Houlihan Lokey Advises Trinity Exploration & Production on Its Recommended Takeover Offer by Lease Operators

Houlihan Lokey is pleased to announce the completion, on 5 November 2024, of the recommended all-cash takeover of Trinity Exploration & Production PLC (“Trinity”), a crude oil exploration and production company with onshore and offshore assets located solely in the Republic of Trinidad and Tobago, by Lease Operators Ltd. Houlihan Lokey acted as financial advisor and rule 3 advisor to Trinity.

Trinity was publicly quoted on the AIM Market of the London Stock Exchange. Houlihan Lokey had been engaged to assist in exploring strategic and financing alternatives, including potential takeover offers. The transaction, which was governed by the U.K.’s City Code on Takeovers and Mergers (the “Code”), emerged from this review in competition to and on better terms than an earlier takeover offer received by Trinity. The transaction is an excellent case study for Houlihan Lokey’s ability to combine sector and public equity advisory expertise.

Trinity is an independent oil exploration and production company with producing assets onshore and offshore off the east and west coasts of Trinidad. Trinity operates seven onshore oil leases and three offshore leases from which it produced 2,790 BOPD (net) in 2023. Trinity has 2P Oil Reserves of 12.9 MMbbls and 2C Contingent Resources of 38.7 MMbbls.

For the six months ended 30 June 2024, Trinity reported unaudited earnings before interest, income taxes, depreciation, and amortization (“EBITDA”) of $9.3 million. As of 30 June 2024, Trinity reported an unaudited cash balance of $8.0 million and drawn borrowings of $3.0 million.

Lease Operators is one of the leading companies in the oil and gas sector in Trinidad and Tobago, forming part of the Well Services Group, which has drilled more than 200 oil wells since the 1990s.

The transaction will provide Lease Operators with an opportunity to create a business of increased scale in Trinidad with an enhanced ability to deliver growth in reserves, production, and cash flow for the benefit of shareholders and local stakeholders.

Under the terms of the transaction, Trinity shareholders will receive 68.05 pence in cash for each Trinity Share held. This represents an 89.0% premium to the closing price of Trinity Shares of 36 pence on 30 April 2024, the day prior to Trinity entering an offer period in accordance with the Code.

The transaction, in competition with a previously announced all-share offer for Trinity, was announced at an unusually late stage in the process, requiring Trinity to take actions not typically encountered in public takeovers in the U.K. Ultimately, Houlihan Lokey was able to guide Trinity successfully through these requirements, allowing the transaction to proceed and a superior value outcome to be delivered to Trinity shareholders.

RELATED: Oil & Gas, Mergers & Acquisitions