Trinity Exploration & Production Limited (TRIN) Earnings Call Transcript & Summary

Good afternoon, ladies and gentlemen, and welcome to the Trinity Exploration & Production Q4 Investor Presentation. [Operator Instructions] Before we begin, we would like to submit the following poll. And I'm sure the company will be most grateful for your participation. And I'd now like to hand over to Jeremy Bridglalsingh, CEO; and Nick Clayton, Chairman. Good afternoon.

Good afternoon, everybody, and welcome to the Trinity fourth quarter update. We will attempt in this presentation to provide you with an update following the release of the Q4 operational update last week. Our intention is to give you some insight into the immediate focus of the management team and the Board. And as we walk through the presentation over the next half an hour or so, I hope that we can address some of the questions and issues around 3 core topics that have been the result of most of the questions that have been pre-submitted being: Galeota; the timing of the resumption of drilling; and dividends/returns to shareholders. So if we can go to the next slide, please, Jeremy. I'll hand over to Jeremy just to walk through the first couple of slides. And then I'll return to discuss some of the more strategic issues. So Jeremy?

Thanks, Nick. Good afternoon, everyone. Thanks for taking some time to continue listening to the Trinity story. And for those of you who are new to Trinity hopefully, this will be informative and interesting. We're kicking off with the ESG aspects of the business. And I think the key message that we want to get across is that we've seen the narrative. We understand what shareholders are looking for. And also very importantly, we've learned through recent discussions with various finance in-houses that ESG credentials can actually help you with your cost of capital and reducing your cost of capital if you have good ESG credentials. So tying together, ESG and F is very clear. And some of the examples of what we've been doing in the recent times are: given that we are learning about ESG more, we are working together with a company called Sustainable to develop our ESG planning. And they are in excellent position to look of what we have, identifying gaps, look at trying to create metrics that are measurable and comparable to other global standards as we learn more about that space. So it's a process that we are working together with Sustainable alone. We intend to release today to public during the close out of, I will say, quarter 2, end of half 1 of this year to describe where we are more publicly and talk about the journey forwards as we learn more about ESG and try to implement a plan that is above our class standard in the coming year to 18 months or so. In addition to that, the solar irradiance study that, we mentioned in previous presentations, is about to kick off in a couple of days, actually. And this solar irradiance study will be the first of its kind in the Southern Caribbean, in that they will be collecting data or a full complete set of data that has never been collected before. We'll be collecting data at the horizontal access, diffuse solar irradiance data, and also tracking the movement of the sun during the particular date and days. So the amount of data, the time collection of data, this is going to be a research class project that we are taking on and will provide bankable data for our technical feasibility in terms of understanding the solar feasibility in the southeast Isthmus of Trinidad and Tobago in the Galeota area. Very soon, on the back of that, we intend to commence our wind resource assessment, and that will contemplate putting up 120-meter mass in the southeast Isthmus of Galeota, and we are keen to move that forward. The next step for us is to acquire land permissions. And we'll be directing that and conducting the first bankable wind resource assessment in Trinidad and Tobago as well. So we're breaking a bit of new ground with this sort of resource and very soon with wind resource assessments. And in both instances, we're working very closely with the University of The West Indies, with physics department in particular, and overall growing and developing relationship with [ UV ] which I'll come on to a little bit later on. We are also in the final stages of installing our solar PV power system for our WD-5/6 field office. And this will essentially help us to take that field office offline. It's a pilot study to understand how well it works, how efficient it is. And if that is successful, we'll be looking at carrying this out across more of our installations as we look to reduce the carbon intensity of our lifting order. On the social aspects, we are in the process of wrapping up a discussion with the University of the West Indies, where Trinity will be providing funding to the university to help students who are studying particularly in geosciences area. And this fund, which will help a number of students, will be done in the name of our late Chairman, Bruce Dingwall. And in fact, the Dingwall family who is in country right now will be visiting with the UV tomorrow alongside the Trinity. And we put together a story and a few pictures to share with you once that's all wrapped up signed and describe to you what's happened there in terms of the Bruce Dingwall Fund and supporting students in the geosciences space. Our medical plan now allows private care for employees, who have been severely impacted by COVID, and