Source - RNS
RNS Number : 8795K
Trinity Exploration & Production
27 September 2016
 

 Trinity Exploration & Production plc

(the "Company" or "Trinity"; AIM:TRIN)

 

Interim Results

 

27th September 2016

 

Trinity Exploration & Production Plc ("Trinity"), an independent E&P company focused on Trinidad & Tobago, announces its unaudited interim results for the six months ended 30th June 2016 ("the period").

 

 

Operating highlights

 

·      With no capital investment aimed towards increasing production, Trinity's subsidiaries (together "the Group") average H1 2016 net production levels declined 14% to 2,659 boepd (H1 2015: 3,085 boepd). Net Q2 2016 production averaged 2,661 boepd

·      Continued success in establishing a leaner, more efficient operating cost base with pre-tax operating expenditure ("OPEX") reduced by 27% year-on-year to USD 8.7 million (H1 2015: USD 12.0 million)

·      General and Administrative ("G&A") costs reduced by 68% year-on-year to USD 1.8 million (H1 2015: USD 5.7 million)

 

 

Financial highlights

 

·      Average realised oil price of USD 32.8/bbl for 2016 (H1 2015: USD 50.0/bbl)

·      Revenues of USD 16.1 million (H1 2015: USD 27.8 million)

·      EBITDA before exceptional items of USD 1.5  million (H1 2015: USD 1.6  million)

·      Cash balance at period end of USD 5.1 million (H1 2015: USD 8.2 million)

 

 

Strategic highlights

 

·      In April 2016, Trinity completed the sale of the Company's 100% interest in the Guapo-1 ('GU-1") block for a cash consideration of USD 2.8 million, making a gain of USD 0.9 million. Proceeds from the sale were predominately used to service the Company's outstanding senior debt.

·      On 16th August 2016, Trinity's Trinidad and Tobago incorporated wholly-owned subsidiaries Trinity Exploration and Production (Trinidad and Tobago) Limited, Galeota Oilfield Services Limited, Trinity Exploration and Production (Galeota) Limited, Tabaquite Exploration & Production Company Limited, Trinity Exploration and Production (GOP) Limited, Trinity Exploration and Production (GOP-1B) Limited,  Oilbelt Services Limited, Trinity Exploration and Production Services Limited and Ligo Ven Resources Limited (the "Subsidiaries" and each a "Subsidiary") filed a notice of intention ("NOI") to make a proposal to creditors under the Trinidad and Tobago Bankruptcy and Insolvency Act Chapter 9:70 ("BIA"). The BIA allows a company to continue operating while it submits its proposal to reach a settlement with its outstanding creditors.

·      The filing of the NOI provides the Subsidiaries with a stay of proceedings with their creditors and means that no entity may terminate or amend an agreement or claim an accelerated payment under any agreement with any Subsidiary by reason only that such Subsidiary is insolvent or that a notice of intention or proposal has been filed.

·      Trinity believes that the Subsidiaries making a proposal to creditors and benefiting from the stay on proceedings provides the most efficient and orderly route to concluding its restructuring negotiations with potential funders and securing a refinancing to the benefit of all stakeholders.

 

 

 

 

Outlook

 

Key priorities for the Company are to:

 

·    Finalise a refinancing solution to reach a settlement with creditors and fund the Company's future developments

·      Achieve operating breakeven level across the onshore fields of below USD 15/bbl and all other fields of below USD 30/bbl by the end of 2016

 

Further to the refinancing initiative announced in March 2016, Trinity is in advanced discussions with a number of parties. Trinity's shareholders are advised that, whilst Management is encouraged by progress to date, there can be no certainty that any refinancing, offer or other transaction will result from these discussions or as to the terms on which any refinancing, offer or other transaction may be made.

 

Bruce A. I. Dingwall CBE, Executive Chairman of Trinity, commented:

 

"Trinity has continued to exceed its targets to reduce our OPEX and G&A with year-on-year reductions of 27% and 68% respectively.  The hard work of the team continues to bring about strong cost efficiencies, enabling our business to reduce net losses significantly and maintain positive cash flow at an operating level, despite the backdrop of a dramatically reduced oil price, reduced production levels and no capital investment aimed towards production.

 

Our current production rates and drastically reduced cost base continue to provide strong testimony to not only the quality of the asset base, but also to the resilience, operational expertise and organisational efficiency in coping with a radically reduced budget. This successful cost model and operating mantra provides a strong foundation and confidence in Trinity's ability to move forward and grow in a steady state environment. Across the Onshore, West Coast and East Coast production areas we have an inventory of drilling locations that could enhance production levels on the deployment of capital.

 

Reaching a satisfactory agreement with our creditors will enable Trinity to continue to employ and utilise the services of significant numbers of employees and contractors and contribute to the economy of Trinidad and Tobago. Trinity takes great pride in being a locally managed company and the close working relationships this fosters. It is the forbearance, goodwill and collegiate approach of many of our stakeholders that has enabled Trinity to sustain operations and we look forward to maintaining a working relationship in the future.

 

On behalf of the Board, I would like to express our thanks to all of our various stakeholders and to Trinity's staff for their continued commitment and hard work to sustain and maximise the portfolio's value." 

 

This announcement contains information which, prior to its disclosure, was inside information for the purposes of the Market Abuse Regulation.

 

Enquiries

 

Trinity Exploration & Production

Bruce Dingwall, Executive Chairman

Tracy Mackenzie, Head of Corporate Development

 

 

Tel: +44 (0) 131 240 3860

 

 

SPARK Advisory Partners Limited (NOMAD & Financial Adviser)

Mark Brady

Miriam Greenwood

Sean Wyndham-Quin

 

Tel: +44 (0) 203 368 3550

Cantor Fitzgerald Europe (Broker)

David Porter

Sarah Wharry

 

Tel: +44 (0) 207 894 7000

 

 

 

 

 

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.

 

About Trinity

 

Trinity is an independent E&P 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 licences and has 2P reserves of 21.8 mmbbls according to Management estimates as at 31 December 2015.  Trinity is listed on the AIM market of the London Stock Exchange under the ticker TRIN.

 

OPERATIONS REVIEW

 

During the second quarter, Trinity's net production averaged 2,661 boepd, (Q2 2015: 2,939 boepd).  For the first half of 2016 the Group's average net production was 2,659 boepd (H1 2015: 3,085 boepd) equating to a 14% decline from the previous year. 

