The year is 2026, but the en­er­gy shock of 2014 still haunts in­vestors in T&T in ways that many do not ful­ly un­der­stand or ap­pre­ci­ate.

When com­mod­i­ty prices col­lapsed in 2014, the im­me­di­ate con­ver­sa­tion in T&T cen­tred on bud­get cuts and falling en­er­gy sec­tor rev­enues.

How­ev­er, a sec­ond con­se­quence played out over the fol­low­ing decade on the bal­ance sheets of en­er­gy-linked en­ti­ties, dri­ven by ac­count­ing stan­dards that re­quire com­pa­nies to write down as­set val­ues when for­ward-look­ing as­sump­tions de­te­ri­o­rate.

Those write-downs, all non-cash, cas­cad­ed through re­port­ed prof­its, re­tained earn­ings, and div­i­dend ca­pac­i­ty in ways that are still shap­ing in­vestor out­comes in 2026.

The ex­pe­ri­ence of T&T NGL Lim­it­ed of­fers a use­ful lens for un­der­stand­ing how these me­chan­ics work in the lo­cal mar­ket.

TTNGL was in­cor­po­rat­ed in 2013 and list­ed on the stock ex­change in 2015 at $20 per share. It is a hold­ing com­pa­ny in the purest sense: its sole ma­te­r­i­al as­set is a 39 per cent eq­ui­ty in­ter­est in Phoenix Park Gas Proces­sors Lim­it­ed (PPG­PL), the gas pro­cess­ing joint ven­ture. NGC holds ma­jor­i­ty con­trol of PPG­PL through a 51 per cent stake via NGC NGL Group Lim­it­ed.

At IPO, NGC al­so held 51 per cent of TTNGL it­self; fol­low­ing a 2017 ad­di­tion­al pub­lic of­fer­ing, NGC’s ef­fec­tive in­ter­est in TTNGL fell to 25 per cent, with 75 per cent now pub­licly trad­ed.

A third PPG­PL own­er­ship block of 10 per cent sits with Pan West En­gi­neers and Con­struc­tors LLC, a ve­hi­cle owned equal­ly by NEL, UTC, and NIBTT, which ac­quired Pan West from a GE Cap­i­tal sub­sidiary in No­vem­ber 2014 for US$168 mil­lion.

The IPO prospec­tus stat­ed the in­vest­ment the­sis plain­ly: long-term val­ue through ap­pre­ci­a­tion of the PPG­PL in­vest­ment and “re­li­able and durable” div­i­dends. The risks were dis­closed as be­ing: NGL price volatil­i­ty, gas sup­ply de­pen­den­cy, con­cen­tra­tion in a sin­gle un­der­ly­ing as­set, and the pos­si­bil­i­ty that div­i­dends could be re­duced or sus­pend­ed.

What in­vestors were buy­ing, in oth­er words, was a bet on one as­set, with re­turns de­pen­dent on com­mod­i­ty prices, gas vol­umes, and the op­er­at­ing per­for­mance of PPG­PL.

Ac­count­ing Stan­dards

In­ter­na­tion­al ac­count­ing stan­dards re­quire that when a com­pa­ny holds an as­set on its bal­ance sheet, it can­not car­ry that as­set at more than it is ac­tu­al­ly worth. The test is straight­for­ward in con­cept: com­pare what the books say the as­set is worth (the car­ry­ing amount) with what the as­set could ac­tu­al­ly re­cov­er, ei­ther through its on­go­ing use or through a sale. If the books over­state re­al­i­ty, the com­pa­ny must write the val­ue down. That write-down is called an im­pair­ment loss.

For TTNGL, the as­set be­ing test­ed is its in­vest­ment in PPG­PL. In re­cent years, the com­pa­ny’s au­dit­ed ac­counts state that the re­cov­er­able amount was es­ti­mat­ed by mod­el­ling what the in­vest­ment could fetch in a sale, af­ter dis­pos­al costs. The as­sump­tions feed­ing that mod­el in­clude ex­pect­ed NGL prices, gas sup­ply vol­umes, NGL con­tent in the gas stream, the dis­count rate used to bring fu­ture cash flows to present val­ue, and, af­ter PPG­PL ex­pand­ed in­to the Unit­ed States from 2020, growth as­sump­tions for its North Amer­i­can op­er­a­tions.

Two fea­tures of this process mat­ter for in­vestors. First, the in­puts are for­ward-look­ing es­ti­mates, not ob­served mar­ket prices. Rea­son­able peo­ple can dis­agree about fu­ture NGL prices or gas vol­umes, and small changes in as­sump­tions can move the out­come from a pass to a write-down.

