Home' Trinidad and Tobago Guardian : May 16th 2013 Contents BG10 | NEWS
BUSINESS GUARDIAN www.guardian.co.tt MAY 2013 • WEEK THREE
While Trinity Explo-
ration and Produc-
tion plc pared away
US$1.3 million in
losses, falling from
US$14.3 million in
2011 to US$13 million in 2012, according to
its May 8, (2013) results report, two share-
holders to watch have increased their share-
holding in the company.
The Legal and General (L&G) group of the
United Kingdom, the company s single largest
shareholder, and Trinity chief executive officer
Joel Monty Pemberton increased their share-
holding on the same day of the release of
the loss results for the year ended December
L&G fund manager Matthew Evans had
said in an April 9 interview that Trinity plc
is undervalued. Dr Jim Lee Young, a former
energy chamber president and former chief
executive of 10 Degrees North, one of Trinity s
predecessors, had said the same earlier, on
The share hit a low of 104 pence on May
3. Pemberton and L&G had bought on May
8. In a regulatory disclosure document, the
London Stock Exchange said: "On May 8,
2013, Joel Pemberton, CEO, purchased 28,500
ordinary shares in the capital of the company
at a price of £1.08 per share. Following this
purchase Joel Pemberton is interested in
522,815 ordinary shares in the company, rep-
resenting approximately 0.55 per cent of the
issued share capital of the company."
Pemberton was joined on May 9 (2013) by
Jonathan Murphy, a non-executive director,
who purchased 100,000 ordinary shares in
the capital of the company at a price of £1.08
per share. Following this purchase Jonathan
Murphy is interested in 4,977,421 ordinary
shares in the company, representing approx-
imately 5.25 per cent of the issued share
capital of the company.
L&G Investment Management Ltd (LGIM)
on the same day raised its shareholding from
10,975,411 (as of February 26) to 14,485,411
or 15.27 per cent of the company. Now, the
L&G Group has crossed the threshold of 15
per cent ownership of the company.
The market has already reacted to the
directors and major shareholder s purchases.
At press time Monday, Trinity was trading
slightly higher, at 112 pence, but still lower
than its February 14, initial public offering
(IPO) of 120 pence.
The financials released on May 8 said Trin-
ity had revenue of US$36.2 million at the
end of 2012, compared with US$22 million
Its loss before tax was US$23.9 million,
higher than 2011 s loss of US$17.2 million,
after write off for unsuccessful exploration
costs of US$21.9 million.
Its loss after tax was US$13.0 million, down
from 2011 s US$14.3 million. Its capital expen-
diture (capex) for the year was US$69.8 mil-
lion, up from 2011 s which totaled US$41.3
million, comprising Trintes field development
costs (US$22.9 million) and exploration costs
(US$46.9 million). Cash and cash equivalents
at year end 2012 were US$9.7 million, down
from the 2011 number, US$59.4 million.
Average gross production from the Trintes
field increased by 43 per cent to 1,715 barrels
of oil per day (bopd), up from 2011 s 1,202
bopd. Net proven and probable (2P) reserves
at Trintes increased by 25 per cent from 19.3
million barrels (mmbbl) at December 31, 2010
to 24.1 mmbbl at June 30, 2012 (audited by
Gaffney Cline Associates).
Trinity had an oil and gas discovery in
March 2012 with estimated gross recoverable
resources of 32 mmbbl and 69 billion cubic
feet (bcf) of gas.
Trinity has drilled six onshore development
wells to date. Four wells have been brought
onstream with average initial production rates
of 150 bopd per well (versus budget of 50
A new operating team installed at Trintes
and an infill drilling programme has com-
menced, the report said.
The exploration campaign on the Galeota
Block is expected to commence in the third
quarter of 2013 using the Rowan Gorilla III
(RG III) drilling rig, Trinity said. A rig sharing
agreement has been signed by Trinity, Repsol,
EOG and Centrica with Trinity committing
to take one rig slot using the RG III after
EOG s 2013 drilling campaign is completed.
Maiden results of the enlarged group for
the six-month period to 30 June 2013 will
be released to the market at the end of Sep-
Diversified asset portfolio
Trinity CEO Pemberton commented: "The
combination of Bayfield and Trinity Exlpo-
ration and Production Ltd to form Trinity
Exploration and Production plc has created
a robust business with a diversified asset
portfolio generating surplus operating cash
from its production operations on the east
coast, west coast and onshore Trinidad.