 

Onshore operations

 

Average H1 2016 production from the Onshore assets was 1,430 boepd (H1 2015: 1,691 boepd). The decrease in production volumes resulted from natural decline rates coupled with limited funding to maintain output. The GU-1 block that was averaging 57 bopd (H1 2015: 80 boepd) was sold on 24th May 2016. Swabbing activity resumed in the Tabaquite block in May and June for an average production of 23 bopd. There were 33 workovers conducted in H1 2016 (H1 2015: 43 workovers).  No drilling or recompletions "RCP's" were carried out in H1 2016 (H1 2015: one RCP)

 

East Coast operations

Average H1 2016 production from the East Coast assets was 1,018 boepd (H1 2015: 1,010 boepd).  Two workovers completed at the end of 2015 contributed to the maintenance of the base production on the East Coast. No drilling, RCP's or workovers were carried out during H1 2016. The continued retention of such stable production levels, at a time when no capital has been deployed towards new drilling, testifies to the technical capability and the knowledge of the operations within Trinity's team. Moving forward, new drilling could significantly grow the production base, with a significant inventory of new well locations in place and drill ready.

West Coast operations

 

Average H1 2016 net production from the West Coast assets was 211 boepd (H1 2015: 384 boepd). No drilling, RCP's or workovers were carried out in H1 2016. The shortfall in West Coast production levels was largely due to the limited cash resources of the Group to workover the main producing ABM 151 well which has been shut-in. This well is also the largest producer of gas, which is used to lift crude oil in the Brighton field. The workovers of ABM 150 and ABM 151 continue to represent significant near-term and very low-risk opportunities for improving production in the future. At the Guapo Marine block, chemical treatment of some of the more viscous wells has been deferred.

 

FINANCIAL REVIEW

 

Income Statement Analysis

 

 

2016

2015

2015

 

 

30th June

30th June

31st December

Average production - net

bopd

2,659

3,085

2,896

Average realised oil price

$/bbl

32.8

50.0

45.5

 

 

 

 

 

Statement of Comprehensive Income

 

USD million

USD million

USD million

Revenues

 

16.1

27.8

48.2

Operating expenses

 

(17.0)

(29.1)

(55.3)

EBITDA

 

1.5

1.6

1.2

Operating loss

 

(0.9)

(1.3)

(7.1)

Exceptional items

 

1.1

(8.3)

(17.2)

Finance costs

 

(1.8)

(3.4)

(6.6)

EBDA

 

(0.3)

(1.8)

(5.4)

Loss before tax

 

(1.6)

(13.0)

(30.9)

Taxation charge

 

0.1

(2.8)

(27.0)

Currency translation

 

--

--

(0.6)

Loss after tax

 

(1.5)

(15.8)

(58.5)

 

Operating Revenues

 

Operating revenues of USD 16.1 million (H1 2014: USD 27.8 million) were generated. This 42% decrease was mainly attributable to the sharp fall in oil prices and, to a lesser extent, decreased production as there were funding constraints preventing investment in production related capital expenditure across all assets.

·      Crude oil prices: Trinity was affected by low oil prices during the first half of 2016, with an average realised price of USD 32.8/bbl (H1 2015: USD 50.0/bbl) with the realised prices increasing slightly in Q2 2016 compared to Q1 2016

 

Operating Expenses

 

Operating expenses of USD (17.0) million (H1 2015: USD (29.1) million) comprised the following:

              ·     Royalties of USD (4.0) million (H1 2015: USD (8.6) million) - decreased mainly due to lower oil prices;

              ·     Production costs of USD (8.7) million (H1 2015: USD (12.0) million). The Group adopted certain cost
          reduction initiatives to reduce the production costs and bring this in line with significantly reduced realised
          oil prices and declining production;

             ·      Depreciation, depletion and amortisation charges of USD (2.5) million (H1 2015: USD (2.9) million) were
          lower as the depreciable asset pool was reduced due to asset impairment; and certain assets remained
          classified as held for sale;

             ·     General and administrative (G&A) expenditure of USD (1.8) million (H1 2015: USD (5.7) million). The
         favourable variance reported in H1 2016 compared to H1 2015, is a result of reduced head office costs,
         mainly due to organisational restructuring

 

Operating Loss

 

The operating loss (before exceptional items) for the period amounted to USD (1.0) million (H1 2015: USD (1.3) million loss) and was mainly driven by a fall in crude oil prices

 

Exceptional items

 

Exceptional items of USD 1.1 million relates to a gain on the disposal of the GU-1 asset of USD 1.0 million, impairment of certain payable balances of USD (0.5) million and Fees in relation to the Formal Sale Process of USD (0.4) million

 

Net Finance Costs

 

Finance costs for the period totaled USD (1.8) million (H1 2015: USD (3.4) million). This is made up of  USD (0.9) million (H1 2015: USD (0.8) million) related to the unwinding of the discount rate on the decommissioning provision; interest on taxes of USD (0.5) million (H1 2015: USD (1.6) million); interest expense on loan facilities from Citibank (Trinidad & Tobago) Limited USD (0.4) million (H1 2015: USD (0.6) million); and Interest due to Centrica in relation to blocks 1a and 1b of nil cost in H1 2016 (H1 2015: USD (0.4) million.

 

Taxation

 

The Group has a deferred tax asset of USD 2.4 million (H1 2015: USD 27.6 million) on its Statement of Financial Position which it expects to recover in more than 12 months based on the expected taxable profits to be generated by Group companies.

 

For the first half of 2016 taxes amounted to USD 0.1 million credit (H1 2014: USD (2.8) million charge) which comprised:

·      Production taxes which amounted to USD 0.1 million (H1 2015: USD (2.1) million)

-    Petroleum Profits Tax: USD (0.3) million (H1 2015: USD (0.04) million)

-    Supplemental Petroleum Tax: USD 0.4 million credit (H1 2015: USD (2.1) million charge)

·      Other taxes:

-    Corporation tax of USD 0.0 million (H1 2015: USD (0.8) million)

 

The total outstanding taxation balances at the end of H1 2016 was USD 17.3 million (H1 2015: USD 22.9 million) the reductions were mainly achieved by applying Value Added Tax refunds due to the Group as payment. 

 

Total Comprehensive Loss

 

Trinity recorded a Total Comprehensive Loss of USD (1.5) million (H1 2015: USD (15.8) million loss) for the period ended 30th June 2016. Adjusted for exceptional items, Trinity recorded a Total Comprehensive Loss of USD (2.6) million (H1 2015: USD (7.5) million loss).

