TOUCHSTONE ANNOUNCES SIGNIFICANT CASCADURA INDEPENDENT RESERVES EVALUATION

CALGARY, ALBERTA (July 20, 2020) – Touchstone Exploration Inc. (“Touchstone”, “we”, “our”, “us” or the “Company”) (TSX, LSE: TXP) announces highlights of our independent reserves evaluation of the Cascadura Assessment Area prepared by GLJ Ltd. (“GLJ”) with an effective date of June 30, 2020 (the “Cascadura Reserves Report”). Highlights of our total proved (“1P”), total proved plus probable (“2P”) and total proved plus probable plus possible (“3P”) reserves from the Cascadura Reserves Report are provided below. Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.

The Cascadura Assessment Area is located in the Company’s Ortoire exploration block, onshore in the Republic of Trinidad and Tobago (Touchstone 80% working interest operator, Heritage Petroleum Company Limited 20% working interest). The Cascadura Assessment Area represents the geologically and geophysically defined reservoirs which were evaluated by the Company’s Cascadura-1ST1 exploration well drilled in the fourth quarter of 2019 and tested in the first half of 2020.

The Cascadura Reserves Report evaluates the Cascadura Assessment Area on a stand-alone basis and provides a reserves estimate of natural gas and natural gas liquids, as well as a before income tax estimate of net present values of future net revenues as of June 30. 2020. The Cascadura Reserves Report should be considered as supplementary to, and reconciled with, the volumes and future net revenues disclosed in the Company’s 2019 Annual Information Form dated March 25, 2020 which has been filed on SEDAR and can be accessed at www.sedar.com.

Paul R. Baay, President and Chief Executive Officer, commented:

“We are delighted to report that the independent reserves report verifies the material size of the reserves yet to be produced in the Cascadura structure and provides the groundwork for a multi-year future onshore development program in Trinidad. Through the excellent work of the Touchstone team in the drilling of our first two exploration wells, we have successfully proven up the hydrocarbon bearing turbidite model in Ortoire. This model will be further evaluated by our next two exploration targets at Chinook and Cascadura deep, with drilling at Chinook on track to commence within the next few weeks.

We could not have envisioned a better start from the first two wells of the Ortoire exploration program, and we look forward to updating the market and our Trinidad stakeholders as we progress with our Ortoire exploration and development activities in the coming months.”

Cascadura Reserves Report Highlights
Gross Discovered Petroleum Initially-in-Place (“DPIIP”) is estimated to be between 571.5 Bcf of natural gas in the High Estimate and 241.2 Bcf in the Low Estimate, with a Best Estimate of 398.5 Bcf.

Company working interest 3P reserves of 73,190 Mboe (85% recovery of High Estimate DPIIP), 2P reserves of 45,030 Mboe (75% recovery of Best Estimate DPIIP), and 1P reserves of 23,622 Mboe (65% recovery of the Low Estimate DPIIP).

Net peak production is estimated to be 22,600 boe/d in the 3P forecast, 15,108 boe/d in the 2P forecast, and 10,266 boe/d in the 1P forecast.

Estimated before tax 3P 10% discounted net present value of future net revenues (“NPV10”) of $802.9 million, 2P NPV10 of $519.2 million, and 1P NPV10 of $287.7 million.

Net future development costs associated with the development of the Cascadura Assessment Area is estimated at $11.6 million for 1P reserves and $15.8 million for both 2P and 3P reserves.
James Shipka, Chief Operating Officer, commented:

“GLJ’s independent evaluation of the Cascadura-1ST1 production test results and the subsequent reserves evaluation of the Cascadura Assessment Area confirms the tremendous potential of the Ortoire exploration block. The Cascadura Reserves Report combines both the pressure and flow testing of the Cascadura-1ST1 well with the 3D seismic data which covers the entirety of the Cascadura structure as we now understand it. The team is currently working hard to design the facilities and infrastructure required to bring the Cascadura gas and liquids to market as quickly as possible, and with GLJ estimating there is in excess of 500 Bcf of discovered natural gas in place in the Cascadura area, it is evident that we have a clear pathway to a multi-year development program.”

Cascadura Reserves Report Summary

Touchstone’s petroleum reserves for the Cascadura Assessment Block were evaluated by independent qualified reserves evaluator, GLJ, in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation (“COGE”) Handbook and National Instrument 51-101 – Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). The reserve estimates set forth below are based upon GLJ’s Cascadura Reserves Report dated July 17, 2020 with an effective date of June 30, 2020. All values in this news release are based on GLJ’s July 1, 2020 forecast prices and estimates of future operating and capital development costs as at June 30, 2020. In certain tables set forth below, the columns may not add due to rounding.

Summary of Cascadura Assessment Area Company Gross Reserves as of June 30, 2020 by Product Type(1),(2)

Summary of Cascadura Assessment Area Company Net Present Values of Future Net Revenues as of June 30, 2020(1),(2),(3)

Summary of Pricing and Inflation Assumptions

The following table sets forth GLJ’s forecasted benchmark reference pricing and inflation rates reflected in the Cascadura Reserves Report effective June 30, 2020.

Cascadura Assessment Area Company Future Development Costs(1)

The following table provides information regarding the development costs deducted in the estimation of the Company’s working interest future net revenue using forecast prices and costs included in the Cascadura Reserves Report.

Touchstone Exploration Inc.

Touchstone Exploration Inc. is a Calgary based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company’s common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol “TXP”.

For further information about Touchstone, please visit our website at www.touchstoneexploration.com or contact:

Mr. Paul Baay, President and Chief Executive Officer
Mr. James Shipka, Chief Operating Officer
Telephone: 403.750.4487

Advisories

Reserve Advisory

The reserves estimates prepared herein have been evaluated by an independent qualified reserves evaluator in accordance with NI 51-101 and the COGE Handbook. The disclosure in this news release summarizes certain information contained in the Cascadura Reserves Report but represents only a portion of the disclosure required under NI 51-101. In accordance with Canadian practice, production volumes and revenues are reported on a Company gross basis, before deduction of crown and other royalties. Unless otherwise specified, all reserves volumes in this news release (and all information derived therefrom) are based on Company gross reserves using forecast prices and costs.

The recovery and reserve estimates provided herein are estimates only, and there is no guarantee that the estimated reserves will be recovered. Actual reserves may eventually prove to be greater than or less than the estimates provided herein. This news release (i) summarizes the reserves of the Company’s Cascadura Assessment Area only and the net present values of future net revenue for such reserves using forecast prices and costs as at June 30, 2020 prior to provision for income taxes, interest, general and administrative expenses, the impact of any financial derivatives or liabilities associated with the abandonment and reclamation of certain facilities and wells, and (ii) should be considered as supplementary to, and reconciled with, the volumes and net present values of future net revenues disclosed in the Company’s 2019 Annual Information Form dated March 25, 2020 which has been filed on SEDAR and can be accessed at www.sedar.com. The estimates of reserves and future net revenue have been made assuming that the development will occur. The estimates of reserves and future net revenue for individual properties may not reflect the same confidence level as estimates of reserves and future net revenue for all properties, due to the effects of aggregation. It should not be assumed that the present worth of estimated before tax future net revenues presented in the table above represent the fair market value of the reserves. There is no assurance that the forecast prices and costs assumptions will be attained, and variances could be material. The term “future development costs” does not have a standardized meaning and should not be used to make comparisons.

The DPIIP set forth in this news release has been provided for the sole purpose of highlighting the recovery factors used by GLJ in attributing reserves to the Cascadura Assessment Area effective as of June 30, 2020. As disclosed below, DPIIP is defined by COGE as that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP includes production, reserves and contingent resources; the remainder is unrecoverable. It should not be assumed that any portion of the DPIIP set forth in this news release is recoverable other than the portion which has been attributed reserves by GLJ. There is uncertainty that it will be commercially viable to produce any portion of the DPIIP other than the portion that is attributed reserves.

In the Cascadura Reserves Report, GLJ estimated conventional natural gas revenues referencing Henry Hub natural gas forecasted pricing and natural gas liquids revenues based on forecasted Conway Condensate reference pricing. The Company is currently negotiating a marketing agreement for all petroleum products produced on the Ortoire property, and accordingly, such revenue estimates in the Cascadura Reserves Report may not be attained, and variances could be material. In addition, GLJ forecasted reserve volumes and future cash flows based upon volumetric interpretations and extrapolations based upon well testing. Notwithstanding contractual options for the extension of the Company’s Ortoire block production and exploration agreement (the “Licence”) upon a commercial discovery, the forecasted economic limit of individual wells and the net present values of future net revenue therefrom is currently beyond the initial exploration term of the Licence.

Definitions of Petroleum Reserves

The reserves have been categorized accordance with the reserves definitions as set out in the COGE Handbook, which are set out below.