this is a benefit that was not there previously. So that's something that's very helpful given the overall pandemic and the space that we're in. And in recent times, with Trinidad pointing to -- Tobago, sorry, pointing towards getting students back into school, we thought it was helpful to work with the voluntary associations within the areas in which we operate and provide those students with some school-related supplies. So books, copy books, pencils, pens, rulers, et cetera. We recently had a drive and helped around 400 students with that. From a governance aspect, our technical committee is now established, up and running. We have 2 world-class advisers who will be with us. And a lot of what they will be doing is looking at the organic opportunities that we have, but also helping us with the inorganic opportunities, from making sure that our methodology is correct, but also looking at our risking, and ensuring that we are taking a very holistic approach to making choices going forward. And that will be a key theme that we'll be describing throughout this presentation. The organization structure has been reworked recently. We made sure we've realigned, we've given people who are performing new responsibilities. And importantly, we are -- we have implemented an innovation arm. The innovation arm of the business is where the renewable is processed. Also within there, the automation team will reside, and we will also be putting together a data engineering and data science team as we look to pull together an operational philosophy that reduces carbon intensity, reduces our cost structure, increases predictability of production, and create a scalable and [ repeatable ] solution for operations. Our standing point in the QCA Corporate Governance Code is kept in because that is important to know that the Board and management team and the company is run under the auspices of the QCA. And finally, wrapping all these things up, you can see that financially, I've touched on reducing cost of capital, optimizing cost structure. But I think what all of this combines to do is to try and illustrate that Trinity is living and breathing the right types of values that allow us to be a partner of choice. I will touch on some key elements for the 2021 update coming out of the Q4 and the previous quarterly updates that we've had. So I would say from a production standpoint, we held production pretty resiliently at 3,069. That is, in overall, a 7% decline. When you look at the production in the fields, particularly the amount of new wells that we have, this level of decline is actually lower than what we would normally anticipate. So the team did a fantastic job in terms of doing recompletions, workovers and completing automation of the 51 wells that we intended to drilling. This was in the face of headwinds with supply chain, as everybody is well aware of what's happening in the supply chain, but also very much COVID, where we've had a number waves come through Trinidad. And the -- and we have been impacted on the ground in terms of people who have either experienced or come down with COVID or people who are being primary contracts or even secondary contacts. So as we've taken a lot of time and effort, and the business continuity plans that we put into place have been very successful based on the results that we've seen. I would have to say that the team has been great in terms of taking up vaccinations. Our team overall is 85% vaccinated. In particular, the Tier 1 of the employees who are at the wellhead, they are 91% of them are vaccinated. And our contractors are in around 60% vaccinated as well. So that prevents -- a good presents a good barrier. But we still are, particularly in the state of Omicron, we are seeing people coming on with the virus, but it's been not very severe, but been light symptoms thus far, fingers crossed, has been okay, and the vaccination does help, but the team are being -- I think the key point to take away is that the team has worked assiduously at production. Our cash balance end of the year $18.3 million down from $20.2 million in the year before. And I would say, based on the initial data that we have, and we'll, of course, give more information once the preliminary results are ready and [ we sent ] out. The main movements in quarter 4 would have been the completion of the PS-4 and P&L remainder of the acquisition payment for that. And then also, during the course of the year or that balance, we closed out the receivable balance of $5 million. So we saw an increase in the amount receivable by $2.1 million across 2021. And this is an area that our Finance Director, Denva, and his team are working very closely, reported in the revenue to ensure that we manage all VAT refunds. So that's something that we are very much aware of. It has gone up, but we are also working very closely to ensure that we manage the cash flow for the company in that regard. Operational breakeven, the operational breakeven has remained below $50, which is exactly what we plan to do. So that was good performance from -- in terms of the cost structure. And I think I would have touched on the average -- sorry, I mentioned the cash, the group activities. Other than that, I think the only thing I'd like to highlight is that we realized price is up. And once we provide the preliminary results, you will see what the profitability has been like over the year and you'll see more detail on the cash balances. Nick, I'll hand over to you.