 

Cash Flow Analysis

 

 

2016

2015

2015

 

 

30th June

30th June

31st December

Statement of Cashflows

 

USD million

USD million

USD million

Opening cash balance

 

8.2

33.1

33.1

Cash (outflow)/inflow from operating activities

 

(1.1)

(1.1)

2.5

Net cash outflow from investing activities

(0.0)

(1.2)

(2.2)

Net cash outflow from financing activities

(2.0)

(22.6)

(25.2)

Closing cash balance

 

5.1

8.2

8.2

 

Trinity began the year with an initial cash balance of USD 8.2 million (2015: USD 33.1 million).

 

For the period ending 30th June 2016, Trinity's net cash outflow from operating activities was USD 1.1 million (H1 2015: USD 1.1 million outflow).

 

During the period Trinity experienced working capital outflows of USD 4.0 million (H1 2015: USD 2.0 million outflow) which was affected by payments to suppliers and taxes but was compensated by the disposal of GU-1 block. Significant changes are outlined in the table below.

                                               

All figures in  USD'000

H1 2016

                    H1 2015

 

Uses of Cash

Sources of Cash

Uses of Cash

Sources of Cash

Inventory

 

68

 

5,238

Assets held-for-sale

 

1,926

 

104

Trade and other receivables

3,774

 

3,557

 

Trade and other payables

681

 

3,695

 

Taxation Paid

1,542

 

53

 

 

Change in Working Capital

 

(4,003)

 

(1,963)

 

Trinity paid taxes of USD 1.5 million (comprising mainly corporate taxes) in the first half of 2016 (H1 2015: USD 0.05 million).

 

Investing Activities

 

For the first half of 2016, Trinity incurred little to no capital expenditures of USD 0.02 million (H1 2015: USD 1.2 million) comprising computers and equipment. 

 

Financing Activities

 

·        Trinity made principal repayments totaling USD 1.1 million (H1 2015: USD 20.0 million) on its Citibank (Trinidad & Tobago) Limited loan facility

·        Finance costs amounted to USD 1.0 million (H1 2014: USD 2.5 million)

 

Closing Cash Balance

 

Trinity's cash balances at 30th June 2016 were USD 5.1 million (H1 2015: USD 8.2 million).

 

 

 

Bruce A. I. Dingwall                

Executive Chairman    

 

STATEMENT OF DIRECTORS' RESPONSIBILITY

 

 

The Directors' confirm that this condensed consolidated interim financial information has been prepared in accordance with IAS 34 as adopted by the European Union and that the interim management report includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely:

 

·      an indication of important events that have occurred during the first six months and their impact on the condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and

·      the management report, which is incorporated into the directors' report, includes a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they face; and

·      material related party transactions in the first six months and any material changes in the related-party transactions described in the last annual report.

 

A list of the current Directors is maintained on the Trinity Exploration & Production plc website www.trinityexploration.com.

 

 

By order of the Board

 

 

Bruce A. I. Dingwall

Executive Chairman

 

 

 

 

 

 

Trinity Exploration & Production plc

 

Condensed Consolidated Interim Financial Statements

 

 

For the period ended 30th June 2016

 

 

 

 

 

 

 

Trinity Exploration & Production plc

 

Condensed Consolidated Statement of Comprehensive Income

for the period ended 30th June 2016

(Expressed in United States Dollars)

 

 

Notes

6 months to 30th June 2016

 

6 months to 30th June 2015

 

Year ended  December 2015

 

 

 

$'000

 

$'000

 

$'000

 

 

(unaudited)

 

(unaudited)

 

(audited)

Operating Revenues

 

 

 

 

 

 

Crude oil sales

 

16,074

 

27,752

 

48,180

Other income

 

--

 

66

 

30

 

 

16,074

 

27,818

 

48,210

 

 

 

 

 

 

 

Operating Expenses

 

 

 

 

 

 

Royalties

 

(4,043)

 

(8,585)

 

(14,571)

Production costs

 

(8,699)

 

(11,963)

 

(21,966)

Depreciation, depletion and amortisation

6

(2,450)

 

(2,897)

 

(8,219)

General and administrative expenses

 

(1,827)

 

(5,678)

 

(10,497)

 

 

(17,019)

 

(29,123)

 

 

(55,253)

 

 

 

 

 

 

 

Operating Loss

 

(945)

 

(1,305)

 

(7,043)

 

 

 

 

 

 

 

Exceptional items

4

1,064

 

(8,289)

 

(17,229)

Exploration cost write off

 

--

 

--

 

--

 

 

 

 

 

 

 

Finance Income

 

--

 

1

 

--

 

 

 

 

 

 

 

Finance Costs

 

(1,763)

 

(3,405)

 

(6,675)

 

 

 

 

 

 

 

Loss Before Taxation

 

(1,644)

 

(12,998)

 

(30,947)

 

 

 

 

 

 

 

Taxation Charge

5

143

 

(2,846)

 

(26,976)

 

 

 

 

 

 

 

Loss for the period

 

(1,501)

 

(15,844)

 

(57,923)

 

 

 

 

 

 

 

Other Comprehensive Income

 

 

 

 

 

 

Currency Translation

 

(25)

 

24

 

(597)

 

 

 

 

 

 

 

Total Comprehensive Loss for the period

 

(1,526)

 

(15,820)

 

(58,520)

 

 

 

 

 

 

 

 

 

 

Earnings per share (expressed in dollars per share)

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

14

(0.02)

 

(0.17)

 

(0.62)

Diluted

14

(0.02)

 

(0.17)

 

(0.62)

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

Trinity Exploration & Production plc

 

Condensed Consolidated Statement of Financial Position

for the period ended 30th June 2016

(Expressed in United States Dollars)

 

 

Notes

As at 30th June 2016

 

As at 30th June 2015

 

As at 31st December 2015

ASSETS

 

$'000

 

$'000

 

$'000

 

 

(unaudited)

 

(unaudited)

 

(audited)

Non-current Assets 

 

 

 

 

 

 

Property, plant and equipment

6

58,600

 

48,722

 

46,143

Intangible assets

7

25,823

 

26,805

 

26,751

Deferred tax asset

 

2,375

 

27,630

 

2,460

 

 

86,798

 

103,157

 

 

75,354

Current Assets

 

 

 

 

 

 

Inventories

11

3,894

 

6,671

 

3,962

Trade and other receivables

 

9,587

 

18,361

 

10,593

Assets held-for-sale

12

11,039

 

34,691

 

30,491

Taxation recoverable

 

--

 

548

 

192

Cash and cash equivalents

 

5,112

 