“Reserves” are estimated remaining quantities of petroleum anticipated to be recoverable from known accumulations, as of a given date, based on the analysis of drilling, geological, geophysical, and engineering data; the use of established technology; and specified economic conditions, which are generally accepted as being reasonable. Reserves are further classified according to the level of certainty associated with the estimates as follows:

“Proved Developed Producing Reserves” are those reserves that are expected to be recovered from completion intervals open at the time of the estimate. These reserves may be currently producing, or if shut-in, they must have previously been on production, and the date of resumption of production must be known with reasonable certainty.

“Proved Developed Non-Producing Reserves” are those reserves that either have not been on production or have previously been on production but are shut-in, and the date of resumption of production is unknown.

“Proved Undeveloped Reserves” are those reserves expected to be recovered from known accumulations where a significant expenditure (e.g. when compared to the cost of drilling a well) is required to render them capable of production. They must fully meet the requirements of the reserves category (proved, probable, possible) to which they are assigned.

“Proved Reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

“Probable Reserves” are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

“Possible Reserves” are those additional reserves that are less certain to be recovered than probable reserves. There is a 10 percent probability that the quantities actually recovered will equal or exceed the sum of proved plus probable plus possible reserves. It is unlikely that the actual remaining quantities recovered will exceed the sum of the estimated proved plus probable plus possible reserves.

“Discovered Petroleum Initially-in-Place (“DPIIP)” is that quantity of petroleum that is estimated, as of a given date, to be contained in known accumulations prior to production. The recoverable portion of DPIIP includes production, reserves, and contingent resources; the remainder is categorized as unrecoverable.

“Uncertainty Ranges” are described in the COGE Handbook as low, best, and high estimates for reserves and resources as follows:

The “Low Estimate” is considered to be a conservative estimate of the quantity that will actually be recovered. It is likely that the actual remaining quantities recovered will exceed the low estimate. If probabilistic methods are used, there should be at least a 90 percent probability (P90) that the quantities actually recovered will equal or exceed the low estimate.

The “Best Estimate” is considered to be the best estimate of the quantity that will actually be recovered. It is equally likely that the actual remaining quantities recovered will be greater or less than the best estimate. If probabilistic methods are used, there should be at least a 50 percent probability (P50) that the quantities actually recovered will equal or exceed the best estimate.

The “High Estimate” is considered to be an optimistic estimate of the quantity that will actually be recovered. It is unlikely that the actual remaining quantities recovered will exceed the high estimate. If probabilistic methods are used, there should be at least a 10 percent probability (P10) that the quantities actually recovered will equal or exceed the high estimate.

Oil and Gas Measures

Where applicable, natural gas has been converted to barrels of oil equivalent based on six thousand cubic feet to one barrel of oil. The barrel of oil equivalent rate is based on an energy equivalent conversion method primarily applicable at the burner tip, and given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different than the energy equivalency of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may be misleading as an indication of value. The boe rate is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalent at the wellhead. Use of boe in isolation may be misleading.

Forward-Looking Statements

Certain information provided in this news release may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking information in this news releasemay include, but is not limited to, statements relating to estimated DPIIP, reserves and the before tax net present values of future net revenue therefrom, future development costs and production rates associated with reserves, the potential undertaking, timing, locations and costs of future well drilling and related facilities, and the sufficiency of resources and available financing to fund future development and exploration operations. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Certain of these factors and risks are set out in more detail in the Company’s 2019 Annual Information Form dated March 25, 2020 which has been filed on SEDAR and can be accessed at www.sedar.com. The forward-looking statements contained in this news release are made as of the date hereof, and except as may be required by applicable securities laws, the Company assumes no obligation to update publicly or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

In addition, statements relating to reserves are by their nature forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described exist in the quantities predicted or estimated, and can be profitably produced in the future. The recovery and reserve estimates of Touchstone’s reserves provided herein are estimates only, and there is no guarantee that the estimated reserves will be recovered. Consequently, actual results may differ materially from those anticipated in the forward-looking statements.

Abbreviations

bbl barrel
Mbbl thousand barrels

MMcf million cubic feet
Bcf billion cubic feet
MMBtu million British Thermal Units

boe barrels of oil equivalent
boe/d barrels of oil equivalent per day
Mboe thousand barrels of oil equivalent

Trinity Exploration Q2 2020 operational update

16 Jul 2020

Trinity Exploration & Production, the independent E&P company focused on Trinidad and Tobago, provided an update on its operations for the three-month period ended 30 June 2020.
Strong production, financial resilience and cash to deploy enables focus on scaling the business

Trinity has continued to combine growing production levels, a low operating break-even and a technically advanced operating capability with a robust financial position, putting the Company in an exceptional position to contemplate new investment opportunities.

Significantly, production levels were maintained during Q2 2020 with production volumes averaging 3,272 bopd, yielding a H1 2020 average of 3,282 bopd. The Group’s unaudited cash balances increased to US$19.7 million as at 30 June 2020 (US$13.8 million (audited) as at 31 December 2019).

The Company reduced its pre-hedge income operating break-even (revenues less royalties, opex and G&A) by over 15% quarter-on-quarter to US$22.6/bbl (unaudited) (Q1 2020: US$26.7/bbl (unaudited)). After hedging income, this translates into an effective operating break-even of $21.6/bbl indicating that the Company is well on track to meet its target operating break-even (inclusive of hedging income) of US$20.5/bbl for FY 2020.

Q2 2020 Operational Highlights

8.5 % year-on-year increase in Group average production volumes to 3,272 bopd for the second quarter (Q2 2019: 2,996 bopd) without any new wells being drilled, representing broadly flat quarter-on-quarter production (Q1 2020: 3,291 bopd).
H1 2020 average production volumes of 3,282 bopd represent a year-on-year increase of 9.1% (H1 2019 3,008 bopd).
3 recompletions (“RCPs”) (Q1 2020: 3) and 17 workovers (Q1 2020: 39) were completed during the period, with swabbing continuing across all onshore assets.
Successful application of Weatherford’s Supervisory, Control and Data Acquisition (“SCADA”) with improved quantitative and qualitative performance from the wells
Improved problem diagnosis
More accurate operational responses to issues
Better understanding of system performance as related to technical design
Extending run-life
Greater optimisation of wells.
Production volumes for the remainder of 2020 will depend on oil price and general market conditions supporting the economic case for the resumption of drilling activity.
Even if the prevailing oil price environment does not support the case for a resumption of drilling in the near term, net average production for 2020 is still expected to be in the range of 3,100 – 3,300 bopd (2019: 3,007 bopd).

Q2 2020 Financial Highlights

Average realisation of US$26.4/bbl for Q2 (Q1 2020: US$46.3/bbl) yielding a H1 2020 average of US$36.3/bbl (H1 2019: US$59.1/bbl). As a result, no Supplemental Petroleum Taxes (” SPT “) will be payable with respect to H1 2020 production.
Cash balance of US$ 19.7 million (unaudited) as at 30 June 2020 (31 December 2019: US$13.8 million, audited). The H1 2020 cash balance reflects:
Cash outflows for Q4 2019 taxes (including SPT) of c.US$2.2 million, as well as annual payments (such as insurance and licence obligations) of US$0.7 million and capex of c. US$2.5m during H1 2020.
Cash inflows of US$2.7 million (from the drawdown of the CIBC First Caribbean working capital facility), US$2.8 million (from the sale of the recently received VAT Bonds) and net hedge income of US$0.8 million received during H1 2020.
Robust production levels combined with strict cost controls resulted in an average operating break-even of US$ 22.6/bbl (unaudited) for Q2 2020 versus Q1 2020 at US$26.7/bbl (unaudited) and compared to US$26.0/bbl for Q2 2019.
The downward trends in operating break-even continues, with the June 2020 level of US$21.6/bbl (post hedging income: US$19.8/bbl).
The Company is on track to meet its target for average operating break-even (inclusive of hedging income) of US$ 20.5/bbl for FY 2020.

Operations Update

Field operations have not, to date, been negatively impacted by COVID-19, but we continue to monitor the situation and have put further appropriate measures in place (including temperature checks) and will continue to adapt as and when required.

The Company’s continued focus on managing production decline has resulted in production levels being maintained at close to recent highs even in the absence of new wells being drilled and a reduced number of RCPs being undertaken. Protecting past investment is a key priority and ensures that rates of return are maintained despite the dramatic reduction in the oil price.

The extent and timing of the resumption of the onshore drilling programme will be dependent on the prevailing economic environment during the remainder of this year. In the meantime, the sub-surface team has been tasked with prioritising the identification of high angle well (“HAW”) drilling locations and the Company will continue to roll out further SCADA platforms on selected existing wells.