TTNGL’s own sen­si­tiv­i­ty dis­clo­sures con­firm how nar­row that mar­gin can be. A mod­est re­vi­sion to ex­pect­ed gas vol­umes or NGL con­tent, for ex­am­ple, can tip the cal­cu­la­tion from no im­pair­ment to a write-down of hun­dreds of mil­lions of dol­lars. Sec­ond, un­like good­will im­pair­ment, which is per­ma­nent once recog­nised, im­pair­ment on this type of in­vest­ment can be re­versed if con­di­tions im­prove. That cre­ates a cy­cle of write-downs and par­tial write-backs that can whip­saw re­port­ed earn­ings from year to year.

That cy­cle is ex­act­ly what hap­pened. Be­fore the shares were ever trad­ed pub­licly, TTNGL recog­nised an im­pair­ment loss of $1.1 bil­lion on its PPG­PL in­vest­ment in 2014. Be­tween 2015 and 2019, small re­ver­sals fol­lowed as con­di­tions par­tial­ly im­proved. Then came a re­stat­ed im­pair­ment of $1.3 bil­lion in 2020, fol­lowed by an­oth­er par­tial re­ver­sal in 2021. The re­state­ments re­flect­ed cor­rec­tions at the PPG­PL lev­el, in­clud­ing the recog­ni­tion of de­com­mis­sion­ing pro­vi­sions and the treat­ment of cer­tain North Amer­i­can con­tract costs, both of which changed the im­pair­ment mod­el­ling. Fur­ther charges of $562 mil­lion, $574 mil­lion, and $184 mil­lion fol­lowed in 2022, 2023, and 2024, re­spec­tive­ly.

The cu­mu­la­tive ef­fect trans­formed TTNGL’s eq­ui­ty po­si­tion. Re­tained earn­ings of near­ly $500 mil­lion at the end of 2015 be­came an ac­cu­mu­lat­ed deficit ap­proach­ing $1.9 bil­lion by the end of 2024. Through­out much of this pe­ri­od, TTNGL con­tin­ued to re­ceive ac­tu­al cash div­i­dends from PPG­PL. But un­der the ac­count­ing stan­dards, cash re­ceived from an in­vestee and the as­sessed re­cov­er­able amount of the in­vest­ment in that in­vestee are sep­a­rate ques­tions. A com­pa­ny can col­lect re­al mon­ey from an as­set while si­mul­ta­ne­ous­ly be­ing re­quired to write the as­set’s val­ue down on its books.

Mul­ti­ple Im­pacts

The own­er­ship struc­ture around PPG­PL cre­ates a sec­ond lay­er of com­plex­i­ty. Be­cause three dif­fer­ent en­ti­ties hold stakes in the same un­der­ly­ing as­set, the same eco­nom­ic event—a de­cline in PPG­PL’s val­ue dri­ven by weak­er com­mod­i­ty con­di­tions—shows up in three sep­a­rate sets of fi­nan­cial state­ments. And be­cause each en­ti­ty ac­counts for its stake un­der a dif­fer­ent ac­count­ing frame­work, the re­sult­ing loss­es are dif­fer­ent in size, tim­ing, and treat­ment.

TTNGL tests its in­vest­ment for im­pair­ment us­ing a frame­work de­signed for long-term eq­ui­ty stakes. NEL, by con­trast, mea­sures its in­di­rect in­ter­est through Pan West at es­ti­mat­ed fair val­ue us­ing mod­el-based as­sump­tions that are not de­rived from ob­serv­able mar­ket prices. NEL’s es­ti­mat­ed fair val­ue for Pan West fell steadi­ly over the three years to Sep­tem­ber 2025. NEL al­so changed its val­u­a­tion tech­nique in 2025, which pro­duced a fur­ther fair val­ue move­ment and made year-on-year com­par­i­son of Pan West car­ry­ing val­ues less straight­for­ward.

NGC, as the par­ent com­pa­ny, record­ed a good­will charge of $1.5 bil­lion in 2023 at the con­sol­i­dat­ed lev­el, re­flect­ing the same com­mod­i­ty and pro­duc­tion dy­nam­ics.

The prac­ti­cal con­se­quence for in­vestors is that a sin­gle val­u­a­tion shock to one gas pro­cess­ing as­set can ap­pear, fil­tered through dif­fer­ent ac­count­ing rules, across mul­ti­ple list­ed and state-linked en­ti­ties si­mul­ta­ne­ous­ly.