8,197

 

8,200

 

 

29,632

 

68,468

 

 

53,438

Total Assets

 

116,430

 

171,625

 

 

128,792

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital and Reserves Attributable to Equity Holders

 

 

 

 

 

 

Share capital

8

94,800

 

94,800

 

94,800

Share premium

8

116,395

 

116,395

 

116,395

Share warrants

 

71

 

71

 

71

Share based payment reserve

 

12,178

 

12,006

 

12,178

Reverse acquisition reserve

 

(89,268)

 

(89,268)

 

(89,268)

Merger reserves

 

75,467

 

75,467

 

75,467

Translation reserve

 

(1,583)

 

287

 

(557)

Accumulated (deficit)

 

(190,518)

 

(146,914)

 

(188,993)

Total Equity

 

17,542

 

62,844

 

20,093

 

 

 

 

 

 

 

Non-current Liabilities

 

 

 

 

 

 

Borrowings

9

--

 

--

 

--

Provision for other liabilities

10

28,858

 

19,255

 

19,831

Deferred tax liability

 

3,161

 

3,751

 

3,308

 

 

32,019

 

23,006

 

 

23,139

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

Trade and other payables

 

23,611

 

28,547

 

25,274

Provision for other liabilities

 

1,863

 

--

 

1,930

Borrowings

9

11,950

 

13,000

 

13,000

Liabilities held-for-sale

12

12,170

 

21,286

 

21,927

Taxation payable

 

17,275

 

22,942

 

23,429

 

 

66,869

 

85,775

 

 

85,560

Total Liabilities

 

98,888

 

108,781

 

 

108,699

Total Shareholders' Equity and Liabilities

 

116,430

 

171,625

 

 

128,792

 

 

 

 

Trinity Exploration & Production plc

 

Condensed Consolidated Statement of Changes in Equity

for the period ended 30th June 2016

(Expressed in United States Dollars)

 

 

Share Capital

Share Premium

Share Warrant

Share Based Payment Reserve

Reverse Acquisition Reserve

Merger Reserve

Translation Reserve

Accumulated Deficit

Total

 

 

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

 

 

 

 

 

 

 

 

 

 

 

 

Balance at 30th June 2015 (unaudited)

94,800

116,395

71

12,006

(89,268)

75,467

287

(146,914)

62,844

 

Share based payment charge

--

--

--

172

--

--

--

--

172

 

Translation difference

--

--

--

--

--

--

(844)

--

(844)

 

Comprehensive Loss for the year

--

--

--

--

--

--

--

(42,079)

(42,079)

 

 

 

 

 

 

 

 

 

 

 

 

Balance at end of 2015 (audited)

94,800

116,395

71

12,178

(89,268)

75,467

(557)

(188,993)

20,093

 

 

 

 

 

 

 

 

 

 

 

 

Share based payment charge

--

--

--

--

--

--

--

--

 

 

Translation difference

--

--

--

--

--

--

(1,001)

--

(1,001)

 

Comprehensive Loss for the year

--

--

--

--

--

--

(25)

(1,501)

(1,526)

 

Balance at 30th June 2016 (unaudited)

 

94,800

 

116,395

 

71

 

12,178

 

(89,268)

 

75,467

 

(1,583)

 

(190,518)

 

17,566

 

                       

 

Trinity Exploration & Production plc

 

Condensed Consolidated Statement of Cashflows for the period ended 30th June 2016

(Expressed in United States Dollars)

 

 

Notes

6 months to 30th June 2016

 

6 months

to 30th June 2015

 

Year ended 31st December 2015

 

 

$'000

 

$'000

 

$'000

 

 

(unaudited)

 

(unaudited)

 

(audited)

Operating Activities

 

 

 

 

 

 

Loss before taxation

 

(1,644)

 

(12,998)

 

(30,947)

Adjustments for:

 

 

 

 

 

 

Translation difference

 

735

 

(110)

 

841

Finance cost

 

917

 

2,639

 

5,151

Share options granted

 

49

 

172

 

344

Finance cost - decommissioning provision

10

846

 

766

 

1,524

Finance income

 

--

 

(1)

 

--

Depreciation, depletion and amortisation

6

2,450

 

2,897

 

8,219

Written off  of 1a and 1b pre-acquisition cost

4

--

 

6,055

 

6,385

Loss on disposal of inventory

4

--

 

1,302

 

1,302

Loss on disposal of asset

4

--

 

108

 

108

Impairment on property, plant and equipment

4

--

 

--

 

2,559

Impairment of intangibles

4

--

 

--

 

131

 

Provision for restructuring

 

--

 

--

 

1,943

 

 

Impairment of payables

 

(447)

 

--

 

--

Impairment of receivables

 

--

 

--

 

1,036

 

Impairment of inventory

 

--

 

--

 

2,483

 

 

2,906

 

830

 

1,079

 

 

 

 

 

 

 

Changes In Working Capital

 

 

 

 

 

 

Inventory

 

68

 

5,238

 

5,541

Assets held for sale

12

1,926

 

104

 

104

Trade and other receivables

 

(3,774)

 

(3,557)

 

2,785

Trade and other payables

 

(681)

 

(3,695)

 

(6,910)

 

 

445

 

(1,080)

 

2,599

 

 

 

 

 

 

 

Taxation paid

 

(1,542)

 

(53)

 

(114)

Net Cash (Outflow)/ Inflow From Operating Activities

 

 (1,097)

 

(1,133)

 

 

2,485

 

 

 

 

 

 

 

Investing Activities

 

 

 

 

 

 

Purchase of exploration and evaluation assets

7

--

 

(1,129)

 

(1,206)

Purchase of  property, plant & equipment

6

(24)

 

(87)

 

(1,012)

Net Cash Inflow/(Outflow) From Investing Activities

 

(24)

 

(1,216)

 

(2,218)

 

 

 

 

 

 

 

Financing Activities

 

 

 

 

 

 

Finance income

 

--

 

1

 

--

Finance cost - borrowings

 

(917)

 

 (2,539)

 

(5,151)

Repayments of borrowings

9

(1,050)

 

(20,000)

 

   (20,000)

Net Cash Outflow From Financing Activities

 

(1,967)

 

(22,538)

 

 

(25,151)

 

 

 

 

 

 

 

Decrease in Cash and Cash Equivalents

 

(3,088)

 

(24,887)

 

(24,884)

Cash And Cash Equivalents

 

 

 

 

 

 

At beginning of period

 

8,200

 

33,084

 

33,084

Decrease

 

 

(3,088)

 

(24,887)

 

(24,884)

At end of period

 

5,112

 

8,197

 

8,200

                 

 

Trinity Exploration & Production plc

 

Notes to the Condensed Consolidated Financial Statements for the period ended 30th June 2016

 

1    Background and Accounting Policies

 

     Background

 

Trinity Exploration & Production plc ("Trinity") is incorporated and registered in England and trades on the Alternative Investment Market ("AIM"), a market operated by London Stock Exchange plc.  Trinity ("the Company") and its subsidiaries (together "the Group") are involved in the exploration, development and production of oil and gas reserves in Trinidad.

