Trinity Exploration & Production Potential Positive Tax Reforms
04 August 2020 - 4:00PM
RNS Non-Regulatory
TIDMTRIN
Trinity Exploration & Production
04 August 2020
RNS Reach Announcement
Trinity Exploration & Production plc
("Trinity" or "the Group" or "the Company")
Potential Positive Tax Reforms
General Election Manifestos Pledge Tax Reforms
Trinity Exploration & Production plc (AIM: TRIN), the
independent E&P company focused on Trinidad and Tobago, notes
the tax reforms both main parties have highlighted in their
Manifestos ahead of the General Election in Trinidad & Tobago
which is taking place on 10 August 2020.
The incumbent party of government, the Peoples National Movement
("PNM"), and the opposition party, the United National Congress
("UNC"), have both publicly acknowledged the need to reform the
regressive Supplemental Petroleum Tax ("SPT") regime. SPT is
currently applied to crude oil production when realisations average
over US$50.01/bbl in any given calendar quarter which significantly
impacts economic returns, particularly when oil price realisations
are between US$50.01 and US$60.0/bbl, and therefore acts as a major
constraint on investment.
SPT was initially introduced in 1981, with the aim of delivering
a higher government take on the super-profits being realised on the
then thriving oil production. However, the tax has acted as a
powerful disincentive for investment in the sector, with the
consequence that crude oil production, and therefore employment,
has subsequently declined significantly.
Both the PNM and the UNC have acknowledged the disincentive
effect of SPT and have pledged reform if elected. The election
result is expected on 11 August 2020.
The reforms proposed by both parties are likely to have an
important positive impact on reversing the decline in productivity
levels and increasing employment in Trinidad. The proposed changes,
if enacted, could significantly enhance potential cash returns for
the Company, enhancing our ability to invest to scale the business
and increase shareholder value.
Links to Manifestos
PNM: https://online.flippingbook.com/view/703188/2/
UNC:
http://unctt.org/wp-content/uploads/2019/10/National-Economic-Transformation-Masterplan-2025-2025.pdf
Bruce Dingwall CBE, Executive Chairman of Trinity,
commented:
"The Manifesto pledges to significantly reform the SPT regime
would, if enacted, be extremely positive for Trinity, and for all
the smaller oil producers operating in Trinidad.
"Meaningful reform to the SPT regime would enhance the economic
returns to all stakeholders; the T&T Government, Heritage, the
Supply Chain and the people of T&T. Through such reforms, which
are happening globally, incentivising increased activity and
greater oil production will lead to maximising recovery from our
reservoirs which in turn would lead to enhanced employment
opportunities (and associated taxes paid) and a step-change in
potential cash generation levels and returns for operators.
"There is still some way to go to get the proposed reforms into
law as the country has to have the General Election, choose the
senior Ministers, form a Cabinet and legislate to deliver the
promised policies. Trinity, alongside the various lobbying chambers
in Trinidad and other operators, will continue to press for this
much needed change to be implemented as soon as possible".
Enquiries
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) +44 (0)20 7397 8900
Neil McDonald +44 (0)131 220 6939
Walbrook PR Limited +44 (0)20 7933 8780
Nick Rome trinityexploration@walbrookpr.com
About Trinity ( www.trinityexploration.com )
Trinity is an independent oil and gas exploration and production
company focused solely on Trinidad and Tobago. Trinity operates
producing and development assets both onshore and offshore, in the
shallow water West and East Coasts of Trinidad. Trinity's portfolio
includes current production, significant near-term production
growth opportunities from low risk developments and multiple
exploration prospects with the potential to deliver meaningful
reserves/resources growth. The Company operates all of its nine
licences and, across all of the Group's assets, management's
estimate of 2P reserves as at the end of 2019 was 20.9 mmbbls.
Group 2C contingent resources are estimated to be 20.1 mmbbls. The
Group's overall 2P plus 2C volumes are therefore 41.1 mmbbls.
Trinity is quoted on the AIM market of the London Stock Exchange
under the ticker TRIN.
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END
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