On the east coast Galeota licence, dialogue continues with partner Heritage Petroleum Company Limited and regulator, The Ministry of Energy and Energy Industries in moving both the Trintes Field area and the TGAL field development forward. The Environmental Impact Assessment (“EIA”) study commenced in February with all dry season data collection having subsequently been completed and wet season data collection is due to commence shortly. Work on building the dynamic reservoir model continues on the TGAL development. This important work assists in optimal platform and well placement and in better understanding the best strategy to drain the maximum amount of reserves with the minimum number of wells.

New Business: Pursuing Scale

Trinity’s production model delivers free cash generation across a broad range of oil prices. This is underpinned by the Company’s drive to reduce costs and maintain industry leading operating break-even levels. The Company’s financial strength compared to many of its peers, where break-evens are higher and finances are potentially more constrained, means that it is well placed to take advantage of commercial opportunities as and when they arise.

Outlook

The focus remains on tight cost controls and maintaining profitable production in the current low oil price environment thereby preserving balance sheet strength. Progress towards the low target break-even highlights the strength of the operating model. The Company’s strong production base combined with its ever increasing use of analytics provides a solid base for continued organic growth. Asset acquisitions and partnerships are another possible source of growth, offering the potential to increase scale, drive economies and thereby improve operating break-evens and cash generation to further enhance shareholder value.

Upcoming Results

The Company will announce its interim results for the six-month period ended 30 June 2020 in early September. This announcement will provide further detail on production, margins, operating break-even, costs and profitability – highlighting the growing value of the Company’s assets and continued strong financial performance.

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:

‘Sustaining production levels under the current exceptional circumstances is an incredible achievement and ought not to be underestimated. To maintain higher production levels with very limited financial investment and the added restrictions of COVID-19-secure practices is a testament to the strength of the business and ultimately the intense efforts of the team.

‘It is this extreme, and unexpected, stress testing event that has given the Company the increased confidence and ability to focus on scaling the business. When one considers our financial discipline, balance sheet strength and credibility, as well as our differentiated operating model and corporate ambition, we are very well placed to grow our business both organically and via external opportunities.

‘I must again thank all off our staff for their unstinting dedication to their jobs and responsibilities and to the supply chain and their employees for supporting our operations through this extraordinary period of both a challenge and now an opportunity.’

Source: Trinity Exploration

Trinity Exploration & Production plc

(“Trinity” or “the Group” or “the Company”)

Q2 2020 Operational Update

Strong production, financial resilience and cash to deploy enables focus on scaling the business

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, today provides an update on its operations for the three-month period ended 30 June 2020 (“Q2 2020” or “the period”).

Q2 2020 Operational Highlights

8.5% year-on-year increase in Group average production volumes to 3,272 bopd for the second quarter (Q2 2019: 2,996 bopd) without any new wells being drilled, representing broadly flat quarter-on-quarter production (Q1 2020: 3,291 bopd).
H1 2020 average production volumes of 3,282 bopd represent a year-on-year increase of 9.1% (H1 2019 3,008 bopd).
3 recompletions (“RCPs”) (Q1 2020: 3) and 17 workovers (Q1 2020: 39) were completed during the period, with swabbing continuing across all onshore assets.
Successful application of Weatherford’s Supervisory, Control and Data Acquisition (“SCADA”) with improved quantitative and qualitative performance from the wells
Improved problem diagnosis
More accurate operational responses to issues
Better understanding of system performance as related to technical design
Extending run-life
Greater optimisation of wells.
Production volumes for the remainder of 2020 will depend on oil price and general market conditions supporting the economic case for the resumption of drilling activity.
Even if the prevailing oil price environment does not support the case for a resumption of drilling in the near term, net average production for 2020 is still expected to be in the range of 3,100 – 3,300 bopd (2019: 3,007 bopd).

Q2 2020 Financial Highlights

Average realisation of US$26.4/bbl for Q2 (Q1 2020: US$46.3/bbl) yielding a H1 2020 average of US$36.3/bbl (H1 2019: US$59.1/bbl). As a result, no Supplemental Petroleum Taxes (“SPT”) will be payable with respect to H1 2020 production.
Cash balance of US$19.7million (unaudited) as at 30 June 2020 (31 December 2019: US$13.8 million, audited). The H1 2020 cash balance reflects:
Cash outflows for Q4 2019 taxes (including SPT) of c.US$2.2 million, as well as annual payments (such as insurance and licence obligations) of US$0.7 million and capex of c. US$2.5m during H1 2020.
Cash inflows of US$2.7 million (from the drawdown of the CIBC First Caribbean working capital facility), US$2.8 million (from the sale of the recently received VAT Bonds) and net hedge income of US$0.8 million received during H1 2020.
Robust production levels combined with strict cost controls resulted in an average operating break-even of US$22.6/bbl (unaudited) for Q2 2020 versus Q1 2020 at US$26.7/bbl (unaudited) and compared to US$26.0/bbl for Q2 2019.

The downward trends in operating break-even continues, with the June 2020 level of US$21.6/bbl (post hedging income: US$19.8/bbl).
The Company is on track to meet its target for average operating break-even (inclusive of hedging income) of US$20.5/bbl for FY 2020.

Operations Update

The Company’s field operations have not, to date, been negatively impacted by COVID-19, but we continue to monitor the situation and have put further appropriate measures in place (including temperature checks) and will continue to adapt as and when required.

On the Company’s east coast Galeota licence, dialogue continues with both Heritage Petroleum Company Limited (Trinity’s partner) and The Ministry of Energy and Energy Industries (Trinity’s regulator) in moving both the Trintes Field area and the TGAL field development forward. The Environmental Impact Assessment (“EIA”) study commenced in February with all dry season data collection having subsequently been completed and wet season data collection is due to commence shortly. Work on building the dynamic reservoir model continues on the TGAL development. This important work assists in optimal platform and well placement and in better understanding the best strategy to drain the maximum amount of reserves with the minimum number of wells.

New Business: Pursuing Scale

Trinity’s production model delivers free cash generation across a broad range of oil prices. This is underpinned by the Company’s drive to reduce costs and maintain industry leading operating break-even levels. Furthermore, the Company’s financial strength compared to many of its peers, where break-evens are higher and finances are potentially more constrained, means that it is well placed to take advantage of commercial opportunities as and when they arise.

Outlook

The focus remains on tight cost controls and maintaining profitable production in the current low oil price environment thereby preserving balance sheet strength. Progress towards the low target break-even highlights the strength of the Company’s operating model. The Company’s strong production base combined with its ever increasing use of analytics provides a solid base for continued organic growth. In addition, asset acquisitions and partnerships are another possible source of growth, offering the potential to increase scale, drive economies and thereby improve operating break-evens and cash generation to further enhance shareholder value.

Upcoming Results

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:

“Sustaining production levels under the current exceptional circumstances is an incredible achievement and ought not to be underestimated. To maintain higher production levels with very limited financial investment and the added restrictions of COVID-19-secure practices is a testament to the strength of the business and ultimately the intense efforts of the team.

“It is this extreme, and unexpected, stress testing event that has given the Company the increased confidence and ability to focus on scaling the business. When one considers our financial discipline, balance sheet strength and credibility, as well as our differentiated operating model and corporate ambition, we are very well placed to grow our business both organically and via external opportunities.

“I must again thank all off our staff for their unstinting dedication to their jobs and responsibilities and to the supply chain and their employees for supporting our operations through this extraordinary period of both a challenge and now an opportunity.”

Enquiries:

Trinity Exploration & Production

Bruce Dingwall CBE, Executive Chairman

Jeremy Bridglalsingh, Managing Director & Chief Financial Officer

Tracy Mackenzie, Corporate Development Manager

Tel: +44 (0)131 240 3860

SPARK Advisory Partners Limited (Nominated Adviser and Financial Adviser)

Mark Brady

Tel: +44 (0)20 3368 3550

Cenkos Securities PLC (Broker)

Joe Nally (Corporate Broking)

Neil McDonald

Derrick Lee

Tel: +44 (0)20 7397 8900

+44(0)131 220 6939

Walbrook PR Limited

Nick Rome

Grant under the Long-Term Incentive Plan

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, announces that on 25 June 2020 the Company issued awards under its Long-Term Incentive Plan (“LTIP”).

These awards have been made in accordance with the policy announced to the market on 25 August 2017 and have been made to certain individuals within the Company in respect of the performance of the Company as at the end of the financial year ended 31 December 2019.

As a result, the Company announces the grant of Options over 3,815,855 ordinary shares (representing 1 per cent of the Company’s issued share capital) under the LTIP on 25 June 2020, including the awards to Executive Directors shown in the table below.