 

Basis of Preparation
 

These condensed interim financial statements for the six months ended 30th June 2015 have been prepared in accordance with IAS 34, 'Interim financial reporting', as adopted by the European Union, on a going concern basis. The condensed interim financial statements should be read in conjunction with the annual financial statements for the year ended 31st December 2015, which have been prepared in accordance with IFRSs as adopted by the European Union.

 

The results for the six months ended 30th June 2016 and 30th June 2015 are unaudited and do not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 31st December 2015 were approved by the board of directors and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, and contains an emphasis of matter paragraph.

 

Going Concern

 

In making their going concern assessment, the Directors have considered the Group's budget and cash flow forecasts.  On 16th August 2016, the Company's Trinidad and Tobago wholly-owned subsidiaries Trinity Exploration and Production (Trinidad and Tobago) Limited, Galeota Oilfield Services Limited, Trinity Exploration and Production (Galeota) Limited, Tabaquite Exploration & Production Company Limited, Trinity Exploration and Production (GOP) Limited, Trinity Exploration and Production (GOP-1B) Limited,  Oilbelt Services Limited, Trinity Exploration and Production Services Limited and Ligo Ven Resources Limited (the "Subsidiaries" and each a "Subsidiary") filed notice of intention ("NOI") to make a proposal to creditors under the Trinidad and Tobago Bankruptcy and Insolvency Act Chapter 9:70 ("BIA").  The BIA allows the Subsidiaries to continue operating while they submits their proposal to reach a settlement with their outstanding creditors. The filing of the NOI provides the Subsidiaries with a stay of proceedings from all of their creditors and means that no person may terminate or amend an agreement or claim an accelerated payment under any agreement with any Subsidiary by reason only that such Subsidiary is insolvent or that a notice of intention or proposal has been filed.

 

The Group has also filed a projected cash flow with the office of the Supervisor of Insolvency in Trinidad and Tobago which shows the ability of the Subsidiaries to operate for at least the next 12 months from the date of filing the NOI.

 

The Subsidiaries have 30 days to 6 months to submit a proposal to their creditors' in respect of past liabilities.  At the date of approving the condensed consolidated financial statements, the proposal to creditors has not been concluded.  Management expects the outcome to be positive as it provides the best alternative available in the interest of its creditors.

 

The Group is also in discussions with a number of interested parties about a refinancing of the Group.  Such a refinancing is required in order for the Group and Company to continue as a going concern.

 

For this reason, the Board of Directors continues to adopt the going concern basis of preparing the financial statements.  However, the need for acceptance of the proposal along with additional funding indicates the existence of a material uncertainty which may cast significant doubt on the Company and the Group's ability to continue as a going concern and, therefore the Group and Company may be unable to fully realise their assets and discharge their liabilities in the normal course of business.  The financial statements do not include the adjustments that would be necessary if the Group and Company were unable to continue as a going concern. 


Accounting policies

 

The accounting policies adopted are consistent with those of the previous financial year, as set out in the consolidated financial statements for the year ended 31st December 2015, except for income taxes in the interim periods which are accrued using the tax rate that would be applicable to the expected total annual profit and loss.  The business is not affected by seasonality.

 

     There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial year beginning on or after 1st January 2016 that would be expected to have a material impact on the group. 

 

Estimates 


The preparation of interim financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates.

In preparing these condensed interim financial statements, the significant judgements made by management in applying the group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 31st December 2015.

Non-current assets (or disposal Groups) held for sale

Non-current assets (or disposal Groups) classified as held for sale are measured at the lower of carrying amount and fair value less costs to sell. Non-current assets and disposal Groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal Group) is available for immediate sale in its present condition. Management must be committed to the sale which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

    

2   Financial risk management

 

     Financial risk factors

     The Group's activities expose it to a variety of financial risks: market risk (including currency risk, fair value interest rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk.

 

     The condensed interim financial statements do not include all financial risk management information and disclosures required in the annual financial statements; they should be read in conjunction with the group's annual financial statements for 2015, which can be found at www.trinityexploration.com.  There have been no changes in the risk management department or in any risk management policies since the year end.

 

     Liquidity risk

     Compared to year end, there was no material change in the contractual undiscounted cash out flows for financial liabilities, except for the net decrease in borrowings of $1.05 million.

 

 

3   Operating segment information

 

     Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker.  The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the steering committee that makes strategic decisions.  Management have considered the requirements of IFRS 8, in regard to the determination of operating segments, and concluded that the Group has only one significant operating segment being the production, development and exploration and extraction of hydrocarbons in Trinidad.

 

     All revenue is generated from sales to one customer in Trinidad & Tobago: The Petroleum Company of Trinidad & Tobago (PETROTRIN).  All non-current assets of the Group are located in Trinidad & Tobago.

 

 

 

4   Exceptional Items

 

Items that are material either because of their size, their nature, or that are non-recurring are considered as exceptional items and are presented within the line items to which they best relate.  During the current period, exceptional items as detailed below have been included in the Statement of Comprehensive Income. An analysis of the amounts presented as exceptional items in these financial statements are highlighted below.