"Our 2013 onshore drilling campaign has
been successful thus far with six wells now
drilled, all under budget. Four of these wells
have been completed and brought into pro-
duction at rates surpassing our expectations,
a further two wells will be brought into pro-
duction within the next few days, and the
seventh well will spud within the next week.
Executive chairman Bruce Dingwall said
2012 was a year of great change for Trinity
Exploration and Production plc (formerly
known as Bayfield Energy Holdings plc) and
its subsidiaries (the group).
"Significant operational progress was made
with gross production growing 108 per cent
from 1,198 bopd to 2,496 bopd at the Trintes
field and exploration success at the EG-8
well in March 2012 which identified devel-
opment potential of 32.0 mmbbl of oil and
69.0 bcf of gas.
"Following the successful infill drilling
programme, the Group announced in Decem-
ber 2012 that net 2P reserves at the Trintes
field had grown by 25 per cent from 19.3
mmbbl at December 31, 2010 to 24.1 mmbbl
at June 30, 2012," Dingwall said.
However, growth in production and cash
flow was slower than expected due to oper-
ational issues on Trintes and by May 2012,
the group recognised the need for additional
funding, he said. The group sought to raise
equity financing, but despite a measure of
institutional support, was unable to secure
Consequently, the group commenced a
review of its strategic alternatives which cul-
minated in the announcement on October
15, 2012 that the group had agreed to be
acquired by Trinity Exploration and Produc-
tion Ltd (now Trinity Exploration and Pro-
duction (UK) Ltd---TEPL).
Trinity posts loss,
shareholders go in deeper
Spanish integrated oil and gas company, Repsol,
said it was able to produce 11 per cent higher in the
first quarter of 2013 thanks in part to "better vol-
umes from T&T."
Speaking during a conference call after the re-
lease of the company's first quarter 2013 results in
Madrid, Repsol chief financial officer Miguel Mar-
tinez said: "Production output was 36,000 barrels
of oil equivalent per day (kboed), 11 per cent higher
than in the first quarter 2012. Since five out of the
ten keep growth projects of the strategic plan
2012-2016 have come on stream, together with
better volumes from T&T.
"We are confident that we will achieve the ten
per cent average growth targeted for 2015. Incre-
mental production will come from the ramp up of
mid-continent in the US and Sapinhoa in Brazil and
the start you of our Phase 2 to of Margarita in Bo-
"On the other hand, Kinteroni is already techni-
cally prepared to come on stream, but the delay is
mainly due to the negotiation with the final con-
tractor arrangements to be completed with the
common share partnership and Trinidad will under
go planned maintenance."
The increased production volumes had a positive
impact of €72 million, he said. For Repsol, crude
prices remained flat while gas prices increased by
26 per cent having a positive effect of €43 million.
Increased depreciation charges had a negative im-
pact of €45 million.
"Depreciation charges per barrel are higher in the
early stage of production," Martinez said.
"We also have cost increases of €63 million
mainly due the new production of Sapinhoa in
Brazil and the startup of the new projects in Russia.
Sapinhoa produced 20,000 barrels per day in gross
terms during the quarter, but bears the cost of an
FPSO (floating production storage and offloading
ship) with the capacity of 120,000 barrels per day.
Two additional production wells will be connected
before year end," he said.
T&T again came up during the call when analyst
Anish Kapadia from Tudor Pickering Holt asked:
"On T&T, it's the largest producing asset in your
portfolio. We've seen the reserve life that fall down
to seven years at what's now a reduced production
rate. Just wondering how much of a concern that is
and how you see production over the next few
To which Martinez responded: "In relation to T&T,
I mean, we are at plateau there and I think we have
reserves in our books for the next seven years of
Kapadia then asked if a fairly significant decline
should be expected from T&T over the next few
years. Martinez answered: "No, the only variance
that you will see throughout the year will be due to
maintenance. There were some maintenance ex-
pected for the first quarter that has been delayed
for the second one, but as I mentioned, we are at a
plateau, and I don't see any decline in T&T produc-
tion other than those that are forced by mainte-
In conversation with Santander analyst, Jason
Kenney, Martinez said Repsol is getting US$20 per
million British thermal units (mmbtu). He said: "I
think that the only difference that the (analysts')
consensus have with us in this quarter, was our
North American liquefied natural gas (LNG) assets.
I mean the rest of them were really accurate and
probably nobody was expecting, too, that we will
be selling gas in the eastern coast US$20 per mil-
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