Thanks very much. Just trying to put some of the strategic influences on the company into some sort of context. And I make no apology really for putting this slide up, which is an adaptation of something which we've shown before. But the key point here is that Trinidad is a mature oil and gas producing region. But there are very significant reserves and resources still to be discovered in Trinidad. It's very much on the government's agenda. They recognize that they've got a short window to optimize the revenues from this resource given transition. And there's also, as you can see from the chart on the bottom left, there's a recognition that the fiscal regime in Trinidad is uncompetitive in a global context. And I think it's fair to say that we are hopeful that we're going to see some visible progress on fiscal reform during the course of the first half and hopefully during the first half of 2022. We've made the point on several occasions that there is a relatively undeveloped independent sector in Trinidad and Tobago. And I would say that the government is very well aware of this, and as a result, has tried to -- or is trying to stimulate more activity via the 3 new bid rounds that we've flagged, which clearly is giving us an opportunity as a company to grow our opportunity set. One thing I would say that since I've come on Board as Chairman is that we have to recognize here that we are a relatively small company. And I think it's fair to say that there's recognition by the Board that we probably don't have enough resources in the subsurface to enable us to adequately look at all of the opportunities that we have in a timely fashion. And as a consequence, the Board is working with the management team on rectifying that as soon as possible. Next slide, please, Jeremy. So what does this all mean for Trinity? We've had lots of questions about dividends and dividend policy. I think it's fair to say that the Board and I want it to be clear to everybody here today that the Board is very much focused on delivering not only growth, but also income exposure for its shareholders. But in order to do so, the Board's assessment is that we need a step change in our free cash flow to deliver a dividend on a consistent basis. And for this reason, we're all focusing very, very hard and very clearly on 2 key catalysts that have the potential to move the needle and to get us into a position whereby we can deliver an income stream to shareholders. So there's a huge focus on Galeota. And I wouldn't underestimate the time sync that this involves in terms of management presentations, which take up the entire time of the team for half days and then following up questions that come out of the management presentation. So Galeota is a huge time sync for our subsurface team at the moment. But clearly, it has a very important -- it has the potential to transform the cash flow of the company, providing we can maintain and retain adequate exposure to the asset. So just to be clear and just to reiterate again, our intent is to retain exposure to the upside on Galeota, fund our corner with minimum exposure to debt, and clearly, without having dilution to shareholders. That's the nirvana equation that we're trying to work with. We have a process ongoing. And we have to work through that process to see what offers ultimately come on to the table subsequently down the line. The second catalyst is NWD. And I don't think we've probably made this sufficiently clear, but NWD is a huge tract of acreage, almost 10x the size of the 3D that we purchased from Heritage last year. So there's several points here. One, it's a huge area. Secondly, we need to sort of quickly home in on the areas of greatest potential that, again, would help us to move the needle in terms of the value of the company. We've made it very clear that we're working alongside Capricorn in terms of trying to assess quickly the potential of this block. And clearly, the benefits of working with a partner are that we can mitigate the risk whilst hopefully maintaining upside -- exposure to the upside. So it's quite clear that we -- both of those processes, which are material and could move the needle, will have funding requirements. And yes, we do recognize that we have drilling commitments that we need to undertake this year. But I think the other thing to say here is that we could start drilling conventional wells at the drop of a hat. But we've said right from the outset that our focus going forward is going to be high-angle wells and horizontal wells. And by definition, that's taking slightly longer to formulate the opportunity hopper for wells of that term, of that nature. So again, just at the bottom point, I make no apologies for us taking a little bit more time to assess the opportunity. But I want everybody to be clear that the Board and the management are certainly not sitting on our hands or dithering on decision-making. We're trying to make the right -- the right choices for shareholders. And rest assured, the Board has got the management's feet to the fire in terms of trying to speed up the work and to deliver the opportunities as quickly as possible. But the other final point, I'd make is that, the work program that has been put together for 2022, although drilling will not commence until the second half, it will deliver production growth over 2021 levels. And we'll give more guidance on that in the coming weeks. So that's all I really want to say at this stage. Jeremy, can you kick into some of the detail on some of the strategic initiatives that we're working on?

