Trinity Exploration & Production

Another blog from far flung lands will keep you informed from Trinidad .

2017 financial highlights from TRIN this morning which I’m glad to say are in line with my expectations with operating profits up 74.6% to $11m (6.3) and more importantly in my mind operating margins of 24.3% (17.7), this is equal to $12 pb (6.7) and reflects the positive nature of my most recent comments. TRIN has reported ‘robust’ breakeven costs of $30.9 pb and has cash of $11.8m and net debt of $0.1m. Also, cash due to the Inland Revenue and the Energy Ministry is down substantially and below the amount envisaged in the ratified payment plan.

2H production growth was 10.2%, a very impressive figure wherever you are coming from and reflects excellent operational work with work overs, re activations, swabbing and re completions in full swing. Current production short term production targets are 2,800-3,000 bopd which augurs well for the future.

Trinity’s attraction has always been that it is set up to be a low cost, high margin play and with further onshore drilling to come will give the medium term production, as if it needed it, further growth.

CEO Bruce Dingwall says that 2017 was a ‘transformational year’ and that the ‘r’ word (restructuring ) has now been retired to the lexicon which is good to hear. Investors can now expect a scaling up and as he says, spinning off the flywheel by leveraging up the P&L to enable longer term growth to kick in.

Trinity has an enviable production growth already and increasing that at the margins they expect will combine to make a very decent overall growth story and at this price level was a no brainier for inclusion in the bucket list, watch this space……