 

 

 

30th June 2016

30th June 2015

31st December 2015

 

$'000

$'000

$'000

Impairment of property, plant & equipment

--

--

(2,559)

Impairment of intangibles

--

--

(131)

Impairment of receivables

--

--

(1,036)

Loss on winding up of subsidiaries

--

(214)

(214)

Loss on disposal of asset

--

(108)

--

Loss on disposal of casing

--

(1,302)

(1,302)

Fees relating to Formal Sale Process

(350)

(610)

(1,086)

Written off  of 1a and 1b pre-acquisition cost (note 15 (4))

--

(6,055)

(6,385)

Gain on disposal of GU-1 Block                                                             

 963

            --

--

Loss on disposal of WD16 Block

--

--

(108)

Impairment of inventory

--

--

(2,483)

Impairment of payables

447

--

--

Translation difference

4

--

18

 

 

 

 

 

1,064

(8,289)

(17,229)

 

5  Taxation

a.   Taxation Charge

30th June 2016

30th June 2015

31st December 2015

 

$'000

$'000

$'000

Current tax

 

 

 

- Current period

 

 

 

Petroleum profits tax

307

38

(167)

Corporation tax

--

750

586

Supplemental petroleum tax

(418)

2,086

1,830

 

 

 

 

Deferred tax

 

 

 

- Current period

 

 

 

Movement in asset due to tax losses

--

--

25,170

Movement in liability due to accelerated tax depreciation

(32)

--

(470)

Unwinding of deferred tax on fair value uplift

--

(27)

--

Translation differences

--

(1)

27

Tax charge

(143)

2,846

26,976

    

    

 

30th June 2016

30th June 2015

31st December 2016

 

$'000

$'000

$'000

b.   Taxation payable

 

 

 

Petroleum Profits Tax/ Unemployment Levy

1,955

1,642

1,561

Corporation Tax

705

2,760

2,228

Supplemental Petroleum Tax

14,615

18,540

19,640

Taxation payable

17,275

22,942

23,429

 

The Group has a deferred tax asset of $2.4 million on its Statement of Financial Position which it expects to recover in more than 12 months based on the expected taxable profits generated by Group companies.

 

6   Property, Plant and Equipment

 

Land & Buildings

Oil & Gas Property

Plant & Equipment

Total

 

$'000

$'000

$'000

$'000

Opening net book amount at 1st January 2016

1,629

40,548

3,966

46,143

Additions

--

--

24

24

Depreciation, depletion and amortisation charge for period

(80)

(2,058)

(312)

(2,450)

Transferred from disposal group held for sale

279

15,988

226

16,493

Translation difference

(49)

(1,457)

(104)

(1,610)

Closing net book amount 30th June 2016

1,779

53,021

3,800

58,600

 

 

 

 

 

Period ended 30th June 2016

 

 

 

 

Cost

      2,975

       264,461

     12,232

  279,668

Accumulated depreciation, depletion, amortisation and impairment

     (1,147)

      (209,983)

      (8,328)

 (219,458)

Translation difference

         (49)

         (1,457)

        (104)

     (1,610)

Closing net book amount

1,779

53,021

3,800

58,600

 

 

Land & Buildings

Oil & Gas Property

Plant & Equipment

Total

 

$'000

$'000

$'000

$'000

Opening net book amount at 1st January 2015

2,334

78,347

4,974

85,655

Additions

3

55

29

87

Depreciation, depletion and amortisation charge for period

(73)

(2,231)

(593)

(2,897)

Transferred to disposal group held for sale

(430)

(33,236)

(457)

(34,123)

Closing net book amount 30th June 2015

1,834

42,935

3,953

48,722

 

 

 

 

 

Period ended 30th June 2015

 

 

 

 

Cost

2,333

178,400

6,779

187,512

Accumulated depreciation, depletion, amortisation and impairment

(499)

(135,465)

(2,826)

(138,790)

Closing net book amount

1,834

42,935

3,953

48,722

 

 

Land & Buildings

Oil & Gas Assets

Plant & Equipment

Total

 

$'000

$'000

$'000

$'000

Year ended 31st December 2015

 

 

 

 

Opening net book amount at 1st January 2015

2,334

78,347

4,974

85,655

Additions

(46)

530

528

1,012

Impairment1

--

(2,559)

--

(2,559)

Transferred to available for sale

(416)

(29,306)

(877)

(30,599)

Adjustment to decommissioning estimate

--

853

--

853

Depreciation, depletion and amortisation charge for year

(243)

(7,317)

(659)

(8,219)

Closing net book amount 31st December 2015

1,629

40,548

3,966

46,143

 

At 31st December 2015

 

 

 

 

Cost

2,696

248,473

11,982

263,151

Accumulated depreciation, depletion, amortisation and impairment

(1,067)

(207,925)

(8,016)

(217,008)

Closing net book amount

1,629

40,548

3,966

46,143

 

 

 

 

 

 

1 No impairment loss was recognised in respect of period ended 30th June 2016, in 2015 one cash generating unit ("CGU'") was impaired, (2015: $2.6 million). The recoverable amount was determined by estimating its fair value less costs to sell.

 

7   Intangible assets

 

Exploration and evaluation assets

 

$'000

At 1st January 2016

26,751

Translation difference

(928)

At 30th June 2016

25,823

 

 

 

 

 

 

At 1st January 2015

25,676

Additions

1,129

At 30th June 2015

26,805

 

 

At 1st January 2015

25,676

Additions

1,206

Impairment1

(131)

At 31st December 2015

26,751

 

An impairment loss of $0.1 million was recognised in 2015 following an impairment review on the carrying value of exploration and evaluation assets.

 

No further impairments were deemed necessary over the exploration and evaluation assets of the Group.

 

 

8   Share capital

 

 

Number of shares

Ordinary shares

$'000

Share premium

$'000

Total

 

$'000

As at 1st January 2016

 

94,799,986

94,800

116,395

211,195

As at 30th June 2016

 

94,799,986

94,800

116,395

211,195

 

9   Borrowings

 

 

30th June 2016

30th June 2015

31st December 2015

 

$'000

$'000

$'000

Current

11,950

13,000

13,000

Non-Current

--

--

--

 

11,950

13,000

13,000

 

Movements in borrowings are analysed as follows:

 

 

$'000

 

6 months ended 30th June 2016

 

Opening amount as at 1st January 2016

13,000

Repayments of borrowings

(1,050)

Closing amount as at 30th June 2016

11,950

 

 

6 months ended 30th June 2015

 

Opening amount as at 1st January 2015

33,000

Repayments of borrowings

(20,000)

 

 

Closing amount as at 30th June 2015

13,000

 

 

         

 

9  Borrowings (Continued)

 

Year ended 31st December 2015

 

Opening amount as at 1st January 2015

33,000

Repayment of borrowings

(20,000)

 

 

Closing balance at 31st December 2015

13,000

 

 

Citibank (Trinidad & Tobago) Limited Loan 1

 

The key terms of the loan are as follows:

·    Principal amount $20.0 million

·    Interest rate is set at three month US LIBOR plus 600 basis points per annum

·    Debenture over the fixed and floating assets of Trinity Exploration and Production (Trinidad and Tobago) Limited and its subsidiaries.

