Trinity Exploration & Production PLC (TRIN): The Suspension Lifted

Aim-listed Trinity Exploration & Production PLC (LON:TRIN) announced in a news release earlier this week, that it intends to lift its shares from suspension today at 7:30. The company which asked for its shares to be suspended from trading on the 16th of July last year, because of talks with its financial lender Citibank failing to suit both parties.

The company, which has up until earlier this month had the for-sale sign up, decided to put an end to the offer period and subsequently managed a placing of £11.9m to existing investors and management at a premium to the closing market price pre suspension of c160% or 4.98p.

The company with assets in Trinidad has, like many oil companies over recent years, struggled to keep its head above the water. With the decline in the oil price and market turbulence, investors and oil-heads alike are starting to feel relieved with the recovery in price in H2 2016.

This, it would seem has potentially offered investors of the Aim market an opportunity to buy into what currently looks like a healthy turnaround story.

With TRIN shares trading at £1.40 in 2014, the company has, up to its suspension in July 2016, seen 99% of its share price decimated. With 187m placing shares hitting the market today, the company will have a market capitalisation on re-list of little over £14m.

The proceeds of the placing will be used to settle certain loans to creditors, one of restructuring costs and the re-initiation of the drilling program with an initial target of 4 more onshore wells in their Trinidad concession.

After placing and restructuring the group’s like for like debt position will reduce very significantly from US$35.5m to US$9.2m.

Among other things, TRIN “or the company” has very successfully managed to reduce is OPEX over the last 12 months from US$12m in 2015 to $8.7m in 2016, a reduction of 27% and its administrative costs from US$5.7m to US$1.8m. This very aggressive streamlining of costs and expenses, as well as helping save the company from administration, has helped restore investors’ faith in those in charge and the prospects going forward.

With the company getting its BOE costs down to $15pb onshore and $30pb offshore, averaging an output of 2659boepd for H1 2016, comfortably maintaining the price of POO at $50pb and above and many analysis supporting a $60pb forecast, TRIN, it would seem, may be offering investors a very healthy investment opportunity and potential turnaround story.

AIM:TRIN Trinity Exploration & Production Future Revenue and Net Income by Simply Wall St
AIM:TRIN Trinity Exploration & Production Future Revenue and Net Income by Simply Wall St

I intend to invest in TRIN, as I see the situation, this could prove a very successful investment, with a team that have thus far done a very good job through very tough times.

Looking for more such companies: Your quest ends here.