Trinity, Genel

Trinity Exploration & Production

It is fair to say that Trinity ‘knocked the lights out’ as they say in Q4 as they report operational numbers this morning. The fully funded onshore drilling programme brought on no fewer than six new wells in the period, all on time and below budget.

No surprise then that the company report a ‘strong upswing in production’ during the period. The numbers speak for themselves, a 17% increase in production q/q to 3,205 bopd and a 14% y/y increase to 2,871 bopd. Annualised production was underpinned by a combination of 8 new onshore development wells coming on stream as well as the company’s regulation programme of low cost recompletions, workovers reativations and swabbing. Given that most of those wells were only started late in the year the outlook for 2019 is highly encouraging.

In addition to all that TRIN report a successful RCP at Trintes, the first since the company took over as operator in 2013 and is on production at a rate ahead of management expectations. As promised the first phase of the FDP for the TGAL field was submitted in the period and work now continues on pre-FEED studies and environmental approvals pre FID.

The company is now incredibly strong financially with cash of $11.8m and no debt, the cash figure is understated by $5.1m as a result of the Petrotrin restructuring which is confidently expected to be received in 2019.

Trinity remains in an incredibly strong position with, in its own words ‘profitable production, a healthy cash balance, no debt,strong cash flow generation and a portfolio operating break-even of below $30/bbl’. All I can add is that a company with such high a margin, well managed position with substantial growth opportunities should be on a much higher rating than it is at present.

Genel Energy

A trading and operations update from Genel this morning that shows quite how much cash flow was generated last year. $335m of cash proceeds were received in 2018($263m) which was up 27% and of which $98m was received in Q4. This left unrestricted cash balances of $334m ($162m) with net cash of $37m ($137m debt).

Production was 33,690 bopd with Taq Taq falling but Tawke gaining due to phenomenal success at Peshkabir, this year whilst further production wells will be drilled, activity here will be concentrated on field management and optimising production. This will include utilisation of associated gas to enhance oil recovery and consolidate what is a substantial discovery in its own right.

At Bina Bawi and Miran both oil and gas recovery are being discussed with the KRG Ministry, in order to ensure a development that includes both gas and oil, a phased  solution is favoured. To ensure certainty of both a rescaling of the size of the gas plant and an overall smaller project should benefit both parties.

The key with Genel is to ensure a balanced capital allocation with in country expenditure, ‘accretive additions to the portfolio’ as well as potentially returning capital to shareholders. With control over the midstream, production growth in Country and a substantial balance sheet strength,  pretty well whatever the oil price Genel is very strongly placed in the sector. The shares offer significant opportunity at these levels.


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4 comments on “Trinity, Genel
  1. M How says:

    I’ve been following TRIN since it was valued at about 6p a share back in 2016; the company looks to be outstanding however concern around Trinidad taxes and also growth proposition by the company, what’s the next step?

    It’s valued around a p/e of 3 what more does Bruce & co. need to do to meet WH price target of 30p+ – dividend? Do they need to look at accelerating production to reach the long-term targets faster or are they better off staying disciplined and sensible?

    • Malcy says:

      See blog of last week, I think that production can go up especially as they look offshore and use cash to drill more wells. Think it is one of the most undervalued stocks I cover. Malcy

  2. Paul Fleury says:

    Hi Malcy not communicated for a while. Notice movement in the price of FOG which I continue to hold. Jemina in operation and the Aussie Government strongly pushing.

    Got more than enough skin in the game so won’t be topping up but any idea for the price increase, suspect news coming soon?

    All the best 2019


    • Malcy says:

      Hi Paul
      Sorry i dont get a chance to look at this very often and now i see that FOG are now back in business. I spoke to POQ this morning and he is very excited as you can imagine. I have always thought this could be a monster so great to see him back in business.
      Kind regards

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