·    Principal repayment in equal quarterly instalments commencing on 20th March 2013 and ending on 20th December 2017

·    Interest payable monthly in arrears commencing on 20th March 2013

 

2016 Loan 1 Update

·    Principal payments of $1.0 million were made between 1st January 2016 to 30th June, 2016 due to Citibank

·     Quarterly interest payments remain in effect and were paid in March and June 2016

·    Outstanding balance of $11.0 million as at 30th June 2016Principal moratorium was given until 15th August 2016, subsequent to this on 16th August 2016 the Company's Trinidad and Tobago wholly-owned subsidiaries Trinity Exploration and Production (Trinidad and Tobago) Limited, Galeota Oilfield Services Limited, Trinity Exploration and Production (Galeota) Limited, Tabaquite Exploration & Production Company Limited, Trinity Exploration and Production (GOP) Limited, Trinity Exploration and Production (GOP-1B) Limited,  Oilbelt Services Limited, Trinity Exploration and Production Services Limited and Ligo Ven Resources Limited (the "Subsidiaries" and each a "Subsidiary") filed a notice of intention ("NOI") to make a proposal to creditors under the Trinidad and Tobago Bankruptcy and Insolvency Act Chapter 9:70 ("BIA"). During the proposal process, no further moratoriums are required.

 

Citibank (Trinidad & Tobago) Limited Loan 2

 

The Group negotiated a floating rate medium term facility on 17th August, 2013 of $25.0 million with Citibank (Trinidad and Tobago) Limited 'Citibank' which at 31st December, 2014 was fully drawdown. 

 

The key terms of the loan are as follows:

·     Principal amount $25.0 million. Initial drawdown on 22nd January 2014 of $5.0 million and a second drawdown of $20.0 million on 4th August 2014.

·     Interest rate is set at three month US LIBOR plus 575 basis points per annum.

·     The negotiated principal repayments in two initial quarterly instalments of 16.0% following 6.5% to 7.0% quarterly instalments commencing on 21st November 2014 and ending on 21st August 2017

 

 

2016 Loan 2 Update

·    No principal repayments were made between 1st January 2016 to 30th June 2016

·     Quarterly interest payments remain in effect and were paid in February and May 2016

·    Outstanding balance of $1.0 million as at 30th June 2016

·    Principal moratorium (same as note on Loan 1 above)

 

Debt Covenants

 

Financial covenants applicable to each of the above facilities are:

·     Minimum debt service coverage 1.4:1

·     Maximum total debt to EBITDA-Operating taxes 2.75:1

·     Minimum EBITDA-Operating taxes to Interest Expense 1.5:1

 

The carrying value of borrowings is not materially different from their fair value.  At the end of the half year 2015, Trinity's results was non-compliant with the debt service coverage ratio (the minimum requirement being 1.4:1, however the actual ratio was c. 0.3:1).  The entire borrowings remain classified as current due to the breach of the debt service coverage ratio.

 

Analysis of net debt

 

 

At 1st January 2016 

$'000

Cashflow

$'000

At 30th

 June 2016 

$'000

Cash and cash equivalents

8,200

(3,088)

5,112

Financial liabilities - borrowings current

(13,000)

1,050

(11,950)

 

(4,800)

(2,038)

(6,838)

 

 

10   Provisions and Other Liabilities

 

 

Non-Current

Potential  Claim

Decommissioning cost

Total

 

$'000

$'000

$'000

6 months ended 30th June 2016

 

 

 

Opening amount as at 1st January 2016

1,270

18,561

19,831

Unwinding of discount

--

483

483

Transferred from disposal groups held for sale

(note 12)

--

9,233

9,233

Translation differences

--

(689)

(689)

Closing balance as at 30th June 2016

1,270

27,588

28,858

 

 

 

 

6 months ended 30th June 2015

 

 

 

Opening amount as at 1st January 2015

1,270

38,505

39,775

Unwinding of discount

--

766

766

Transferred to disposal groups held for sale

(note 12)

--

(21,286)

(21,286)

Closing balance as at 30th June 2015

1,270

17,985

19,255

 

 

 

 

         

 

Year ended 31st December 2015

 

 

 

Opening amount as at 1st January 2015

1,270

38,505

39,775

Adjustment to estimates

--

853

853

Transferred to liabilities held for sale

--

(21,927)

(21,927)

Unwinding of discount

--

1,524

1,524

Translation differences

--

(394)

(394)

Closing balance at 31st December 2015

1,270

18,561

19,831

 

Potential claim

     The amounts represent a provision for a potential claim against a subsidiary of the Group by a supplier of services in the oil and gas industry. In management's opinion these claims will not give rise to any significant losses beyond the amounts provided at 31st December, 2014.  The potential claim is anticipated to be settled no later than September 2016.

 

 

11 Inventory

 

30th June 2016

30th June 2015

31st December 2015

 

$'000

$'000

$'000

Crude oil

160

314

160

Materials and supplies

3,734

6,357

3,802

 

3,894

6,671

3,962

 

 

 

 

12 Non-current assets held for sale

 

Certain assets and liabilities relating to Trinity's oil and gas fields owned and operated by its indirect subsidiary Trinity Exploration and Production (Trinidad and Tobago) Limited have been presented as held for sale following approval of management and Board of Directors by way of a Formal Sales Process ("FSP").  On 14th April 2016 the Guapo-1 ("GU-1") block was sold and the carrying value of $1.9 million has been removed from the 30th June 2016 assets held-for-sale.  The assets held for sale at 30th June 2016 relate to the West Coast assets of the Group, the Onshore assets have been reclassified as property, plant and equipment.

 

(a)  Assets of the disposal Group classified as held for sale

 

 

30th June 2016

30th June

2015

31st December 2015

Property, plant & equipment

$'000

$'000

$'000

Net Book Value at 1 Jan

30,491

672

672

Disposal

(1,926)

(104)

(780)

Reclassified as property, plant & equipment

(16,493)

--

--

Transferred from property, plant & equipment

--

34,123

30,599

Translation difference

(1,033)

--

--

Net Book Value

11,039

34,691

30,491

 

(b)  Liabilities of the disposal group classified as held for sale

 

 

30th June 2016

30th June

2015

31st December 2015

Other provisions

$'000

$'000

$'000

Decommissioning provision 1 Jan

21,927

--

--

Reclassified as provision and other liabilities

(9,233)

--

--

Transferred from provision and other liabilities

--

21,286

21,286

Unwinding of discount rate

363

--

641

Disposal

(112)

--

--

Translation difference

(775)

--

--

 

12,170

21,286

21,927

 

In accordance with IFRS 5, the assets and liabilities held for sale criteria were met between the balance sheet date and the date that the condensed financial statements were authorised. 

