THE Trinity Exploration and Production business run by North Sea veteran Bruce Dingwall has said it is well placed to cope with increasingly tough market conditions.
In a trading update the company said it is braced for a long period of low oil prices despite the recent efforts of members of the Opec Plus exporting countries to support the market.
While Trinity is focused on Trinidad the update will be noted in the North Sea amid fears a deep downturn is in prospect in the area following the fall in the crude price in recent weeks.
North Sea at 'breaking point' as oil price hits fresh record low
Trinity, which runs its business development function from Edinburgh, said the unprecedented oil price volatility triggered by the impact of the coronavirus on demand will likely have a profound effect on the sector.
The company underlined the potential for the crude price slump to trigger deep cuts in spending by oil and gas firms.
It said it would focus on preserving cash and minimising discretionary capital expenditure. This could cover investment in new assets or upgrades of existing facilities.
“As such, only essential infrastructure, asset integrity and production related spend is budgeted for Q2 2020,” said the company.
North Sea faces premature end as firms slash cosst amid mayhem in oil market
Firms that operate North Sea oil and gas fields are expected to follow a similar approach.
However, Mr Dingwall said the fact that Trinity produced oil relatively cheaply and had built up significant cash reserves should enable the company to weather a prolonged period with its benchmark crude, West Texas Intermediate, trading at less than $20/bbl.
After producing an average of around 3,200 barrels of oil per day in the first quarter, Trinity increased cash balances by $0.4m in the period, to $14.2m at March 31.The company received an average $46.3/bbl for its output during the quarter.
Mr Dingwall shifted his attention to Trinidad after helping to grow North Sea-focused Venture Production into a significant player in the area.
Venture bought assets that other firms had lost interest in. It was acquired by Centrica for £1.3 in 2009.
Centrica is currently trying to sell its North Sea-focused exploration and production business.
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