Name	Position	NUMBER OF ORDINARY SHARES SUBJECT TO THE OPTION
Bruce Dingwall	Executive Chairman	1,186,919
Jeremy Bridglalsingh	Managing Director & Chief Financial Officer	791,281

The above Options will vest on 2 January 2023, subject to meeting the performance criteria set and continued employment in the Company, the Options are exercisable at nil cost by the participants.

The LTIP Awards are subject to the achievement of relative Total Shareholder Return (“TSR”) performance targets measured over a three-year performance period ending on 31 December 2022. The amounts shown above represent the maximum possible opportunity.

TSR is the increase in share price plus the value of any dividends paid over a period of time and captures the full return shareholders see on an investment. Relative TSR is the comparison of these returns against peer companies over a set period of time. For Trinity, the performance will be assessed over a three year period.

The Relative TSR ranking will be determined by calculating the three month average TSR to the end of the performance period and dividing this by the three month average TSR to the beginning of the performance period for all companies in the agreed comparator group. Companies will be ranked on this basis with the highest performing company ranked first. The share price used to calculate the start of the TSR calculation in respect of these awards is based on the three-month average TSR leading into 31 December 2019, being 9.683p.

The amount of the award which will vest at the end of the three year period is based on performance against a comparator group. Threshold vesting occurs when Trinity is ranked at median against the comparator group and maximum vesting occurs when Trinity is ranked at upper quartile (or above). The table below shows the level of vesting at threshold and maximum:

Vesting occurs on a straight line basis between threshold and maximum.

Performance	Vesting
Below the Median	None of the award will vest
Median (50^th percentile)	30% of the maximum award will vest
Between Median and Upper Quartile	Straight Line basis between these points
Upper Quartile (75%)	100% of the maximum award will vest.
Above the Upper Quartile	100% of the maximum award will vest

The above Options will vest on 2 January 2023, subject to meeting the performance criteria set and continued employment in the Company, the Options are exercisable at nil cost by the participants.

These filters create a comparator group which excludes larger companies that may be expected to be on the main list and micro explorers that can show extreme volatility and which can be numerous at certain points in the business cycle. For 2019, the market cap range of £20m-£400m has been deemed appropriate, but the Remuneration Committee will review the appropriate range for each new LTIP grant.

Trinity Exploration (AIM: TRIN): Partial Vesting of the 2017 Awards under the Long Term Incentive Plan

Trinity Exploration & Production plc

(‘Trinity’ or the ‘Company’ or the ‘Group’)

Partial Vesting of the 2017 Awards under the Long Term Incentive Plan

Trinity Exploration & Production plc (AIM: TRIN), the independent E&P company focused on Trinidad and Tobago, announces the partial vesting of the one off awards made under the Long Term Incentive Plan (“LTIP”) on 25 August 2017.

Further to the announcement of 25 August 2017, informing the Market that the Company had issued certain awards under its LTIP to the Executive Directors and other key employees (“Management”), the Company announces the partial vesting of these awards as a result of satisfying a portion of the performance criteria established at the time of the grant.

The Options are due to vest on 30 June 2022, subject to meeting a series of predetermined performance criteria. However, the Options can also vest in whole or in part on 30 June 2020 or 30 June 2021, to the extent that the relevant performance conditions have been met. Subject to meeting these conditions and continued employment with the Company, the Options are exercisable at nil cost by the participants. Participants have until 24.08.2027 to exercise any Options vesting under this tranche of the LTIP scheme.

The Company has satisfied certain performance criteria (the detail of which is set out below) and as a result 34.59% per cent of the awards made to Management vested on 30 June 2020.

Performance Criteria Set	Percent of options available to vest	Performance criteria achieved
Share price growth from the 2017 placing price of 4.98 pence per share. If the 3- month volume-weighted price (VWAP) at the testing date is 35 pence per share or more this element of the award vests in full. If the 3–month VWAP at the testing date is between 4.98 pence and 35 pence per share, this component of the award will vest on a pro-rated straight line basis.	70 per cent	The 3-month VWAP at the first testing date of 30 June 2020 was 6.95p. Therefore, 6.56 per cent of this performance criterion has been met.

Repayment of the amount due to the Board of Inland Revenue of Trinidad and Tobago in accordance with the terms of the Creditors Proposal approved in 2017, with repayment due by 30 September 2019.	20 per cent	Performance criterion achieved and the full 20 per cent of options vest.

Redemption of all the Convertible Loan Notes issued in January 2017 before the second anniversary of their issue.	10 per cent	Performance criteria achieved and the full 10 per cent of options vest.

Redemption of all the Convertible Loan Notes issued in January 2017 before the second anniversary of their issue.

The total number of Options vested on 30 June was 8,916,631 including those vested to the Executives detailed in the table below. A further 16,858,744 options will be re-tested under the Share Price Growth criterion on 30 June 2021 and 30 June 2022.

Whilst these Options have vested, as yet, none of the vested Options have been exercised by any of the Executives. These vested Options remain available to be exercised until 24.08.2027. The Company intends to apply for a single block admission to trading on AIM for awards exercised under the LTIP. A further announcement will be made as appropriate.

The Remuneration Committee believes that the Company’s LTIP continues to be an important tool for aligning the interests of the Trinity management team, including the Executives, with those of shareholders. The Share Price Performance criterion means that future grants will only take place when the Company’s share price appreciates in absolute terms and the total pool of Options issued in this tranche will only vest, in full, if the 3-month VWAP exceeds 35 pence at one of the future testing dates.

Enquiries:

Trinity Exploration & Production

Bruce Dingwall CBE, Executive Chairman

Jeremy Bridglalsingh, Managing Director & Chief Financial Officer

Tracy Mackenzie, Corporate Development Manager

Tel: +44 (0)131 240 3860

SPARK Advisory Partners Limited (Nominated Adviser and Financial Adviser)

Mark Brady

Tel: +44 (0)20 3368 3550

Cenkos Securities PLC (Broker)

Joe Nally (Corporate Broking)

Neil McDonald

Derrick Lee

Tel: +44 (0)20 7397 8900

+44(0)131 220 6939

Walbrook PR Limited

Nick Rome

Trinity Exploration & Production

Sale of US$ 2.8 million in VAT Bonds;
Further Strengthening of Liquidity Position

Trinity, the independent E&P company focused on Trinidad & Tobago (“T&T”), today announces the successful sale the VAT Bonds received from the T&T Government on 29 May 2020 (“VAT Bonds”) for US$ 2.8 million in cash.

This proceeds of the sale represent 100% of the face value of the VAT Bonds and result in a further strengthening of Trinity’s liquidity position, details of which are summarised below:

VAT Bonds with a principal value of US$ 2.8 million were received by Trinity on 29 May 2020
The VAT Bonds relate to VAT refunds due to Trinity from the T&T Government for all Group entities for the period up to 31 December 2019
The VAT Bonds were sold to a local financial institution on 29 June 2020
Trinity’s unaudited proforma cash balances following receipt of the proceeds of the bonds are approximately US$ 19.3 million (equivalent to c 4.0p/share)

This further strengthens Trinity’s already strong liquidity position and enhances its ability to take advantage of any growth opportunities that may arise as a consequence of the current low oil price environment.

Bruce Dingwall CBE, Executive Chairman of Trinity, commented:

“At all levels of Government, the co-operation and support we have received has been instrumental in helping us to sustain our operations throughout the COVID-19 pandemic. The Board of Inland Revenue moved quickly to deliver the VAT Bond Programme and we are grateful for their support.”

“We are encouraged by the recent improvement in oil prices and, given the robust nature of our operations and strong balance sheet, we remain well placed despite the challenging environment. We continue to prudently manage our operations, remain highly resilient to low oil prices and confident we can ride out the storm and be open to capture the opportunities that will inevitably exist for the more robust and low cost operators.”

For further information please visit: www.trinityexploration.com or contact:

Trinity Exploration & Production plc	+44 (0)131 240 3860
Bruce Dingwall CBE, Executive Chairman Jeremy Bridglalsingh, Managing Director & Chief Financial Officer Tracy Mackenzie, Corporate Development Manager


SPARK Advisory Partners Limited (Nominated Adviser and Financial Adviser)	+44 (0)20 3368 3550
Mark Brady


Cenkos Securities PLC (Broker)
Joe Nally (Corporate Broking) Neil McDonald Derrick Lee	+44 (0)20 7397 8900 +44 (0)131 220 6939



Walbrook PR Limited	+44 (0)20 7933 8780
Nick Rome	trinityexploration@walbrookpr.com

Deepwater round-All open acreage eligible

25 June 2020

By Caroline Evans

Trinidad & Tobago government has extended by six weeks the nomination period for a deep-water bid round scheduled to take place later this year.

Energy Chamber – Energy Efficiency and Renewables Conference
Shaping the Caribbean’s Energy Future

June 25

The “biggest roadblock” to the investment in renewable energy projects in the Caribbean are the investor regulations that are in place, Martin Vogt, managing director of German investment and asset management company MPC Capital told the virtual conference session on “Attracting capital for renewable energy projects.”