Thanks, Nick. So I will be picking up on some of the points that Nick mentioned and delving a little bit deep. This slide is to describe a little bit more about the areas that Nick mentioned, and in particular, the Galeota farm-down. We've got a slide on that later on, but we've commenced that process in Q4. So I will describe that in more detail on the next slide. The NWD onshore bid with Capricorn, that's actually due to be submitted in late March. So we're working -- right now, the technical teams are working very hard on that and coming up with a number of different opportunities, which I'll describe. And the reform to the fiscal regime, which is expected in the near future. And this comes on the back of discussions that Nick and I have had directly with the Minister of Energy and in discussion with other operators where they've also heard the Minister of Energy say that the fiscal regime for petroleum will be ameliorated. And specifically for the crude oil producers, this going to be looking at the SPT and finding a way to meet the SPT broadly such that it unlocks value for existing assets and other assets or other stranded assets that need that relief. I've mentioned it, the solar irradiance study, which is commencing in a few day's time. Other than that, we are -- the Ministry of Energy has in terms of the onshore the drawn up is like to commence. They've asked companies to identify blocks of interest out of a -- set of 15 blocks that they've looked us out. And Trinity has looked at -- with interest, and responded on 6 of those on onshore blocks, which span the southwest peninsula of Trinidad across to the eastern side of Trinidad. So we are very much looking forward to that process kicking off. In terms of Heritage, we are running another process in addition to the NWD, which is called the incremental or enhanced oil recovery for other sublicenses on onshore acreage. And we've also submitted an expression of interest to [indiscernible] last December. The capital reorganization, you're well aware, and that has been completed. So that has paved a way both legally and accounting wise for returns to happen through the balance sheet. So once we have the cash flow stream that Nick mentioned, we have the ability to -- then to pay dividends on regular basis once that cash flow stream is in place. At the 3D seismic interpretation, nick touched on it, by I will delve deep on it when we get to the onshore slide in a couple of slides down. So we're confident with Galeota. We kicked off a process utilizing Stellar Energy Advisors. And I have to say, Stellar Energy team have been very professional, very organized and very good to work with. Circling the feedback that we've gotten from parties or proponents into this process is that the data room. And the process that we offer together is very clear. It's easy to follow. And the data room look very well. We commenced the process in around mid-December, just before Christmas. And we knew that, that would be obtained here, albeit, it will be a little bit slow in terms of getting into the data room. But we utilized that time to get the confidential agreements onto people, so we negotiated those, and got that signed up so that people can get -- take a look at the Teaser and then once we signed the CA, it will be presented with an information memorandum, and that information memorandum tells the entire story of the Galeota. We have been speaking about before with respect to existing production, the Project Echo, the Foxtrot and Golf also the associated low carbon intensity of this overall development and what is happening on -- sorry, on the onshore facilities as well as the corporate tax wrap-up that is still available as well. So that described that. The next step to be process was core companies to [ sign how ] the management presentations, which is the first interaction between us and the potential proponents. And we've had quite a number of those so far. It's been quite an interactive session, although a good question being asked on the technical and facilities side. And I think so far, the team has been able to come up with good, strong, robust responses reflective of the amount of hard work that we put into this asset over the last 2 to 3 years or so. So that process is going along very well. The team had a flurry of management presentations. As Nick mentioned, that sort of -- when you've got a team modern management calling what we go about 8 or 9 from our side across technical or commercial. You've got facilities as well engineering. So it takes a lot of time and effort, but it's something that we believe is very much with us in terms of the value potential for Galeota. That it can be unlocked for the benefits of our shareholders and wider stakeholder groups in Trinidad and Tobago. So it's a lot of time. It's a lot of effort, but it's something that the team is enjoying. It's something that people are giving good positive feedback on. And the intent is for any -- the completion of the data room review, completion of management presentation should be wrapping up in the next month or so. And then on the back of that, companies will go away and do their evaluation. And hopefully, we'll be getting some bids during the course of Q2 of 2022 that we will then assess, and once we take it forward from there based on the quality of the bids that we've gotten through. So we are looking forward to that. And we still think about drop in oil prices, along the same fiscal change being imminent, and certainly that's going to be a preface for us before deciding any value change or any value -- any sort of the original financial clues on any bid. 2 areas that we opened in [indiscernible] and they deliver before this process comes, and hopefully, into the end of Q2, come around to Q3, and we'll be updating you with the appropriate milestones as that comes along. On the onshore, on what is happening here, I think it's very short following on from Nick's point about what we were assessing before. This is what we're assessing now. And the graphic on the left-hand side shows where we have all blocks, that yellow blocks, with the red rectangular on them. And the red rectangle represents the 2 windows of the 3D seismic data that we put just in early 2020. And the blue of a plain of the much larger area represents the entire 3D survey that was carried out in 2014. So we essentially moved from looking at the 2 windows that we purchased in 2020, which was taking a lot of time and effort, and we had a dedicated team go on that. So now looking at what is -- that was, combined around 37 square kilometers. So now looking at what is about 350 square kilometers. So the size of this survey and the amount of data had significantly increased. And we are -- what we are looking at that, is for 2 purposes: one, looking over our existing acreage; and increasing the opportunity hopper there by way of wells to be drilled, by way of other techniques, such as enhanced oil recovery of our assets. But we're also looking at the NWD area in conjunction with Capricorn Energy there to identify areas of interest. And what the team is seeing is we are seeing structures that have not been yet drilled in the eocene, miocene and the cretaceous horizons within this particular area. So we've seen a number of opportunities. And in the lens to what Nick was describing about saying that, in assessing and looking at the opportunities that we have, we are coming up with more than just the traditional wells that we've drilled. And we are coming up with a range of opportunities that have economic returns that are more of us than our traditional wells. So it's very -- we think from a capital allocation standpoint, it's very important that we take the time to assess these projects, look at the risks associated with them, and then deploy capital in the best interest of providing best return from an NPV, from an IRR perspective, but also a payback