Trinity Exploration & Production : Our Annual Report & Accounts for Year Ended 31 December 2022

Annual Report & Accounts

for the year ended 31 December 2022

Company Number: 07535869

Stock Code: TRIN

Contents

Strategic Report	Financial Accounts
1	Highlights of 2022	65	Consolidated Statement of Comprehensive Income
3	Chairman & CEO Statement	66	Consolidated Statement of Financial Position
5	Our Business Strategy & Model	67	Company Statement of Financial Position
6	Operations Review	68	Consolidated Statement of Changes in Equity
10	Stakeholder Engagement	69	Company Statement of Changes in Equity
12	Environmental and Social Governance	70	Consolidated Statement of Cash Flows
16	Financial Review	71	Company Statement of Cash Flows
24	Risk Management and Internal Controls	72	Notes to the Consolidated Financial Statements

Governance

Glossary of Terms

114 Glossary of Terms

30 Directors' Statement s172

32 Corporate Governance Statement

33 QCA Principles

Company Information

38 Board of Directors

40 Executive Management Team	117 Company Information

1. Board Activities
2. Audit Committee Report
3. Technical Committee Report
4. Remuneration Committee Report

46 Directors' Remuneration Report

54 Directors' Report

1. Statement of Directors' Responsibilities
2. Independent Auditors' Report

For more information on

Trinity Exploration & Production visit

trinityexploration.com

Annual Report & Financial Statements 2022	1
Highlights of 2022			• Strategic Report
		Governance
			Financial Accounts
			Glossary
			Company Information
	Operating Profit before
	SPT, Impairments and
Sales (bopd)	Exceptional Items (USD)
2,975	$19.0m
(2021: 3,006 bopd)	(2021: $9.3m USD)1
Adjusted EBITDA (before hedge costs)	Profit before income
(APM Result) (USD)	taxation (USD)
$35.1m	$2.5m
(2021: $21.1m USD)	(2021: $3.0m USD)

Adjusted EBITDA (after hedge costs) (APM Result) (USD)

$24.7m

(2021: $19.8m USD)

Cash generated from continuing operations (USD)

$12.0m

(2021: $12.6m USD)

Total year-end cash (USD)

$12.1m

(2021: $18.3m USD)

Adjusted EBIDA after Current Taxes (APM Result) (USD)

$12.3m

(2021: $14.8m USD)

Cash flow used in investing activities (USD)

$15.6m

(2021: $13.8m USD)

Note:

Refer to the Financial Review Section 16 to 23 for additional information.

1. Covid 19 expenses in prior year reclassified as operating expenses.

2	Trinity Exploration & Production plc

Highlights of 2022 (continued)

2P Reserves + 2C Resources*

Total Year End

	2022	2021
	mmstb	mmstb
2P	17.96	19.73
2C	48.88	47.22
Total	66.84	66.95
West Coast
	2022	2021
	mmstb	mmstb
2P	2.17	2.70
2C	3.45	3.01
Total	5.62	5.71
Onshore
	2022	2021
	mmstb	mmstb
2P	6.53	7.26
2C	8.62	3.82
Total	15.15	11.08
East Coast
	2022	2021
	mmstb	mmstb
2P	9.26	9.77
2C	36.81	40.39
Total	46.07	50.16

Note:

• 2022 Management estimates for reserves and resources

Annual Report & Financial Statements 2022	3
Chairman & CEO Statement		• Strategic Report
	Governance
		Financial Accounts
		Glossary
		Company Information

Strategic Performance

During 2022 Trinity put in place the foundations for an ambitious growth programme, developing a series of catalysts to drive shareholder value that we are now starting to execute in 2023. This important process has involved taking tough decisions based on identifying the most efficient allocation of capital across the portfolio.

We chose not to pursue several initiatives which we had previously been exploring, such as the Jubilee field off the West Coast and NWD deeper play, and instead decided to focus on three key initiatives which we believe have the potential to deliver meaningful value for shareholders.

