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Trio Petroleum: The Energy Market’s Hidden Gem

  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

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“Formula for success: rise early, work hard, strike oil.” – J. Paul Getty

Over the past year, there have been few assets to perform quite like energy stocks.

In 2022 alone, the S&P 500 Energy index was up over 60%, easily outperforming the broader market.

Despite the increasing demand for renewable alternatives, the oil and gas market remains vital in the global energy mix, with natural gas producing nearly 40% of all energy used in America.

And with legendary investors like Warren Buffett bullish on oil and gas, investing over $45 billion, it is hard to make a case against one of civilization’s most fundamental assets.

But now that major oil and gas stocks have doubled and tripled, you might be wondering if there is a better way to take advantage of this thriving market.

Well, guess what? There is!

In this article, we’ll explore one of the most fascinating oil and gas stocks of 2023.

With a world-class management team, valuable, potential cash-flow-producing assets, and a variety of market tailwinds, there are few opportunities as worthwhile as this.

What is Trio Petroleum?

Oil rig in a field

Trio Petroleum (USA NYSE: TPET) is an oil and gas exploration and development company focused on strategic, high-growth energy projects in California.

Fresh off its IPO, the Company signed a drilling rig contract at its flagship property, the South Salinas Project, located in Monterey County, and expects to begin its drilling program in the coming weeks.

Known for its prolific world-class oil-producing basins and fields, South Salinas is an 8,600-acre asset in which Trio Petroleum owns an 85.75% Working Interest (WI).

Based on its most recent results, the region found high-quality, mid-gravity oil at depths of about 3,750 to 5,100 feet, indicating that there is ample supply in the area.

Trio Petroleum plans to begin drilling on its property at its HV-1 well, two miles from the initial discovery point, in the coming weeks.

If the drill program is a success, and the well produces oil and gas, then the Company expects to begin production within thirty days of its completion—Trio also has a second drilling program in the works at its HV-2 well.

Coupled with one of the most experienced teams in the industry, Trio has proven to be exceptional at generating prospects, drilling wells, and economically producing discovered oil in the region.

While there is plenty of excitement about the Company’s potential, there is a whole lot more to its story than meets the eye.

Let’s dig deeper.

The South Salinas Project

PROJECT RESERVES & CASH FLOW | Trio Petroleum Investor Presentation
PROJECT RESERVES & CASH FLOW | Trio Petroleum Investor Presentation

If you want to capitalize on the oil and gas industry, look no further than Trio Petroleum’s South Salinas Project.

With an estimated 39.0 million barrels of oil (MMBO) and 40.0 billion cubic feet of gas (BCFG), or 45.7 million barrels of oil equivalent (BOE), South Salinas is bursting with potential.

On top of that, the project possibly contains another 148.8 BCFG, or 117.2 million BOE in undeveloped reserves bringing its total supply to 189 billion BCFG, or 163 million BOE.

For those unfamiliar, barrels of oil equivalent, or BOE, is simply a unit of measurement used to compare the energy content of different types of fuels, based on the energy equivalent of one barrel of crude oil.

What this implies, is that there is a massive opportunity to be had at South Salinas given that its net cash flows are projected to be around $2.0 billion, even after a 10% discount, when it’s all said and done.

And with a market cap of $51.7 million, as of April 27, 2023, it is clear that this asset boasts huge upside potential for Trio Petroleum and its stakeholders.

Interestingly, there may be even more reasons for Trio to take advantage of South Salina than what has been discussed thus far…

The Wonderful Opportunities in California and Beyond

Foreign Sources of Crude Oil Imports to California 2020 (by sea) | Trio Petroleum Investor Presentation
Foreign Sources of Crude Oil Imports to California 2020 (by sea) | Trio Petroleum Investor Presentation

Did you know that California ranks #6 in the United States when it comes to oil and gas production?

What’s more, The Golden State is America’s second-largest consumer of oil and gas, next to only Texas.