 

13 Related party transactions

 

     The following transactions were carried out with the Group's related parties during the six months to 30th June 2016.  These transactions comprised sales and purchase of goods and services in the ordinary course of business. 

 

 

The receivables from related parties arise mainly from sale transactions and are due one month after the date of sales. The receivables are unsecured and bear no interest. No provisions are held against receivables from related parties.

 

 

 

 

 

 

 

 

 

 

 

 

13 Related party transactions (Continued)

 

  The payables to related parties arise mainly from purchase transactions and are due one month after the date of purchase. The payables bear no interest. A legal claim was made by the related party Well Services Petroleum Company Limited against a subsidiary of the Group to recover the balance owed of $2.0 million at the end of 2015.  There were no other related party transactions in the period. 

 


30th June

 2016


30th June

 2015

 

31st December 2015

 

$'000

$'000

$'000

Sales of goods and services to related parties

--

3,999

3,551

Purchase of goods and services from related parties

18

1,464

1,197

Receivables from related parties

--

--

--

Payables to related parties

853

2,801

1,986

 

14 Earnings per Share

 

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted earnings per share is calculated using the weighted average number of ordinary shares adjusted to assume the conversion of all dilutive potential ordinary shares.

 

 

Earnings - Total Comprehensive Income/(Loss)

Weighted Average Number Of Shares $'000

Earnings Per Share $

For The Period

$'000

 

 

 

 

 

Period ended 30th June 2016

 

 

 

Basic

(1,526)

94,800

(0.02)

Impact of dilutive ordinary shares:

--

--

--

Diluted

(1,526)

94,800

(0.02)

 

 

 

 

Period ended 30th June 2015

 

 

 

Basic

(15,820)

94,800

(0.17)

Impact of dilutive ordinary shares:

--

--

--

Diluted

(15,820)

94,800

(0.17)

 

 

 

 

Year ended 31st December 2015

 

 

 

Basic

(58,520)

94,800

(0.62)

Impact of dilutive ordinary shares:

-- 

-- 

-- 

Diluted

(58,520)

94,800

(0.62)

 

 

 

 

As net losses from continuing operations were recorded in June 2016, the dilutive potential shares are anti-dilutive and both basic and diluted earnings per share are the same. 

 

15 Contingencies

 

1.   One of the subsidiaries has received an assessment from the tax authority of Trinidad & Tobago namely, the Board of Inland Revenue ("BIR"), in respect of Supplemental Profits Tax. The subsidiary has filed a notice of objection with the BIR and until the matters are determined, the assessments raised are not considered final. No material unrecorded liabilities are expected to crystallise and accordingly no provision has been made in these financial statements. Subsequent to the period ending supporting evidence was provided to the BIR which has overturned the claim.

 

2.   A subsidiary of the Company is a defendant in certain legal proceedings. A claim was made against the subsidiary by Mora Ven Holdings limited. The claim being made was that the subsidiary bought the shares of Ligo Ven Resources Limited, a fellow subsidiary, at gross under-value. Management, after taking appropriate professional advice, is of the view that no material liabilities will crystallise and accordingly no provision has been made in the financial statements for any potential liabilities.

 

3.   The farmout agreement for the Tabaquite block (held by Coastline International Inc.) has expired. There may be additional liabilities arising when a new agreement is finalised, but these cannot be presently quantified as a new agreement has not yet been finalised by both parties which would agree any terms or conditions inherent the financial statements do not include any estimates of such liabilities.

 

4.   Parent company guarantees:

(a)      A Letter of Guarantee has been established over the Point Ligoure-Guapo Bay-Brighton Block where a subsidiary of Trinity is obliged to carry out a Minimum Work Programme to the value of $8.4 million.  The guarantee shall be reduced at the end of each twelve month period upon presentation of all technical data and results of the Minimum Work Programme performed.  Trinity has submitted the technical data for reducing the performance guarantee at the end of 2015 and are awaiting a response.

 

(b)      A letter of Guarantee is in place with Citibank (Trinidad & Tobago) Limited for the full $25.0 million loan facility should there be a default.

 

5.   The Group has certain liabilities in respect of entering a rig share agreement for the Rowan Gorilla III which it used to drill the TGAL-1 well.  The agreement was made amongst four parties and the liabilities are joint and several.  The liabilities cannot be presently quantified and no estimates have been included in the financial statements. For 2016 the Group has received no cost and does not expect that these liabilities will be material.

 

 

6.   The group is party to various claims and actions.   Management have considered the matters and where appropriate has obtained external legal advice.  No material additional liabilities are expected to arise in connection with these matters, other than those already provided for.

 

7.   The UK subsidiaries have received an assessment from the tax authority of the United Kingdom namely, the Her Majesty's Revenue and Customs (HMRC), in respect of Value Added Tax claims. The subsidiaries have requested an independent reconsideration of the matters with the HMRC, the assessments raised are not considered final. No material unrecorded liabilities are expected to crystallise and accordingly no provision has been made in these financial statements. Subsequent to the period the HMRC have sent a letter to the company withdrawing their decision in respect of the Value Added Tax claims.

 

 

16 Events after the Reporting Period

 

1)   On 16 August 2016, Trinity's Trinidad and Tobago incorporated wholly-owned subsidiaries Trinity Exploration and Production (Trinidad and Tobago) Limited, Galeota Oilfield Services Limited, Trinity Exploration and Production (Galeota) Limited, Tabaquite Exploration & Production Company Limited, Trinity Exploration and Production (GOP) Limited, Trinity Exploration and Production (GOP-1B) Limited,  Oilbelt Services Limited, Trinity Exploration and Production Services Limited and Ligo Ven Resources Limited (the "Subsidiaries" and each a "Subsidiary") filed a notice of intention ("NOI") to make a proposal to creditors under the Trinidad and Tobago Bankruptcy and Insolvency Act Chapter 9:70 ("BIA").

 

The BIA allows a company to continue operating while it submits its proposal to reach a settlement with its outstanding creditors. The filing of the NOI provides the Subsidiaries with a stay of proceedings from all of their creditors and means that no person may terminate or amend an agreement or claim an accelerated payment under any agreement with any Subsidiary by reason only that such Subsidiary is insolvent or that a notice of intention or proposal has been filed.

 

2)   In July and August 2016 Trinity has repaid a total of $2.0 million towards Citibank reducing the outstanding debt balance to $10.0 million.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
END
 
 
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