First, the Company has matured its understanding of the deeper prospectivity across its onshore portfolio using the 3D seismic which we had acquired to map nine 'Hummingbird' prospects across its Palo Seco assets. In May 2023 we commenced the first well, Jacobin, the start of an ambitious, risk-appropriate exploration programme that we hope will fast-track the monetisation of these substantial resources. In a success case, this will generate material growth for our shareholders, further de-risk this potentially extensive play across our existing acreage and allow us to quickly evaluate the significant potential in the Buenos Ayres block offered in the 2022 Onshore and Nearshore Competitive Bid Round.

Second, during 2022, the Company participated in the 2022 Onshore and Nearshore Competitive Bid Round, bidding for the Buenos Ayres block, which is located immediately to the west of Trinity's existing Palo Seco interests, comprising Blocks WD5-6,WD-2 and PS-4 and, at its closest, is only around 500 metres from the Company's existing sub-licences. If awarded, Trinity intends to take advantage of its unique understanding of the stratigraphy in this area onshore Trinidad, where there are strong analogues to the Company's existing acreage, to quickly progress from drilling to production. As an Exploration and Production licence, Buenos Ayres would benefit from better commercial and fiscal terms than the Lease Operatorship Agreements; principally, no overriding royalty payable, instead state-owned Heritage participating as a joint venture partner with a 15% working interest carried through the exploration phase.

Third, having paused the Galeota farm-out process, we initiated an in-depth review of the opportunities across the offshore Galeota block, including the existing Trintes producing field, to formulate a revised development plan that offers greater capital efficiency and shorter development and payback timelines, with the aim of avoiding significant dilution for existing shareholders. This work continues in 2023 and we aim to finalise the development option in order to progress by Q4 this year.

In addition to progressing each of these attractive opportunities, Trinity has continued to lobby the Trinidadian Government to take the steps necessary to stimulate activity in the energy sector. As well as the successfully completed 2022 Onshore and Nearshore Competitive Bid Round, we welcomed the fiscal changes that were introduced, particularly changes to Supplemental Petroleum Tax ("SPT"), announced in September 2022 which took effect from 1 January 2023. This positive approach from the Government will provide

additional growth opportunities for Trinity and we continue to engage with Government in a constructive way, as we believe further reform is necessary to achieve the Government's aim to stimulate greater activity levels across our sector.

Operating Performance

Trinity delivered a robust operating performance in 2022 which continues to highlight the strength and resilience of our core business. We delivered production for the year within guidance, and we remain on track to progress our growth agenda in 2023.

Group net sales for 2022 were 2,975 bopd (2021: 3,006 bopd). Trinity managed to substantially mitigate natural production decline through a programme including; 3 new wells, 17 RCPs, 120 Workovers, swabbing across its asset base, including the recently acquired PS-4, and improved production monitoring using automation and revised completion strategies.

The Company's investment in technology to automate and remotely optimise over 50% of its production is proving to be effective, helping to ensure steady production whilst minimising non-productive downtime. The Company aims to extend this automation to an additional 37 onshore wells during 2023, which would result in the proportion of Group production covered by automation rising from 50% to approximately 80%.

Three new development wells were drilled and completed during H2 2022. Initial production levels for the three wells were on prognosis but subsequent performance was below plan and increased supply chain costs have impaired the economic potential of conventional drilling. The data acquired through this campaign is helpful, however, and is currently being used to revise our plans for future drilling campaigns.

Financial Performance

Our 2022 financial results demonstrate the Company's resilience despite encountering significant external headwinds. Adjusted EBITDA for the year was USD 24.7 million (2021: USD 19.8 million) and cash resources were USD 12.1 million (2021: USD 18.3 million) at year-end.

Global supply chain pressures and cost inflation saw our operating breakeven nudge above USD 30.0/bbl (to USD 32.1/bbl) (2021: USD 29.2/bbl) for the first time in seven years. This still represents a relatively low operating cost, which provides a buffer in times of low oil prices. Nevertheless, we are continuing to experience inflationary pressures within the supply chain and are working with our contractors and partners proactively to manage our cost base and execute our development programme in

a cost-effective manner.