While Trinity Exploration and Production plc pared away US$1.3 million in losses, falling from US$14.3 million in 2011 to US$13 million in 2012, according to its May 8, (2013) results report, two shareholders to watch have increased their shareholding in the company.The Legal and General (L&G) group of the United Kingdom, the company's single largest shareholder, and Trinity chief executive officer Joel Monty Pemberton increased their shareholding on the same day of the release of the loss results for the year ended December 31, 2012.L&G fund manager Matthew Evans had said in an April 9 interview that Trinity plc is undervalued. Dr Jim Lee Young, a former energy chamber president and former chief executive of 10 Degrees North, one of Trinity's predecessors, had said the same earlier, on February 25.
The share hit a low of 104 pence on May 3. Pemberton and L&G had bought on May 8. In a regulatory disclosure document, the London Stock Exchange said: "On May 8, 2013, Joel Pemberton, CEO, purchased 28,500 ordinary shares in the capital of the company at a price of �1.08 per share. Following this purchase Joel Pemberton is interested in 522,815 ordinary shares in the company, representing approximately 0.55 per cent of the issued share capital of the company."Pemberton was joined on May 9 (2013) by Jonathan Murphy, a non-executive director, who purchased 100,000 ordinary shares in the capital of the company at a price of �1.08 per share. Following this purchase Jonathan Murphy is interested in 4,977,421 ordinary shares in the company, representing approximately 5.25 per cent of the issued share capital of the company.
L&G Investment Management Ltd (LGIM) on the same day raised its shareholding from 10,975,411 (as of February 26) to 14,485,411 or 15.27 per cent of the company. Now, the L&G Group has crossed the threshold of 15 per cent ownership of the company.The market has already reacted to the directors' and major shareholder's purchases. At press time Monday, Trinity was trading slightly higher, at 112 pence, but still lower than its February 14, initial public offering (IPO) of 120 pence.The financials released on May 8 said Trinity had revenue of US$36.2 million at the end of 2012, compared with US$22 million in 2011.Its loss before tax was US$23.9 million, higher than 2011's loss of US$17.2 million, after write off for unsuccessful exploration costs of US$21.9 million.Its loss after tax was US$13.0 million, down from 2011's US$14.3 million. Its capital expenditure (capex) for the year was US$69.8 million, up from 2011's which totaled US$41.3 million, comprising Trintes field development costs (US$22.9 million) and exploration costs (US$46.9 million). Cash and cash equivalents at year end 2012 were US$9.7 million, down from the 2011 number, US$59.4 million.
Production
Average gross production from the Trintes field increased by 43 per cent to 1,715 barrels of oil per day (bopd), up from 2011's 1,202 bopd. Net proven and probable (2P) reserves at Trintes increased by 25 per cent from 19.3 million barrels (mmbbl) at December 31, 2010 to 24.1 mmbbl at June 30, 2012 (audited by Gaffney Cline Associates).Trinity had an oil and gas discovery in March 2012 with estimated gross recoverable resources of 32 mmbbl and 69 billion cubic feet (bcf) of gas.Trinity has drilled six onshore development wells to date. Four wells have been brought onstream with average initial production rates of 150 bopd per well (versus budget of 50 bopd). A new operating team installed at Trintes and an infill drilling programme has commenced, the report said.The exploration campaign on the Galeota Block is expected to commence in the third quarter of 2013 using the Rowan Gorilla III (RG III) drilling rig, Trinity said. A rig sharing agreement has been signed by Trinity, Repsol, EOG and Centrica with Trinity committing to take one rig slot using the RG III after EOG's 2013 drilling campaign is completed.Maiden results of the enlarged group for the six-month period to 30 June 2013 will be released to the market at the end of September 2013.
Diversified asset portfolio
Trinity CEO Pemberton commented: "The combination of Bayfield and Trinity Exlporation and Production Ltd to form Trinity Exploration and Production plc has created a robust business with a diversified asset portfolio generating surplus operating cash from its production operations on the east coast, west coast and onshore Trinidad."Our 2013 onshore drilling campaign has been successful thus far with six wells now drilled, all under budget. Four of these wells have been completed and brought into production at rates surpassing our expectations, a further two wells will be brought into production within the next few days, and the seventh well will spud within the next week.Executive chairman Bruce Dingwall said 2012 was a year of great change for Trinity Exploration and Production plc (formerly known as Bayfield Energy Holdings plc) and its subsidiaries (the group)."Significant operational progress was made with gross production growing 108 per cent from 1,198 bopd to 2,496 bopd at the Trintes field and exploration success at the EG-8 well in March 2012 which identified development potential of 32.0 mmbbl of oil and 69.0 bcf of gas."Following the successful infill drilling programme, the Group announced in December 2012 that net 2P reserves at the Trintes field had grown by 25 per cent from 19.3 mmbbl at December 31, 2010 to 24.1 mmbbl at June 30, 2012," Dingwall said.
However, growth in production and cash flow was slower than expected due to operational issues on Trintes and by May 2012, the group recognised the need for additional funding, he said. The group sought to raise equity financing, but despite a measure of institutional support, was unable to secure sufficient funds.Consequently, the group commenced a review of its strategic alternatives which culminated in the announcement on October 15, 2012 that the group had agreed to be acquired by Trinity Exploration and Production Ltd (now Trinity Exploration and Production (UK) Ltd–TEPL).