perspective to ensure our working capital is managed correctly. So in terms of our onshore drilling considerations, I think one of the key elements that we were waiting to understand is, what does SBT look like? And what is the amelioration of SBT mean in terms of the economics for onshore wells? That's a key point for us because it impacts the economics materially. As I mentioned, we are looking at derisking and ranking of opportunities. So certainly, the seismic has not been -- the seismic has shown us more opportunities than actually showing us that there are less opportunities. So we are taking the time, looking at this seismic, using the seismic to derisk what we already have. In essence, we're taking the data points that we have at wells and now applying the 3D seismic with that and integrating that into our map. And that is an advanced stage of over the existing horizons that we produce from. And those will be the forest reserve and cruise areas. But now we are looking at even deeper targets as well. So what we are coming up with is opportunities that contemplates the traditional low-angle wells, high-angle wells, horizontal wells and deeper targets within our acreage areas, and for the NWD [ also with that. ] We're looking at the supply chain. The cost of steel has more than doubled. So of course, we want to make sure that we -- when we take on those long lead items, they are at the best price as possible notwithstanding, because the change in the steel prices has an impact, where they have gone in terms of doubling the steel prices, increases well cost anywhere between sort of 15% to 25% depending on the depth of the well. So that is material, and that's something that we keep an eye on. We do have some of these [indiscernible] on the ground already purchased back in 2019. So that will certainly help and buffer us with some time. But we'll be looking at the supply chain. And when the time is right, hopefully capitalizing on steel prices, start entire steel price will even go down. From a commercial perspective, we're always working together with Heritage to find the best result for both parties. So we look at means of when we start to look at deeper targets or the riskier targets to find right relationship commercially there that [ will help ] both us. And certainly, we are well on our way. We have the opportunity sets to resume drilling. We can commence with [ drill under wells. ] But I think the key takeaway here is that we want to be able to resume drilling on a continued basis as best as we can with the right set of circumstances around it, considering fiscal, commercial, supply chain, but also having the right targets that have been derisked appropriately. In terms of the NWD process and the seismic survey described what we're doing in terms of looking at a much larger dataset. But that's large dataset has now allowed us to put together a more regional understanding or regional cell maps for the deeper horizons, the miocene, eocene and cretaceous, for example. And that has helped us identify multiple areas of interest, with varying scale and science associated with these opportunities. So those are -- in terms of the sizes and scale, have the opportunity to take away this in production onshore and increase it materially. So I think we're looking at those areas. There's simply another element of why we are very much looking at our capital allocation decisions. There's a lot of technical opportunity sets. And the technical committee will be spending a lot of time with our team to ensure that we're taking the right approaches there. So that when we make decisions as a team and we started deploying capital, it's for the best return for shareholders. We are working together with Capricorn right now and progressing the technical sessions. As I mentioned before, we have to submit a bid in late March. So very soon, we'll put together that bid, and we'll be launching that bid so at the end of March. And the [ free month ] that we put together will also help us not with just screen, and those are unique opportunities. But it presents us with a lens to look at the areas of interest that we want to operate with onshore, from the onshore drilling and even from an acquisition perspective. This slide tries to wrap up some of the opportunities that we described on Galeota. The farm-down process there, which is an organic one, as I said within, we are hoping during half 1 2022 to get the bids in. And during half 2, if we find the bids are appropriate, we're working together with the right proponents or proponents to reach the financial closing half, half 2, and then progress the projects and reach the FID during 2023. That's broadly what we're trying to attempt there. In terms of the NWD, we intend to launch that in -- at the end of Q1, as I mentioned. And then hopefully, we will hear from Heritage a few months after that as to whether we've been successful or not. And if we are successful, it's moving forward with the associated new plans that we would have bid on for the NWD. Again, the NWD and Galeota are approved for near-term and both presenting opportunity to transform this business in terms of production, but more importantly, cash flow. The onshore drilling, given where we are right now and the focus of the technical teams, we intend to resume in half 2 of this year. And that will be across a range of well sites, some we are hoping to resume with traditional wells, but also include high-angle wells, and if we can, deeper drilling within our acreage areas, to look at structures that have not yet been tested potentially. And if we're successful, and in terms of regional reservoirs, which will have much different set of parameters in terms of production. The Tabaquite Gas asset also, sorry, the Tabaquite farm-down asset has opportunities in both the liquids and gas. And right now, the technical team is -- sorry, the technical team, once we finished the Galeota and the North West District -- in their attention to Tabaquite to progress the technical feasibility there. And if that passes we must, we'll be moving forward with Tabaquite. For reference, in Tabaquite license area is in requirement of regularization. And we are working with Heritage and the Ministry of Energy there to regularize that farm-down agreement there. And once that technical feasibility looks positive, we'll be moving forward there. So I would say stay tuned for some news later on this year in terms of the potential that can come from Tabaquite. On the West Coast opportunities, and again, showing that we'll be focusing on this in half 2 of 2022, the team has identified a number of exploration appraisal development and infill drilling opportunities across the PGB and the Brighton Marine assets. The intent is to mature these technical feasibility perspective during half 2 and into half 1 of 2023, and then do the assessment at that point in time. And if that's positive, it will continue to move forward into half 2 of 2023. So again, that's something to look forward to in terms of news later on into this year and into early next year. The onshore bid round, I mentioned we nominated 6 blocks. And once we hear from the ministry how the process will resume, we will be spending time and effort into embarking putting our stake forward in the onshore bid round. The shallow water bid round has not yet commenced, but it's due to commence on, I will say, probably in Q1 of this year. And once we see what blocks are there, we do have some areas of interest already. Hopefully, if there are blocks some -- over those areas of interest, we will also be participating in that process. And finally, I mentioned the onshore IOR/ EOR being done by Heritage. We submitted our expression of interest, and we are waiting to hear that from Heritage on that. And once we hear something there, of course, we'll be in touch with anything that's meaningful. Nick, I'll hand over you to close off.