“As a foreign investor, we really prefer and like to invest in projects where we have also local capital in the capital structure, local equity and we can only do that if the local investment regulations allows local insurance companies, pension funds, and other institutional investors to directly invest in these projects and we see that in many cases the investment regulations for those parties is not demanded in a way that provides an enabling environment in order to deploy capital from resources.”

“I think it is very important because otherwise, it will create a situation where only foreign capital comes under the benefit of renewable energy projects and there is very limited retention of benefit in the country as dividends and basically the benefits, are being repatriated out of the region again.”

Vogt said for an emerging market it is important that benefits stay in the region and with that also comes the investor experience. Over the next two years, MPC Capital aims to raise US$90 million from US-based impact investors, institutional investors and foundations. The money will be allocated to up to 15 renewable infrastructure projects in the Caribbean.

MPC Capital made its first investment in the renewable energy sector in the Caribbean in 2016 and has since then continuously expanded its local footprint and activities.
The projects, which total approximately 200 MW of installed capacity, will generate clean energy and reduce the region’s dependence on fossil fuel imports.

MPC Capital made this commitment with the Clinton Global Initiative Action Network and will depend on the engagement with CGI for partnerships to enable investments.

Alicia Taylor, investment management lead officer, infrastructure and energy division at the Inter-American Development Bank, said IDB Invest was committed to providing capital for the renewable projects once all the criteria are met.

“To attract capital for renewable energy projects it is important to have an enabling environment where developers feel that there is stability and investors feel that they can make a reasonable return it is also critical to have a strong EPC (engineering, procurement, construction) contractor, a bankable PPA (power purchase agreement) and a technically sound sponsor especially in T&T and the Caribbean we are prepared to support not just the large projects.”

Carlton Thomas from National Energy said now more than ever is a good time to accelerate the transition regionally to clean energy.

“The potential for renewable energy and energy efficiency in the Caribbean is very strong. There are initiatives that can be undertaken to both spur growth in jobs and overall economic improvements while at the same time contributing to the reduction in harmful emissions and improve efficiency across the region.”

Caribbean states lack sufficient financial resources to accelerate the clean energy transition at the speed that is required. A post COVID-19 world can be a riskier space for finance but investors and governments can collaborate to address sector-wide risks. More robust regulatory and environmental legislation can assist with the pace of the transition.
Scale is important to attract more competitive financing. Regional collaboration is important to realise scale.

BPTT regional president Claire Fitzpatrick said trillions of dollars would be needed if the world is to avert disaster from global warming.
BP statistical review of world energy reported global carbon emissions are expected to grow by 10 per cent in the next 20 years. In order to deal with global warming carbon emissions need to be reduced by half the current rate.

Fitzpatrick said the energy that is produced must therefore be kinder to the environment. Renewable energy now provides 10 per cent of the power globally and is the fastest growing source of energy expected to ultimately become the largest source of power in 20 years. BP is striving to become a net zero company in the coming decades.

Prime Minister Rowley in his feature address announced two major solar projects that will generate power at a cost on par with current electricity prices. The Roadmap to Recovery team recommended stimulating activity in the area of energy efficiency and setting ambitious targets for increased power generation from renewables.

The Ministry of Energy and Energy Industries (MEEI) announced the winning bid in response to a Request for Proposals (RFP) for Utility Scale Renewable Energy Projects. A consortium of Lightsource Renewable Global Development Ltd (Lightsource BP), Shell T&T Ltd and BP Alternative Energy T&T Ltd submitted successful proposals for two projects.

These projects will generate 92.2 MW of electricity from solar photovoltaic (PV) sources at Couva; and 20 MW of electricity from solar PV sources at Trincity, at a cost that is on par with the current electricity prices .The projects form part of an overall plan by the government to reduce carbon emissions by 2030.
The aim is to achieve a reduction in overall emissions from the three sectors by 15 per cent by 2030 from Business as Usual (BAU), which in absolute terms is an equivalent of one hundred and three million tonnes of carbon dioxide equivalent.

In its Renewable Energy Market Update for May 2020, the International Energy Agency noted that the Covid-19 crisis is negatively impacting global growth in renewable power capacity.

“Now more than ever, renewable energy and energy efficiency initiatives are needed as we come face to face with a rapidly changing energy and economic landscape, combined with the threat of climate change. However, in addition to looking to renewable energy and energy efficiency to secure a clean, sustainable future for generations to come, it is also our duty as the Government .. to ensure that we are maximising the use of the country’s rich natural resources to the benefit of the citizens. We must, therefore, re-examine how we derive the greatest value from our natural gas.”

Chief executive officer of the Energy Chamber Dr Thackwray Driver described the announcement as a game-changer. “I can’t help noting one thing in particular when you were discussing the utility scale solar your comment that we would be producing energy on par with local electricity costs, now that’s a big announcement because local electricity has been cheap and it has been historically cheap and if we’re able to produce solar on par with that that’s a game-changer.”

BP and Shell submit winning bid on Trinidad solar projects

Supermajors to partner on utility-scale renewable energy project

24 June
By Caroline Evans

A partnership that includes supermajors BP and Shell submitted the winning bid to build two utility-scale solar projects in Trinidad & Tobago,

NGC launches energy efficiency app

Jun 27 2020

The National Gas Company (NGC) launched an App which can be used to identify consumers’ energy use of everyday appliances.

NGC EnergySmarTT App is technology driven and focuses on harnessing technology for greater efficiencies and effectiveness as NGC is pushing toward more efficient energy use and resources.

As a tool, the App can provide users with information on potential monetary savings from using more energy efficient products, as well as share the benefits and opportunities energy efficiency offers for addressing climate change.

The App has five main functions including:

•My consumption: An energy calculator for understanding how using a particular device could affect consumers’ pocket and carbon footprint

•Switch and Save: A cost benefit analysis to illustrate the overall savings of purchasing EE products

•Energy Saving Tips: Simple steps households can make to become more energy efficient

•Locate Energy Saving Products: This enables EE product suppliers and consumers that are interested in EE products to connect

•Useful Resources: Provides access to links that give greater context on the developments in energy efficiency and renewable energy within the region and globally.

Mark Loquan, President of NGC said this was another step needed to propel the country forward into a more energy efficient and energy conservation mindset.

Improved energy efficiency has two major benefits including a cleaner way of living which benefits the environment and a more cost-efficient way to use energy for everyday activities.

The App forms part of NGC’s strategy to support T&T’s mandate to reduce emissions and incorporate renewable sources of energy into the nation’s energy mix, Loquan added.

Additional features for the App will include increased functionality to assess multiple appliances at once, an online community for schools and EE/RE professionals to connect, engagements strategies such as educational RE/EE games, and making the App compatible for regional application.

The NGC EnergySmartTT App can be accessed Google Play and Apple App Store. (GKA)

Point Lisas plant closures

NEWSDAY 9 july

Point Lisas Nitrogen Ltd.

. Image taken from plnltt.com –

In the energy hub, once the world’s largest exporter of ammonia, closure of ammonia facilities at Point Lisas exacerbates economic distress.

Traumatic developments were precipitated by a fall in natural gas prices that has made other markets cheaper as well as oversupply amid the pandemic economic crisis.

Tringen I is due to shut for maintenance in August in response to current market conditions, according to Norwegian operator Yara International. This will be the second plant to be closed by Yara in the past six months. The plant, due to close earlier, secured a last-minute sale for export.

On December 31, Yara shut down Yara Trinidad, the smallest of three plants it operates in Pt Lisas. The other two are Tringen I and Tringen II which Yara jointly owns with National Enterprises Ltd, TT’s investment holdings company.

In June, Nutrien shut its plant which would remain down. In May, PCS 02 was also shuttered.

Such closures are not unprecedented. Turnaround activity in the industry is often needed, as in 2018 at the Tringen II and Point Lisas Nitrogen Ltd (PLNL) ammonia plants. Once these activities ended, sharp production increases were recorded, offsetting declines in production.

Now history might not repeat itself.

Implications for gross domestic product (GDP), revenues, employment and economic activity are severe. Ammonia is key in the basket of energy commodities that contribute about half of TT’s exports.

These are some of the matters to be addressed in the post-covid19 recovery plan.

The phase one report of the committee appointed to develop a Roadmap to Recovery for TT was tabled in Parliament days before dissolution.

It is hoped political parties will use the campaign to discuss the document to preserve continuity. The report, first of a long-term plan, is subject to scrutiny. There are questions over whether the work of the committee will be preserved after resignation of the vice-chairman, political disagreement over publication schedules and scope and the the imminent election.

Under a caretaker government, the economy must function on auto-pilot, given the traditional policy restraint before a poll. The struggling market and closures suggest there is little time to spare.

