Trinity Exploration & Production Sale of West Coast Assets for US$4.55 million (7200N)
August 11 2017 - 1:00AM
UK Regulatory
TIDMTRIN
RNS Number : 7200N
Trinity Exploration & Production
11 August 2017
Dissemination of a Regulatory Announcement that contains inside
information according to REGULATION (EU) No 596/2014 (MAR).
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Sale of West Coast Assets for US$4.55 million
Trinity, the independent E&P company focused on Trinidad and
Tobago, announces that it has entered into a binding sale and
purchase agreement ("SPA") to sell its interests in the Brighton
Marine and the Point Ligoure - Guapo Bay - Brighton Marine
Exploration and Production Licences and related fixed assets (the
"West Coast Assets") to a subsidiary of AIM quoted Range Resources
Limited ("Range") for a cash consideration of US$4.55 million (the
"Transaction"). Together, the West Coast Assets constitute all of
Trinity's West Coast licence portfolio.
Transaction Rationale
The Transaction supports Trinity's strategy to grow reserves,
production and cash flow from its core Onshore and Offshore East
Coast assets where the bulk of current reserves and production
reside. Whilst there is significant remaining potential across the
West Coast Assets, the Directors believe that this is best
extracted by an operator with the resources required to continue to
invest in these assets. In particular the Transaction:
-- crystallises the significant value of the West Coast Assets;
-- further strengthens the Company's balance sheet and working capital position; and
-- enables both financial and human resources to be focused on
core growth opportunities across the Company's Onshore and East
Coast assets.
The sale is subject to customary regulatory approvals, including
approval from the Petroleum Company of Trinidad and Tobago Limited
("Petrotrin") and the Ministry of Energy and Energy Industries
("MEEI").
Under the terms of the Transaction, Range has agreed to deposit
the full consideration of US$4.55 million into escrow to be
released on completion. The Transaction is expected to complete in
the fourth quarter of 2017. The funds received will be used for
general corporate purposes.
In aggregate, the West Coast Assets produced at an average net
rate of 190 bopd for the twelve months to 31 December 2016, contain
management estimate 2P reserves of 2.6 mmbbls and contingent
resources of 0.52 mmbbls. The Transaction consideration equates to
US$1.75/bbl (2P) and US$23,947 on a US$/flowing barrel basis. Both
metrics are higher than the current market value ascribed to
Trinity's portfolio as a whole.
Further announcements will be made as appropriate.
Forward Strategy
Following completion of the Transaction, Trinity will continue
to be one of the largest independent oil and gas companies in
Trinidad with a portfolio of assets spanning the Onshore and
Offshore East Coast acreage. These remaining assets include
management estimate net 2P reserves of 18.7 mmbbls and 20.6 mmbbls
of contingent resources.
Trinity has a clear strategic focus going forward, which is to
grow reserves and production to maximise the cash flow from our
core assets while achieving a market value that is more reflective
of our underlying assets. This will be delivered through financial
discipline, the efficient deployment of capital and by delivering
on the potential of our diverse and deep portfolio of low-cost
production and development assets. The Company is well positioned
for growth with an inventory of high quality drilling locations
across its Onshore and Offshore East Coast acreage.
Bruce Dingwall, CBE, Executive Chairman of Trinity,
commented:
"Trinity's West Coast portfolio played a significant role in the
early evolution of the Company. However, greater shareholder value
can now be delivered by focusing our financial and management
resources on driving forward a focused onshore and offshore
portfolio with a robust reserve base, substantial production growth
opportunities and significant further resource potential."
Additional Required Information
The (audited) carrying book value of the assets as at 31
December 2016 is made up of property plant and equipment totalling
US$1.6 million, and a net decommissioning liability (using a
decommissioning methodology specific to Trinity) of US$3.5 million
that combine to reflect a net negative carrying value of US$1.9
million. The carrying value of the West Coast Assets have been
impaired by US$24.2 million over the three financial years that
ended on 31 December 2016, mainly due to a reduction in 2P reserves
following the significant oil price decline.
Losses (before taxes and any extraordinary items) attributable
to the West Coast Assets for the twelve month period ended 31
December 2016 were US$2.1 million.
Competent Person's Statement
The information contained in this announcement has been reviewed
and approved by Graham Stuart, the Company's Technical Advisor who
has 34 years of relevant global experience in the oil industry. Mr.
Stuart holds a BSC (Hons) in Geology. Reserves and resources in
this announcement are based on internal management estimates in
accordance with SPE PRMS guidelines (Petroleum Resources Management
System 2007 & Revisions).
Enquiries:
Trinity Exploration & Production Tel: +44 (0) 131 240
3860
Bruce Dingwall, Executive Chairman
Tracy Mackenzie, Head of Corporate Development
SPARK Advisory Partners Limited (Nominated Tel: +44 (0) 20 3368
& Financial Adviser) 3550
Mark Brady
Miriam Greenwood
Sean Wyndham-Quin
Cantor Fitzgerald Europe (Broker) Tel: +44 (0) 20 7894
7000
David Porter
Sebastien Maurin
Walbrook PR Limited trinityexploration@walbrookpr.com or Tel: +44
(0) 20 7933 8780
Nick Rome
Gary Middleton
About Trinity (www.trinityexploration.com)
Trinity is an independent oil and gas exploration and production
company focused solely on Trinidad and Tobago. Trinity operates
producing and development assets both onshore and offshore, in the
shallow water West and East Coasts of Trinidad. Trinity's portfolio
includes current production, significant near-term production
growth opportunities from low risk developments and multiple
exploration prospects with the potential to deliver meaningful
reserves/resources growth. The Company operates all of its nine
licences and, across all of the Group's assets, management's
estimate of 2P reserves as at the end of 2016 was 21.3 mmbbls
(excluding the Guapo-1 license which was disposed of in April
2016). Group 2C contingent resources are estimated to be 21.1
mmbbls. The Group's overall 2P plus 2C volumes are therefore 42.3
mmbbls.
Trinity is quoted on the AIM market of the London Stock Exchange
under the ticker TRIN.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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