So hopefully, that's given you some insights into where we're focusing our attention at the moment. We're well aware that investors are anxious for us to stimulate activity and get using the drill bit. And I think it's fair to say that we will be -- we have a number of firm wells in the budget. And we have contingent wells that will mean that we will be active in the second half. I think it's fairly clear that we have a robust sort of operating position and cash flow. But I think the Board is very clear that we need to have a step change in our cash flow generation in order to be able to exploit the opportunities for growth that hopefully we've alluded to and also return cash to shareholders or -- yes, return cash to shareholders commensurate with pursuing those opportunities. In the near term, we've got to focus on the 2 things that are going to move the needle: Galeota and getting an appropriate successful farm-down is absolutely critical. Because let's be honest, it's highly unlikely that we as a company, the size we are, would pursue this project on a 100% basis. So in order to get the benefit of the value in Galeota, we need to secure a partner and a satisfactory farm-down outcome. NWD, hopefully, we've demonstrated, is a massive opportunity. And we're working assiduously with a global partner who is well skilled in exploration globally. So that should give shareholders some comfort that we're going to do things properly and as quickly as we possibly can. We have a medium-term hopper that's already starting to fill. And Jeremy has talked about a lot of those things already. But make no mistake, clearly, there are a lot of things in the mix at the moment. But we are targeting growth and we are targeting income. And the Board is very, very clearly focused on delivering both to shareholders in as timely a fashion as we possibly can. So I think that's all we wanted to say, unless you want to say anything else, Jeremy?

