Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, provides an update on operations for the three-month period ended 30 September 2023 ("Q3 2023" or "the Period"). The information contained herein has not been audited and may be subject to further review and amendment.
Jacobin-1 Discovery
Following the Jacobin oil discovery in the Palo Seco area onshore Trinidad, announced on 7 August 2023, the well was cased to 10,021 feet in preparation for production testing.
A heavy-duty workover rig, Rigtech Rig #9, mobilised to the wellsite and perforated the lower-most of three oil-bearing zones on 30 September 2023. The well came on at an encouraging rate during the initial clean-up phase but in doing so produced sand which has temporarily plugged the well. We recovered a high quality, light oil (35o API) from this lower reservoir. The reservoir and wellhead pressures, in addition to the rate achieved, are highly encouraging and we continue with operations to bring on production from this deep and highly pressurised reservoir.
The well flowed a total of 113 barrels (34 bbls oil and 79 bbls completion fluid) over a seven-hour period prior to a sand plug forming in the well. If sustained, this would be a highly encouraging result however the period is too limited to provide a reliable indication of the potential production flow rates from this zone.
The post-perforation closed-in wellhead pressure was 2250psi, which matches our pre-perforation expected pressures based on a reservoir pressure of 7500psi. Flowing pressure on 4/32" choke was 1800psi.
Trinity is deploying a coiled-tubing unit to clean-out the well and bring it back into production. We expect work to unplug the well to be followed by a period of production optimisation as we adjust the choke to achieve sustained flow.
Trinity plans to carry out extensive testing of all three discovered oil-bearing horizons in the deeper exploration section of Jacobin to establish reliable and meaningful data over an extended period. The Company will provide details of the flow test data when this information is available.
The oil produced was sold to Heritage Petroleum Company Limited under the current sales arrangement within the PS4 Lease Operating Agreement.
Given that the well has taken longer to drill and the well testing programme now contemplates three zones, we expect that the total cost for drilling, completion and testing will exceed the previously guided capital expenditure ranges for Jacobin. A final update on the costs associated with Jacobin, will be provided once finalised.
Q3 2023 Operational Highlights
· Q3 2023 sales volumes averaged 2,705 bopd (Q2 2023: 2,824 bopd). Production was lower than planned over the quarter due to extended downtime on a key well in the Trintes field which is now back online.
· Production Sales Guidance for the full year 2023 is updated to 2,800 bopd - 2,900 bopd (previously 2,800 - 3,100 bopd).
· During Q3 2023:
- 37 workovers (Q2 2023: 16; Q3 2022: 32) were completed.
- there were no recompletions ("RCPs") in the Period (Q2 2023: 1; Q3 2022: 5).
- swabbing operations continued across onshore and West Coast assets.
Q3 2023 Financial Highlights
The Group reports its consolidated financial information half yearly, in its Annual Report & Accounts and Interim Results, in accordance with UK adopted International Accounting Standards and the London Stock Exchange's AIM Rules for Companies. Quarterly, the Company provides unaudited information for guidance.
· Average realisation of USD 72.5/bbl for Q3 2023 (Q2 2023: USD 63.7/bbl, Q3 2022: USD 84.3/bbl).
· EBITDA, pre-hedging1, in Q3 2023 of USD 4.6 million (unaudited) (Q2 2023: USD 4.5 million (unaudited); Q3 2022 USD 8.7 million).
· Operating break-even2, pre-hedging1, Q3 2023 of USD 42.27/bbl (Q2 2023 of USD 34.8/bbl; Q3 2022 USD 32.2/bbl). This increased Q3 operating break-even is due mainly to lower Q3 sales volumes and this is expected to be temporary.
1 The Company has no hedging in place in 2023.
2 Operating break-even is the realised price/bbl where the adjusted EBITDA/bbl for the Group is equal to zero.
· Cash balance of USD 8.4 million (unaudited) at 30 September 2023 versus USD 11.3 million (unaudited) at 30 June 2023 and USD 16.5 million (unaudited) at 30 September 2022.
· The Group had drawn borrowings (overdraft) of USD 2.0 million at 30 September 2023 (USD 2.0 million at 30 June 2023 and USD 2.7 million at 30 September 2022).