Yara closes second ammonia plant

The local ammonia sector continues to reel under a slump in international prices as another plant at the Point Lisas Industrial Estate will be shuttered this month.

As of July 7, the Tringen I plant will stop producing ammonia “due to current market conditions”, Tringen’s operator Yara International announced . While the plant is down, planned maintenance will be done by employees. This is the second plant to be closed by Yara in the past six months.

“The COVID-19 global crisis has put ammonia markets under significant pressure due to a reduction in industrial ammonia demand. The competitiveness of ammonia produced by Tringen has also been impacted due to a fall in natural gas prices paid by competing ammonia producers in major markets.”

Tringen I has a production capacity of an estimated 500,000 tonnes per year.

“The plant will resume operations at the earliest possible time when market conditions are supportive.“

The company did not say what will be the fate of its third ammonia plant Tringen II.

Last December 31, Yara shut down Yara Trinidad, the smallest of the plants it operates in Pt Lisas. The other is Tringen II which Yara jointly owns with National Enterprises Ltd, TT’s investment holdings company.

On November 13, Yara had announced a fall in profits and failed negotiations on gas supplies with the National Gas Co (NGC) were keys reasons for the closure of Yara Trinidad.

At the time, the company and the Oilfield Workers Trade Union were in discussion on separation packages for affected workers.

In response then, the NGC assured it would maintain gas supplies to customers. NGC had said the Yara plant contributed five per cent of ammonia production with an annual output of 270,000 tonnes.

NGC felt the effects of the volatile local and global energy industries.

Nutrien shuttered its plant which it said would remain down amid the price slump.

The plant was initially shut down on June 12 for maintenance work, however, when this was completed it remained closed for another 14 days.

Nutrien Trinidad said then it was monitoring the global market price of ammonia to determine its next move. In May, PCS 02 was also shuttered due to economic challenges.

A recent International Commodity Information Service (ICIS) report said ammonia prices would remain “bearish” in June, quoting a US$218 per tonne estimate. Prices are falling due to an oversupply, stated ICIS.

Editor’s note: This story was amended on July 4 to correct that Yara International is not the parent company of Tringen I.

Heritage earns $5.4b in 10 months

Heritage Petroleum tank farm on the Southern Main Road, Point Fortin. Heritage on Thursday reported earnings of $5.4 billion and $1.4 billion in profit in ten months up to September 30, 2019. – Lincoln Holder.

Heritage on Thursday reported earnings of $5.4 billion and $1.4 billion in profit in ten months up to September 30, 2019. – Lincoln HolderHeritage Petroleum tank farm Point Fortin.

Heritage Petroleum Co Ltd earned $5.4 billion for its first ten months of operation. In its audited financial statements for the period ending September 30, 2019, the company turned a $1.4 billion profit and made no taxation expense. The company held $1.16 billion in cash and cash equivalents for the end of the period.

According to the accompanying notes on the financial statements (Note 2), Heritage is owed $1.47 billion from transactions from related parties (the State and other state enterprises), including $48.3 million in VAT refunds. It is owed $515 million from parent company TPHL mainly from loan principal repayments, interest obligations and cash advances. It is owed $900 million from Petrotrin for fees and transactions related to restructuring and asset transfers.

The company owes Government $185.7 million in taxes other than income tax ($23 million) and royalties ($162 million).

According to Note 16, the revenue breakdown, the company earned $4.8 billion from crude oil sales; $329 million from natural gas sales; $229 million in royalties; and $11.1 million from natural gas liquids. Note 20 explained that for the period, the company paid $89.3 million for employee benefit expenses including $63 million in salary and wage benefits.

BPC and Columbus combine

BPC consolidates its expansion into Latin America with takeover of Trinidad producer Columbus Energy Resources
Caribbean-focused explorer Bahamas Petroleum (BPC) told investors it will merge with regional peer Columbus Energy Resources, just days after expanding its portfolio into Latin America.

The £25.1mn ($31.8mn) deal will transform BPC into a full-cycle exploration and production company with additional onshore acreage and production in Suriname and Trinidad.

“The combination of Columbus and BPC will create a Caribbean and Atlantic margin-focused oil and gas ‘champion’, with assets that range across the full spectrum of oil and gas activities, from exploration, appraisal and development to production,” says BPC. The firm expects to finalise the deal before the end of August.

Making sense

The rationale for the merger is not immediately obvious. Both firms have very different expertise and backgrounds. Columbus holds low-risk Latin American onshore resources, while BPC is a high-risk exploration company with acreage in deepwater frontier basins. The move also exposes BPC to volatile oil prices for the first time.

BPC top brass are confident global oil demand will recover post-lockdown and that oil prices will therefore improve. Columbus also made a significant oil discovery in April that could boost the new company’s reserve base. The Saffron well was drilled onshore Trinidad and is described by CEO Leo Koot as “transformational”. Columbus next plans to drill a test well at the Weg Naar Zee block in Suriname.

£25.1mn – Merger cost
BPC’s priority is clearly to diversify its asset base. Just days before the merger announcement, the firm added Latin American assets to its portfolio. The company successfully bid on a Uruguayan shallow-water licence for an initial four-year exploration period at a cost of $200,000/yr, with no drilling commitments, royalties or signature bonuses.

The relatively low entrance cost allows the explorer to move away from its traditional Caribbean asset base without heavy development expense or obligations. BPC’s finances are also in a strong position, with no debt, in sharp contrast to many producers struggling with looming maturity payments.

BPC will assess existing seismic in Uruguay before conducting further geological tests on its new licence. Current mapping suggests a resource potential of up to 1bn bl of oil.

Heading into the unknown
No commercial discoveries have been found onshore or offshore Uruguay. Dry wells were drilled in the licence in the 1970s by Chevron, while Total also recorded a duster at the Raya-1 prospect in 2016—at the time the world’s deepest well.

Geology similar to the prolific Guyana-Suriname basin has been encouraging fresh explorers to enter the region. US independent Kosmos Energy agreed to acquire two licences adjacent to BPC’s licence in December and has delayed agreeing terms only due to the Covid-19 pandemic. Uruguay’s NOC and state regulator Ancap still believes the deal will soon be finalised.

Across the maritime border in Argentina, many IOCs including Shell, BP, Total and Norway’s Equinor won licences last year. Offshore acreage spanning both countries is believed to be analogous.

Turning point

The immediate priority for BPC is its Caribbean exploration campaign, which has been rescheduled to December because of Covid-19 disruption. The company plans to drill the Perseverance prospect in the Bahamas’ Cooper block, adjacent to the maritime border with Cuba.

To date, like Uruguay, no commercial oil volumes have been found offshore the Bahamas. Exploration began in the 1950s with the drilling of the Cay Sal well, and decades later another well was spudded at the Doubloon Saxon prospect. Neither led to a major oil discovery or significant proven reserves.

Updated seismic data has more recently revived hopes for the oil potential of the Bahamas foreland basin. Three of BPC’s four blocks have multiple stacked plays buried deep within the cretaceous layer with oil potential.

Another promising sign for BPC is that the geology in the basin is strikingly similar to several world-class plays. It is analogous with Mexico’s Ku-Maloob-Zaap field, the most prolific in the country, and the Zagros mountains, which stretch from southern Iran into the Kurdistan region of northern Iraq and are the Middle East’s second-richest oil and gas region after the Central Arabian basin.

“First oil could coincide with a supply deficit and higher oil prices” Montgomery, Welligence Analytics
An independent third-party resource assessment, carried out in 2017 by upstream research consultancy Moyes & Co, valued BPC’s unrisked ultimate mean recovery in the basin at 1.6-3.3bn bl of oil, with an upside potential of 11bn bl. The consultancy estimated the chance of success for drilling at each stacked reservoir was 25-35pc—a moderate rate.

Timing it right
BPC must hope that any material discovery in a virgin province coincides with a significantly less gloomy outlook than currently—lest its success is met more with a shrug than an uptick in investor sentiment. It could be in luck.

Consultancy Rystad Energy estimates a shortfall that will emerge as and when oil demand recovers owing to the Opec+ alliance’s production cuts will reach 4.6mn bl/d in July and rise to a peak of 5.2mn bl/d by January. “We believe Opec+ is attempting to create a mini-bull-cycle by quickly tightening the prompt market, helping depressed prices,” says Bjørnar Tonhaugen, the firm’s head of oil markets.

If a hit with the drillbit coincides with economics that make the project viable, “BPC may be able to benefit from lower development and exploitation costs”, says Ruaraidh Montgomery, director at Latin American research consultancy Welligence Analytics. Further along the line, “first oil could coincide with a supply deficit and higher oil prices”, he predicts.