No. I'm fine, Nick. I think you covered it well. Thank you.

That's great. Nick, Jeremy, thank you very much indeed for updating investors this afternoon. [Operator Instructions] And Nick, Jeremy, as you know, investors submitted considerable number of questions ahead of today's event. And I think you previously at the start of today's meeting highlighted that they fell into 3 categories around timing on offshore-onshore drilling, your view really on about dividend, share buybacks, and the Galeota assets and really the farm-down process. And I know you've touched in some detail on some of those. But if I may, if I could hand back to you maybe if there's anything further to add to those 3 topics, that would take care of a lot of the pre-submitted questions. And then if I could ask you to open up the Q&A tab. And if I could ask you to read out the questions and give a response where it's appropriate to do so, and I'll pick up from you at the end.

Okay. So I think we've -- hopefully, we've addressed some of the questions on drilling. I mean my sort of -- the one sort of takeaway, I would say, on drilling is that the opportunity is great. We are working as quickly as we possibly can on a huge area in terms of developing our drilling hopper, if you like. And we will get back to drilling as soon as we believe that the time is as soon as we've analyzed our opportunities appropriately. So I know there's been some disappointment but please bear with us, we are trying to do things in the very best interest of shareholders. On dividends, yes, they're coming. The Board is very focused on dividends, but we recognize that we need our sustainable cash flow to be at higher levels than it is today. You'll have noticed that our cash balances actually went down in 2021, largely because of an uptick in capital expenditure and the acquisition of PS-4. So in the view of the Board, we need to move that cash flow needle to a higher level to be able to sustain a dividend payout on a regular basis. But as you've seen in 2021, the one thing we did do is the capital restructuring that puts us very much in the position to be able to deliver dividends when we reach that point. And then the third thing, on Galeota, I think just to reiterate what I said in my closing remarks. This is something that we need a partner. And we need to conclude a farm-down on satisfactory commercial terms for us as a company. And that will or should, if we retain a sufficiently large interest in the business to give us access to the upside, be a catalyst for a step change in cash flow and everything that, that brings. So they are the 3 things I wanted to say, Jeremy, do you want to add anything to that?

Yes. I think on the dividends, Nick, what we are trying to do here is to create a predictable set of cash flows that dividends can then be siphoned out from. I think it's important whilst, we see the operating cash flow based on the oil price right now, and that's positive, and we are generating good operating cash flow, we're not at the position where the size of the cash stream is such that we can bifurcate it into organic and acquisitions as well as into paying dividends on a consistent basis. And that's also an objective of being able to pay our dividends.

Yes. Okay. So I'll start reading the questions, Jeremy, and then we'll -- between us, hopefully, we can answer some the bulk of them. So Michael. C, has asked, do you think the authorities will announce reform to SPT regime in H1 2022? I think my response is, we're certainly very hopeful that they will. And based on an ongoing dialogue that we have with the ministry, I think we're being led to think that something will be taking place during 2022 and hopefully the first half of 2022. Jeremy, do you want to add anything to that?

Yes. The risk that the runs that the Minister of Energy has embarked upon, particularly the onshore and the shallow water bid round, will require fiscal regime amelioration, specifically SPT got oil. So ever could, if they're going to be successful, and I think the government is very clear, not just the Minister of Energy, the wider government is clear that without fiscal regime, the investment dollars are not going to come to Trinidad. And we're going to continue to go to our neighbors, such as Colombia, Ghana and Sudan. I think they're very acutely aware of that. So we are very much open. It's a question of when and not if.

Okay. Thank you. And Colin L. Also asked about onshore drilling, seems to be H2. Are there specific reasons for this? Well, I think, hopefully, we've answered them. But in simple terms, one, that the size of the opportunity set via NWD is huge. And it takes a little bit of time to go from 30,000 feet and down into the detail of identifying where the specific opportunities are. And I think we are well on the way to doing that with our partner, Capricorn. But again, Colin, just to reiterate, my observation is that we are resource-light, manpower resource-light in the subsurface team. And then certainly, the Board is pushing management to embellish that team to enable us to get to the targets that we want in a more timely fashion. NWD, David N. Is this likely to be split up into several sublicenses. Jeremy, do you want to just address that?