profit
The charts help me time my Buys and not being greedy I sell when I'm profit or when good News arrives, without being bothered at catching the high to get max profit.
Accept for GKP I don't do the Investor thing as I play shares for profit, which if its better then 3% then I've beaten what I can get in the Bank.
When GKP is sold then I'll retire into the shadows and quietly do my own thing.
5 DMM's on the Book
SING . . . EMS 20,000
CFEP . . .EMS 100,000
SCAP . . .EMS 50,000
WINS . . .EMS 50,000
PEEL . . .EMS 20,000
PEEL & SING deal only with AT's which are of low Volume
CFEP, SCAP & WINS deal with ATs, and OTs
IMO Trinity is in what Charters call a Consolidation period were one grabs the lowest price possible and waits for News to take the Price up, at which time it's advisable to take profit.
Trinity is in the same situation that GKP was in back in 2009 and with a lot of luck good Licences and Drilling Success like GKP did in 2009 one can hopefully make money.
So IMO its best to Buy the Lows and Sell the Highs created by any News Releases.
If you don't fancy watching what is happening to your money, then, like any stocks taking the, erm, Investing route and holding through thick and thin can be risky ? ?
the old hedging contract in place til march is still a bit of a drag but this is a buy sub 17p imho.. it has started the year nicely too.. but thats after a significant retrace from 20p at back end of 2017.. 20p doable again in not too distant future I hope.. and if WTI averages north of $55 in 2018 perhaps this could get north of 30p sometime this year
Introduction to Bruce Dingwall 00:38
Trinidad and oil production 02:22
Trinitys oil fields 03:30
Trinitys law and national landscape 04:13
Corporate snapshot 05:47
Who are we? What do we do? - 06:54
Trinitys reserves 09:18
Oil production in 2017 - 09:40
Trinitys key metrics 13:45
EBITDA margin: 27% 14:42
Cost base down 57% since 2014 15:48
Peer group comparison - 16:44
H2 2017: increased work programme - 17:46
Momentum - 18:33
2018-19 outlook - 23:20
Margin comparison - 23:55
Why is the share price so undervalued? - 25:05
Whats the likely CAPEX over the coming years? 27:54
Could you explain how the tax and royalties work? - 29:50
Why has it taken so long to get to cash flow positive? - 32:06
What is your dividend policy? 33:55
What are institutions asking for Trinity to achieve before they take a stake? - 24:25
Why is the share price so low, what do you need to do? - 36:05
Why is the performance not consistent? - 37:25
With the history of Venture Productions, who has stayed with you? What are your plans? 38:09
I am in, and expect to be buying more. Looks like the management have got a grip on the costs and with a total share capital of about £30M it seems to be way undervalued. I didn't have any problem buying on 'quote and deal' so it is not too illiquid (if there is such a word).
still ticking up nicely.. so 20p is doable soon.. hopefully.. I did that top up at 18p and have stopped buying now.. but in hold mode more than sell mode at this time...
This has doubled in last two months and i feel like I'm more or less talking to myself here.. funny old world.
I hope one4all is still involved? .. although the July / August scary fall saw a few jettison their positions here, I expect.. proving this is a volatile stock for sure... so as ever dyor and be careful.
I bought some more this morning when I was more comfortable that 16p had some decent support .. I see it has now moved up a bit again and so I would by some more again at 17.5p/18p .. if that happens...
technical guys might get more involved again here now and the fundamentalists might well be confident that a higher again s/p is justified here now given p+l, b/s, future prospects etc..
into the 20's is reasonably readuily possible here soon imho..
of course dyor... and illiquid stocks like this can go down quickly too on not particularly large selling pressure..
These guys have effectively no debt now - cleared a relatively lot down - and low(ish) costs of production and so if WTI can stay even close to these levels this could do very nicely going forward.. and therefore pleny of s/p upside potential imho..
So i've just done a small top up here..
DYOR of course ( and we saw recently that because of the low profile / illiquid (ish) nature of this that if someone goes seriously about shorting it, it can come off a lot quickly ( hopefully they will not pick on it now though.. not least with WTI stronger for a while and a lot better balance sheet in assets and debt and P+L terms.., hopefully.. but who really knows.. )
I'm hoping the fall of recent days is from a shorter who does not know of fundamental issues here but does understand that this is an illiquid name whose price can be easily manipulated and whose management are not proactive in defending shorting occurrences - eg via RNS saying no fundamental changes - and so I've averaged down at 10p ..
But DYOR of course as this is gambling.. and anything can happen in gambling!
waking up a little.. perhaps in anticipation of an update coming very soon.. even if there is an imminent update 'nobody' knows how good or bad .. so this rise is likely speculatively 'in hope' I guess.. Also this is pretty volatile so todays rise so far in that context isn't much...
(I have increased my position a bit here since my first post but not a lot as I haven't got religion here.. yet..
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