TIDMTRIN
RNS Number : 3011B
Trinity Exploration & Production
07 October 2020
Dissemination of a Regulatory Announcement that contains inside
information according to
REGULATION (EU) No 596/2014 (MAR).
Trinity Exploration & Production plc
("Trinity" or "the Company" or "the Group")
Trinidad and Tobago Budget Highlights
Announcement of Significant SPT Reform
Trinity Exploration & Production plc (AIM: TRIN), the
independent E&P company focused on Trinidad and Tobago notes
the Government of Trinidad and Tobago's proposed reforms
encouraging investment in the energy sector included in the 2020
Budget Statement delivered on Monday evening.
The Statement contained proposed notable changes with regards to
Supplemental Petroleum Tax ("SPT"), particularly for small
producers and mature fields, with a view to encouraging investment
and job creation, effective from 1 January 2021. Specifically:
-- The threshold for the imposition of SPT will be lifted from
$50/bbl to $75/bbl for fiscal years 2021 and 2022;
-- This increased threshold will apply to small onshore
producers (understood to be where the asset/licence produces less
than 2,000 bopd) and is also expected to apply to small mature
offshore fields;
-- The new SPT regime will be reviewed, for continuation at this
threshold level, at the end of the two year period.
SPT is currently applied to crude oil production when
realisations average over US$50.01/bbl in any given calendar
quarter. This significantly impacts economic returns, particularly
when oil price realisations are between US$50.01 and US$60.00, and
has therefore been a major constraint on investment.
Impact
Trinity believes that, as a result of these proposed changes,
none of its six Onshore assets/fields would be subject to SPT
should oil price realisations reside in the US$50-US$75/bbl range.
Furthermore, the Minister indicated that a similar provision would
also be made available to small offshore production assets. Given
that Trinity's offshore assets/fields are both mature and below the
2,000 bopd onshore threshold, Trinity's expectation is that its
offshore producing assets are also likely to qualify for the new
threshold rates.
The Budget changes to SPT, when implemented, will significantly
improve our ability to generate sustainable cash flows,
particularly in the US$50-US$75/bbl range, and therefore to invest
to grow production and deliver attractive returns for shareholders.
The changes will also improve the Company's ability to hedge more
effectively against low oil prices and, particularly if enacted for
the longer term, to employ a prudent level of financial leverage to
lower our cost of capital.
In addition, given Trinity's low cost base, balance sheet
strength and operational expertise, the Company is extremely well
positioned to act as a consolidator of further small fields in
Trinidad & Tobago. This budget change is highly encouraging for
Trinity as it looks to broaden its portfolio with bolt-on
acquisitions and new licence awards.
Bruce Dingwall CBE, Executive Chairman of Trinity,
commented:
"The proposed Budget reform of the SPT regime is extremely
positive for Trinity, and for all the smaller oil producers
operating in Trinidad.
"Meaningful reform to the SPT regime will enhance the economic
returns to all stakeholders; the T&T Government, Heritage, the
supply chain and the people of T&T. Through such reforms, which
are happening globally, incentivising increased activity and
greater oil production will lead to maximising recovery from our
reservoirs - which in turn will lead to enhanced employment
opportunities and a step-change in potential cash generation levels
and returns for operators.
"There is still work to be done to finalise the legislation and
Trinity, alongside the various lobbying chambers in Trinidad, as
encouraged by the Minister of Finance, will continue to provide
input to the drafting of the Bill in the coming weeks and
months.
"Meaningful change to SPT has been a long time coming and I must
thank the Government for taking this important step to stimulate
oil production activity in Trinidad. The Government has done this
against the difficult backdrop of the conditions that the COVID-19
pandemic has created and as such, it sends a clear signal as to the
importance of the oil sector to Trinidad."
Enquiries
Trinity Exploration & Production
Bruce Dingwall, Executive Chairman
Jeremy Bridglalsingh, Managing Director
Tracy Mackenzie, Corporate Development
Manager +44 (0)131 240 3860
SPARK Advisory Partners Limited (NOMAD
& Financial Adviser)
Mark Brady +44 (0)20 3368 3550
Cenkos Securities PLC (Broker)
Joe Nally (Corporate Broking) +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Walbrook PR Limited trinityexploration@walbrookpr.com
Nick Rome +44 (0)20 7933 8780
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 2019 was 20.9 mmbbls.
Group 2C contingent resources are estimated to be 20.1 mmbbls. The
Group's overall 2P plus 2C volumes are therefore 41.1 mmbbls.
Trinity is listed on the AIM market of the London Stock Exchange
under the ticker TRIN.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCBCBDGCGGDGGL
(END) Dow Jones Newswires
October 07, 2020 02:00 ET (06:00 GMT)
Trinity Exploration & Pr... (LSE:TRIN)
Historical Stock Chart
From Sep 2024 to Oct 2024
Trinity Exploration & Pr... (LSE:TRIN)
Historical Stock Chart
From Oct 2023 to Oct 2024