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Trinity’s value proposition

The independent oil and gas exploration and production company focused solely on Trinidad and Tobago is one of the lowest rated in the sector, and unjustifiably so
September 10, 2019

The share price of Trinity Exploration & Production (TRIN:12p), an independent oil and gas exploration and production company focused solely on Trinidad and Tobago, has suffered in the past 12 months after the oil price plunged by 45 per cent in the final quarter of 2018.

However, the West Texas Intermediate (WTI) crude oil price has subsequently increased by 33 per cent to $56.50 a barrel from its December lows. The fact that Trinity’s share price has yet to recover is in no way a reflection on the operational progress the company has been making. Indeed, first-half average production increased by almost 9 per cent to 3,008 barrels of oil per day (bopd), underpinned by five recompletions and 71 maintenance workovers and reactivations of wells.

It’s more profitable, too. Cash profit after supplemental petroleum tax (SPT) and property tax (PT) rose by a fifth to $6.5m in the six month period, and Trinity’s operating break-even improved by 8 per cent to $26.3 a barrel, or less than half the current spot rate. Cash flow performance has improved markedly, too. Cash inflow from operating activities doubled to $10.4m year on year, buoyed by a $3.9m net increase in Trinity’s working capital position. In turn, net cash has risen by 75 per cent to $17.8m (£14.6m) since the start of 2019.

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