For BPC to keep the project moving, it must secure further financing and, potentially, a larger partner to carry its costs. Even in the current challenging conditions, that search remains ongoing, says Montgomery, particularly given the crucial technical expertise needed and the cost of a floating production storage and offloading (FPSO) vessel.

While the Bahamas does have some existing oil infrastructure in place, to become an oil producer the country would most likely need to follow the Guyana template. Major ExxonMobil has largely single-handedly funded its oil development and already brought an FPSO online at its Liza oil discovery. The company has plans for at least a further two, which significantly improves the economics for other drilling prospects offshore Guyana.

Paria posts $109m profit, $7.3b in revenue

Paria Fuel Trading Co Ltd earned $7.3 billion in revenue and a profit after taxes of $109 million in its first ten months of operation.
The company also maintained a positive cash flow from operating activities of $487.7 million, with $575,000 used in investing activity.
In audited financial statements for the period ending September 30, 2019, chairman Newman George said the company’s performance “demonstrates its thriving success.”

“The company has exceeded expectations by generating a profit despite the low margins associated with the fuel trading business.” Paria began operations on December 1, 2018, following the dissolution of its predecessor Petrotrin in September that year. Paria took over Petrotrin’s bunkering and fuel trading business, while its sister company Heritage Petroleum took over the exploration and production business. Both fall under the umbrella of Trinidad Petroleum Holdings Ltd (TPHL).

Paria paid $83.7 million in income tax, $291.9 million in VAT and $72.6 million in corporation taxes and green fund levy payments. Of the 13.4 million barrels of fuel the company sold in the period, 7.2 million went to the local market. The company facilitated the export of 11.2 million barrels of Heritage crude oil. The company continuously invested in ensuring the asset integrity of its port and terminalling facilities. “As the company manages to lower demand for fuel due to the covid19 restrictions, the board and management have been placing greater emphasis on business efficiency and lowering the cost of operations to ensure sustainable profitability.”

Operations were classified in the summary statement of comprehensive income (the income statement) as “discontinued operations” because the company, and its sister, Guaracara Refining Co Ltd, are now considered “assets held for sale” after the announcement last September that Patriotic Energies and Technologies Co Ltd had won the bid to purchase the Pointe-a-Pierre refinery’s assets, which include Paria’s infrastructure.

PARIA – Summary Financial Statements

NEWSDAY

Hydrogen

French hydrogen specialist HDF Energy and Kenesjay Systems Ltd signed a letter of intent (LOI) to establish a partnership for the development of the NewGen carbon-neutral and green hydrogen project. The main principles and terms are under discussion for a comprehensive MoU to be signed in the next two months. This will signal a longer-term collaboration between the two firms for similar projects in the future.

By introducing a new source of carbon neutral and green hydrogen to the petrochemical sector of Point Lisas at a competitive cost, the NewGen hydrogen project will play a key role in the drive towards a decarbonising transition of the energy industry. Hydrogen will be generated on an industrial scale from carbon-neutral and renewable sources of electricity using an electrolysis process.

As a project developer and long term-investor, HDF Energy is strengthening its position in the Caribbean where it successfully implemented the first hydrogen infrastructure participating in the de-carbonisation of the electricity sector in Martinique. Plans by the company are well underway for the construction of the world’s largest hybrid power plant with hydrogen storage in French Guiana. A similar project is under development in Barbados.

Damien Havard, CEO HD Energy Ltd.
Their hydrogen expertise complements the experience of Kenesjay over its 20-year history in the energy sector of TT. This combination promises to deliver the NewGen project with exceptional results.

Expressing excitement at the collaboration, Damien Havard, CEO of HDF Energy said, “We are excited to be working with NewGen and Kenesjay which has extensive experience and in-depth knowledge of the energy sector in Trinidad. We believe that NewGen will be the gateway project to a green hydrogen economy in Trinidad and Tobago, and that the model can be successfully duplicated given the extensive local demand for hydrogen.”

Havard also guaranteed that HDF will ensure that the project benefits from the best available technology, performance and cost efficiencies – resulting in competitive decarbonisation of ammonia production. He also stated that “This partnership strengthens our unique position as the preferred infrastructure developer for hydrogen-related projects in the Caribbean and at the international level.”

Refinery deal

At the launch of Petrotrin Land Distribution Programme for terminated Petrotrin employees in Palo Seco, the prime minister said the Government is ready to sign off on the sale of the defunct Pointe-a-Pierre refinery to Patrioric Energies and Technologies Company Ltd.

“It is the intention of the Government of Trinidad and Tobago, in the coming days, to sign off with the OWTU and beginning of the way back for the Petrotrin refinery, known today as the Guaracara, as soon as the OWTU is ready to commit itself to what I had said in this statement today and provide its commitment by its signature.”

The Oilfields Workers’ Trade Union’s Patriotic Energies and Technologies Company Ltd was chosen as the preferred bidder for the refinery from amongst 77 companies that showed interest in acquiring the assets after the Government closed down the refinery in November 2018.

Patriotic Energies was the only company that made an upfront payment offer of US$700 million.
In Fyzabad last month, OWTU said they were close to acquiring the refinery.
With the signing of the agreement the country would have solved yet another problem, as the restart of the refinery will stimulate creation of 7,000 jobs in the short and medium-term.
However, this outcome has not been without pain and acrimony.
Outlining the salient points in the draft agreement Government sent to Patriotic Energies in March, Rowley said this includes the schedule of work and costs of the refinery start-up activities and the restart date of the refinery to be 12 months from the closing date.
The land distribution programme for former Petrotrin workers who were terminated will see them being given residential and agricultural plots around the country. The programme will be done in two phases, with 1,000 lots being given out in the first phase.

Proposed draft agreement deal for the Petrotrin refinery with Patrotric Energies and Technologies Company Ltd-

• The completion of the detailed inspection of the assets, inclusive of an inspection test plan

• The schedule of work and costs of the refinery start-up activities

• The concluded definitive financing terms for the seller’s credit note with Trinidad Petrotrin Holdings Ltd and Trafigura or any other similar entity

• The receipt of all licenses and approvals and successful negotiations of all collateral agreements

• Associated land for leasehold will be for a period of 99 years

• The period of handover of the logistics assets, inclusive of the terminalling operations of Paria, following the start-up of the refinery assets by six months with written safeguards of national fuels supply and fuels supply security, meaning that the refinery will have to be up and running for six months before the Government concludes the handing over of the terminal arrangements and documentation of the required licenses with safeguards for the supply of fuel to the nation.

• The restart date of the refinery to be 12 months from the closing date.

Energy sector alive and kicking

Jul 15 2020

Energy Minister Franklin Khan says the sector is not dead in Trinidad and Tobago.

.”..The energy sector, despite the challenges, is alive and kicking.”.

“We are not burying our heads in the sand. We face serious challenges. It baffles me before I go to sleep in the night to understand how can we keep the investments level so high. I thank God for it and our gas production profile, while it is still not where we want it, it is not disastrous and we will hang in there and we will ride through this period of low commodity prices and when we build the future and when we build the economy of the energy sector in 22, 23, 24 and to 25, I think Trinidad will be in a good place.”

The impact of the COVID-19 pandemic on domestic upstream companies has been minimal as companies continue to operate.

“The majority of development and exploration activities are on stream and any deferral is for a short time frame. As a consequence, oil and gas production has been maintained at relatively pre-COVID-19 levels.”

“Gas production is currently at 3.5 bcf per day and oil production is averaging 57,000 barrels of oil per day. As a matter of fact, in April this year oil production reached 60,000 barrels per day for the first time in 18 months.”

However, at the petrochemical sector, ammonia and methanol were at their lowest level in years, averaging between US$200 and 250 per metric tonne.

“Due to the surplus global capacity and the impact of COVID there is significant reduction in the industrial demand for ammonia and methanol, leading to very depressed prices. So we have temporarily shut-in certain plants in Point Lisas, not because we did anything wrong you know, it is because the global demand is so low that prices have reached rock bottom and prices are now below your cost of production.”

These plants will be doing maintenance over the next three months and have also retained their staff.

T&T is the only country where Shell and BP have maintained their investment levels. .

He said they have also seen positive outcomes with the restructuring of Petrotrin.

Oilfields Workers’ Trade Union

Patriotic Energies and Technologies Company Limited is close to finalising its deal with the Government for the purchase of the Pointe-a-Pierre refinery.

Delivering his Labour Day speech in Fyzabad Ancil Roget said when the union takes over the refinery there will be a thrust to increase profitability and promised 4,500 new jobs soon,

“With the highest degree of operational reliability and efficiency, Patriotic is going to guarantee a reliable supply of fuel for the local consumption and for foreign exports, Patriotic will bring back regular gasoline for the fishermen. Patriotic will contribute to arts, culture, the sports and to youth development.”