The Pan West ac­qui­si­tion cost each con­sor­tium mem­ber US$56 mil­lion in 2014. NEL’s au­dit­ed ac­counts show Pan West div­i­dends re­ceived in re­cent years that are mod­est rel­a­tive to that orig­i­nal out­lay, and NEL’s own es­ti­mat­ed fair val­ue for the in­vest­ment has de­clined ma­te­ri­al­ly. For in­sti­tu­tion­al in­vestors whose man­dates in­volve man­ag­ing long-term sav­ings, the con­cen­tra­tion of ex­po­sure in a sin­gle gas pro­cess­ing as­set rais­es ques­tions about how well port­fo­lio con­struc­tion ac­count­ed for the risk pro­file that TTNGL’s own prospec­tus de­scribed. The broad­er is­sue is struc­tur­al: T&T’s cap­i­tal mar­kets of­fer rel­a­tive­ly few ve­hi­cles for do­mes­tic en­er­gy sec­tor in­vest­ment, which can lead to con­cen­trat­ed rather than di­ver­si­fied in­sti­tu­tion­al ex­po­sure when op­por­tu­ni­ties do arise.

Fix­ing this re­quires more in­vest­ment op­por­tu­ni­ties in this sec­tor that are less in­ter­con­nect­ed.

Div­i­dends

The ac­cu­mu­lat­ed deficit at TTNGL cre­at­ed more than an ac­count­ing blem­ish. It pro­duced a le­gal bar­ri­er to div­i­dends. Un­der T&T’s Com­pa­nies Act, a com­pa­ny can­not dis­trib­ute div­i­dends if its li­a­bil­i­ties plus stat­ed cap­i­tal ex­ceeds its to­tal as­sets. TTNGL’s stat­ed cap­i­tal—the amount orig­i­nal­ly cred­it­ed to the com­pa­ny’s share cap­i­tal ac­count—stood at $2.8 bil­lion. Com­bined with the ac­cu­mu­lat­ed deficit, the sol­ven­cy arith­metic failed. No div­i­dends were paid in 2023 or 2024, even though TTNGL held cash and con­tin­ued to re­ceive dis­tri­b­u­tions from PPG­PL.

The so­lu­tion was a stat­ed cap­i­tal re­duc­tion of $2.2 bil­lion, ap­proved by spe­cial res­o­lu­tion on March 5. The ac­count­ing en­try is a re­clas­si­fi­ca­tion with­in eq­ui­ty: stat­ed cap­i­tal is re­duced, and the ac­cu­mu­lat­ed deficit is off­set by the same amount. To­tal eq­ui­ty does not change. No cash is cre­at­ed, but the le­gal maths shifts, and the div­i­dend bar­ri­er is re­moved. Think of it as re­ar­rang­ing the la­bels on the same pool of eq­ui­ty so that the num­bers pass a statu­to­ry test they pre­vi­ous­ly failed. The TTSE bul­letin stat­ed that the re­duc­tion “fa­cil­i­tates the de­c­la­ra­tion and pay­ment of div­i­dends”.

In April 2026, TTNGL de­clared a spe­cial div­i­dend of TT$1.00 per share, the first dis­tri­b­u­tion in al­most four years.

The ac­count­ing stan­dards that gov­ern im­pair­ment test­ing ex­ist for a sound rea­son. They pre­vent com­pa­nies from car­ry­ing as­sets above what those as­sets can re­cov­er, and with­out that dis­ci­pline, bal­ance sheets would over­state re­al­i­ty. Yet in less liq­uid and emerg­ing mar­kets, the in­ter­ac­tion be­tween for­ward-look­ing val­u­a­tion judge­ments, hold­ing com­pa­ny struc­tures, and cor­po­rate law pro­duces out­comes that can dis­ori­ent even at­ten­tive in­vestors. For those hold­ing T&T’s en­er­gy-linked se­cu­ri­ties, the les­son from the past decade is clear: the head­line prof­it or loss num­ber is of­ten the least in­for­ma­tive line in the fi­nan­cial state­ments. The notes, the im­pair­ment dis­clo­sures, the eq­ui­ty com­po­si­tion, and the mar­ket out­looks are where the ac­tu­al sto­ry sits.

Ian Nar­ine is a fi­nan­cial con­sul­tant who has had the roles of ac­coun­tant, au­di­tor, in­vest­ment an­a­lyst, port­fo­lio man­ag­er, and board au­dit com­mit­tee chair­man. Please send your com­ments to ian@ian­nar­ine.com