Home' Trinidad and Tobago Guardian : September 26th 2013 Contents BG8 | ENERGY
BUSINESS GUARDIAN www.guardian.co.tt SEPTEMBER 2013 • WEEK FOUR
Only four months after fully taking over
Bayfield, management at Trinity Exploration
and Production plc explained during an earnings
call with analysts and investors, how it turned
the inherited US$13 million loss into a AUS$54.1
million after tax profit in four months.
Chief executive officer Joel "Monty" Pem-
berton explained that the company s pre-
exceptional items after tax profit was US$1.8
million. The post exceptional items after tax
profit was US$54.1 million. Without the excep-
tional items, which could be considered
"change" from the Trinity reverse takeover of
Bayfield, the company still managed to turn
an after-tax profit of US$1.8 million.
During the earnings call with analysts and
investors, Pemberton said: "Operationally, cur-
rent production is at 3,830 barrels of oil equiv-
alent per day (boepd) which has grown by 12
per cent since re-admission on February 14,
2013, when Trinity took full control of the
enlarged group. This production growth has
been led by our onshore and west coast assets,
(where) production increased by 35 per cent.
However, this was negated by (a) decrease in
Trintes production of 34 per cent for the cor-
Trintes was one of the fields acquired through
the Bayfield takeover.
"Like any other business, we have challenges,
and Trinity has certain operational challenges
on Trintes in respect to the power supply to
the platforms, equipment on Rig 2 and the
boat transfer system. Over the last several
months, we have implemented a plan to resolve
these challenges which requires the temporary
shut down of Rig 2 to complete all the requisite
work, with drilling operations recommencing
in November 2013. Notwithstanding these
challenges, Trinity was still able to grow pro-
duction and reserves, which is a testament to
the strength and depth of our diversified port-
folio," Pemberton said.
In order to achieve this production growth,
Trinity brought into production six onshore
wells for the half-year ended June 30, 2013.
Two of those onshore wells were drilled in
2012, but not brought onstream until 2013.
He told investors Trinity is "currently drilling
(its) eighth well, having completed three wells
from June to today. In addition to this, we are
managing the production decline through an
active workover programme, performing 52
workovers for the half-year utilising four full-
time production rigs, which also perform all
onshore well completions for the onshore
In the oil and gas industry, a workover is
the process of performing major maintenance
or remedial treatments on an oil or gas well.
On the west coast, Trinity commissioned a
new deck for the MP-8 platform ahead of a
heavy workover programme.
He said: "This project is an excellent example
of the Trinity business model working in prac-
tice. We have owned the Brighton field for a
number of years, but in 2009 invested in new
3D seismic data to further our understanding
of the sub-surface. That data identified sig-
nificant remaining missed pay, including
workover opportunities, infill drilling locations
and exploration prospects including El Dorado,
which I ll discuss later."
Ahead of the programme
In 2012, ahead of the current workover pro-
gramme and future infill drilling, Trinity rene-
gotiated the commercial terms of the license
to secure reduced royalty rates to enhance the
economics of its investments.
"Delivery of the project has been highly
successful from an engineering and health,
safety and environmental (HSE) perspective,
utilising local contractors to reduce costs.
More importantly, we have worked over 4
wells to date which have added around 160
barrels of oil per day (bopd) and these wells
will be optimised later in the year with gas
"We have a further three wells to complete
and are reviewing further opportunities based
on the encouraging results to date. This project
has rejuvenated a mature field and significantly
extends the field life. It should also be noted,
that the upgrade to the offshore platform MP-
8 will also facilitate the El Dorado exploration
coming onto production quickly, as it is the
intention for that well to be tied into this
He said Trinity s east coast assets (acquired
through the Bayfield reverse takeover) "have
presented several challenges in the first half.
As we reported in February, we experienced
a generator outage at the Alpha platform,
pump and sand control issues and water cut
fluctuations which adversely impacted pro-
duction. Our team has been working to restore
production from the impacted wells and com-
pleted eight workovers in the first half which
added net production of 350 bopd."
Trinity has had to make a significant invest-
ment in HSE at the Trintes field to bring it
in-line with standards across the portfolio,
"We continue to have issues with power
supply on the platforms which mean that
currently we estimate the Trintes field is oper-
ating at around 80 per cent capacity."
Still on challenges facing the company,
Pemberton said: "Trinity has also experienced
a number of challenges during its infill drilling
programme. We had to suspend drilling activ-
ities on the first infill well, B5, due to a cracked
wellhead. We then moved to the B11 well.
However, rig uptime has been very poor as
we have faced mechanical and reliability
The B11 well was targeting the "N" sands,
a zone of the field that has not been targeted
since the 1970s. The well was drilled to its
total depth (TD) but following logging, Trinity
decided to sidetrack the well. The sidetrack
is at TD "and we will be completing and
bringing it into production in the next week,"
Due to the delay in production growth from
the Trintes field, Trinity told analysts and
investors it expects to end the year 2013 with
production of 4,200-4,500 boepd.
"This deferral in production growth is dis-
appointing, but it is worth highlighting that
none of the challenges are in respect to the
reservoir and so management is still confident
it can deliver on the production growth from
the Trintes field once drilling recommences."
Also on the call, Bryan Ramsumair, Trinity s
chief financial officer said: "Our net profit
was significantly impacted by a number of
one-off items which most significantly includ-
ed US$61.8 million in negative goodwill. This
gain was recognised on the purchase of Bay-
field by the company and arises as the fair
value of net assets acquired was in excess of
the fair value of consideration exchanged. I
would stress that this is a non-cash item."
Turning to the cash flow, Ramsumair said
the company generated cash flow from oper-
ating activities of US$11.2 million. "We had
a large working capital outflow of US$19.4
million, which included settling a number of
overdue payables from the Bayfield side of
the business, given their financial challenges
prior to completion of the merger. It also
included US$15.5 million of tax payments, of
which US$10.1 million related to 2012."
He said Trinity s capital expenditure (capex)
in the first half of 2013 was US$24.3 million,
of which US$0.9 million related to exploration
activities, US$16 million related to drilling
activities and US$8.3 million related to infra-
structure investments, notably the MP-8 plat-
How Trinity turned US$13m
loss into US$54.1m profit
Continued on Page 9
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