He was concerned about the loss of jobs, high crime, the failure of the Government to implement labour legislation, the mismanagement of the economy and corruption.

“The Government ignored Labour’s Economic Alternative Plan and even their own Economic Advisory Board. The Minister of Finance raised the price of fuel, not once, not twice but three times.”

He called on the Finance Minister to begin discussions with trade unions to settle outstanding negotiations.
He seeks a national discussion on crime.

“We also call for the government to commit resources to treat will all aspects of crime, from the socio-economic conditions to the protection of our borders, to the eradication of white-collar crime.
The murder rate continues to increase. According to T&T Crime Statistics, in 2016 there were 463 murders, in 2017 it was 494, in 2018 it was 516 and in 2019 it was 538, totalling 2,011 persons. 2,011 human beings being murdered.”

There has been the issue of increased illegal immigrants coming from Venezuela.

“Among those immigrants are hardened criminals and Venezuelan gang members who have now found it easy to continue their illegal activities of drugs, arms and prostitution in our country.”

Ramnarine: refinery deal

The decision to close the Petrotrin Refinery deal with Patriotic Energies and Technologies Company Ltd has been met with favour and scepticism, on the eve of a general election.

Former Energy Minister Kevin Ramnarine said, “It is clear to me that the rush to finalise this arrangement is, of course, related to the pending election.

“It does not take a genius to figure that out. I mean the refinery was closed down on the November 30, 2018. They have had 19 months to do this and they are now bringing it on the eve of the general election. To me I find that too be too convenient.”

He said the country should pay close attention to the impending deal that would certainly become an election issue if signed.

At the launch of the Petrotrin Land Distribution Programme for workers who were terminated, the Prime Minister announced his readiness to sign off on the agreement with the Oilfield Workers Trade Union (OWTU).

Patriotic which won the bid from among 77 expressions of interest, is a fully-owned subsidiary of the OWTU.

Representatives from the government, the OWTU and Trinidad Petroleum Holdings Ltd (TPHL) held meetings to hammer out the arrangements.

Ramnarine said once the transaction is finalised there will be no need for approval by the Parliament. As far as he is aware all of the assets of Petrotrin were vested in TPHL by and Act of Parliament in 2018 before the closure of the oil company in November that year.

Although there is no need for Parliamentary approval for the disposal or lease of the assets, he still believed something of this magnitude should be the subject of a Parliamentary debate.

“At the end of the day you must remember that this country spent about US$1.5 billion to upgrade that refinery so what ever people may think about that refinery, the fact of the matter is that taxpayers spent close to TT$10 billion to upgrade that refinery and significant parts of the refinery are new. So it is therefore reasonable to expect the people of TT should have full disclosure about this arrangement between government and Patriotic.”

Ramnarine said he was concerned that the transaction was happening without procurement regulations in place. “The procurement regulations have not yet come into effect. As a result, the procurement regulators do not have all the instruments that the regulator needs to be effective.”
Commenting on Rowley’s announcement, economist Dr Roger Hosein said if Patriotic could raise the relevant resources to get the process started, “by all means I am in support.

“I am in support because it will benefit the fence-line communities, it will benefit the wider national TT economy. So once TT benefits, I think that is what we all want.”

However, he said he hoped the enthusiasm to sign off and get the economy rolling, was not a façade.

“What I hope is not happening, is a smoke screen. I hope this is not just some form of politicking to win the election or make strides to win the election that there is the suggestion that progress is being made.”

“It is in the interest of the government of TT after August 10 that we try to restart the refinery. It would create a wave of jobs and this wave of jobs will benefit everyone.”

Hosein said a sound strategic model was needed to ensure that the restart of the refinery took place in a way that did not strain the taxpayers more than it did before it was closed down.

Weighing in on the details of the deal, Hosein said, contrary to what some were saying, there is a lot of information available from the budget speech, the mid-term review and from some of the pronouncements being made at the moment. But certainly it must not be a situation where there is a greater or renewed dependence on taxpayers to support the refinery as it moves forward. If it is a private sector transaction, let it be a private sector transaction.”

Trinidad & Tobago National Petroleum Marketing Company Limited

Jun 23 2020

NEWSDAY

International US$500M Bond Issue

Finance Minister Colm Imbert reported a very successful US$500 million Republic of Trinidad and Tobago International Bond Issue.

Within hours of launching, the bond offer was over-subscribed by more than 200 percent.

The full text of an official statement from the Ministry of Finance, follows…

MINISTRY OF FINANCE ACHIEVES A VERY SUCCESSFUL
INTERNATIONAL US$500M BOND ISSUE

The Minister of Finance, the Honourable Colm Imbert M.P., wishes to advise that the Ministry of Finance today achieved a very successful US$500 million Republic of Trinidad and Tobago International Bond Issue.

The US$500M 10-year Bond Offer was launched by Credit Suisse internationally at 8:30 a.m. this morning with an initial interest rate in the vicinity of 4.75%.

By 12:15 p.m., 3 hours and 45 minutes later, the Bond Offer had been oversubscribed by 219%. A total of US$1.66 Billion was received in offers from a wide range of high-quality international investment firms, investment funds and investment banks.

The Offer Book was eventually settled at US$500 Million at an interest rate of 4.5%, the same rate as previous bond issues at earlier times when our fiscal situation was much better than it is at this time.

The Minister of Finance considers it a tremendous achievement on the part of his Team at the Ministry of Finance that in the midst of the very challenging Covid-19 Pandemic, with depressed oil and gas prices, and all of the economic difficulties associated with the public health restrictions, that the Government was able to successfully issue a 10-year US$500 Million Bond with high quality investors, in less than 4 hours on the international market at an interest rate of 4.5%.

This achievement is due in no small measure to the successful attainment by the Ministry of Finance of good international credit ratings within the last two months in the face of the economic fallout of the Covid-19 Pandemic.

It is also testimony to the confidence reposed by the international financial community in the management of the country’s finances under the present leadership at the Ministry of Finance.

Special compliments must go to Credit Suisse and its local partner First Citizens Bank who were selected as the Joint Lead Managers for this transaction through a rigorous competitive bidding process, for being able to successfully complete this significant international financing bond issue in less than one business day.

TRINIDAD

TOUCHSTONE ANNOUNCES SIGNIFICANT CASCADURA INDEPENDENT RESERVES EVALUATION

Advisories

Reserve Advisory

Definitions of Petroleum Reserves

The reserves have been categorized accordance with the reserves definitions as set out in the COGE Handbook, which are set out below.

“Proved Developed Non-Producing Reserves” are those reserves that either have not been on production or have previously been on production but are shut-in, and the date of resumption of production is unknown.

“Proved Reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely that the actual remaining quantities recovered will exceed the estimated proved reserves.

“Probable Reserves” are those additional reserves that are less certain to be recovered than proved reserves. It is equally likely that the actual remaining quantities recovered will be greater or less than the sum of the estimated proved plus probable reserves.

“Uncertainty Ranges” are described in the COGE Handbook as low, best, and high estimates for reserves and resources as follows:

Oil and Gas Measures

Forward-Looking Statements

Abbreviations

bbl barrel Mbbl thousand barrels

MMcf million cubic feet Bcf billion cubic feet MMBtu million British Thermal Units

boe barrels of oil equivalent boe/d barrels of oil equivalent per day Mboe thousand barrels of oil equivalent

Trinity Exploration Q2 2020 operational update

Trinity Exploration & Production plc

Grant under the Long-Term Incentive Plan

Trinity Exploration & Production

Sale of US$ 2.8 million in VAT Bonds; Further Strengthening of Liquidity Position

Deepwater round-All open acreage eligible

Energy Chamber – Energy Efficiency and Renewables Conference Shaping the Caribbean’s Energy Future

BP and Shell submit winning bid on Trinidad solar projects

NGC launches energy efficiency app

Point Lisas plant closures

. Image taken from plnltt.com –

Yara closes second ammonia plant

Heritage earns $5.4b in 10 months

BPC and Columbus combine

Making sense

Turning point

Paria posts $109m profit, $7.3b in revenue

PARIA – Summary Financial Statements

Hydrogen

Refinery deal

Energy sector alive and kicking

Oilfields Workers’ Trade Union

Ramnarine: refinery deal

Trinidad & Tobago National Petroleum Marketing Company Limited

International US$500M Bond Issue

bbl barrel
Mbbl thousand barrels

MMcf million cubic feet
Bcf billion cubic feet
MMBtu million British Thermal Units

boe barrels of oil equivalent
boe/d barrels of oil equivalent per day
Mboe thousand barrels of oil equivalent

Sale of US$ 2.8 million in VAT Bonds;
Further Strengthening of Liquidity Position

Energy Chamber – Energy Efficiency and Renewables Conference
Shaping the Caribbean’s Energy Future