Despite this, California imports over 70% of its oil needs, with nearly 60% of its supply coming from outside of the US.

Even more fascinating is the fact that these imports are up almost 15% from just 20 years ago.

Fortunately, due to the location of Trio Petroleum’s assets, the Company is in an excellent position to positively impact the state’s energy market by reducing its foreign dependence, while also ensuring that the supply comes from California and EPA-compliant sources.

And given that California ranks 3rd amongst US states in refining capacity, and possesses some of the best infrastructure in the country, it is likely that operational costs will be even lower than they otherwise would be if Trio was elsewhere.

All-in-all, the Company is poised to benefit from its working relationship with the region which should help it strengthen its competitiveness in the marketplace overall.

Who are Trio Petroleum’s Leaders?

One of the primary reasons that Trio Petroleum is so special is due to its management team.

Led by CEO Frank Ingriselli, Trio is guided by one of the most experienced leaders in the industry, boasting over 42 years of experience in oil exploration and production.

In addition to being the Company’s chief executive, Frank also serves as the President of Indonesia Energy (NYSE: INDO), where he oversees the exploration, development, and production of strategic projects in Indonesia.

But that’s not all.

Frank is also the former founder, Chairman, and CEO of PEDEVCO (NYSE: PED), a company specializing in acquiring and developing energy assets in the US; and the former founder, Chairman, and CEO of Pacific Asia Petroleum, a publicly traded energy company that previously operated in Africa and China.

Before this, he also spent 23 years at Texaco, serving as the President of Texaco International Operations and President of Texaco Technology Ventures, as well as other senior executive positions in the company.

As you can see, there are few leaders in the industry with as much success and experience as Mr. Ingriselli.

However, he’s not alone.

Alongside its CEO, Trio Petroleum possesses a plethora of talent including Executive Chairman and Director Stan Eschner, President Terry Eschner, and Chief Operating Officer Steve Rowlee, as well as many others.

Through these men and the rest of its team, the Company has decades of experience running Trio Petroleum and working for some of the largest oil and gas businesses in the world (ex. Occidental Petroleum, Chevron, Shell, etc.).

With so much expertise in the field, you would have a difficult time finding a crew of this caliber anywhere else.

Overall, this creates a significant competitive advantage for Trio Petroleum in the long run.

The Leaders of Trio Petroleum

The Oil & Gas Industry at a Glance in 2023

Price of Crude Oil | Trading Economics

Aside from Trio Petroleum’s operational advantages, there are many market tailwinds poised to fuel the company’s success.

For one, global oil demand is set to rise by 1.9 million barrels per day (mb/d) in 2023, reaching a record mb/d.

Plus, due to a limited global supply caused by sanctions imposed on Russian oil, and recent actions by OPEC+ to cut supplies by roughly 1.16 million barrels per day, the need for reliable domestic energy is expected to grow increasingly important in the coming months.

This is supported by Fitch Ratings which claims that “Sector performance in 2023 will remain broadly in line with that in 2022 and significantly stronger than in the mid-cycle.”

Expanding on this, they argue, “We expect average oil and gas prices to moderate in 2023, not least because of an economic slowdown, but the hydrocarbon markets will remain tight due to lower oil and in particular natural gas supplies from Russia and OPEC+’s cautious stance.”

So, given the steady growth in demand for crude oil and natural gas, coupled with tighter supplies, one can expect the oil and gas industry overall to remain profitable and resilient in the foreseeable future.


Why Trio Petroleum Should be on Your Watchlist

As you can see, Trio Petroleum (USA NYSE: TPET) is in an excellent position to capitalize on this booming market.

Coupled with an exceptional management team and high-quality assets, in a favorable oil and gas region, the Company is poised to be a key player in the years to come.

And given that its market valuation is relatively low compared to its future cash flows, Trio appears to be trading at a significant discount to its intrinsic value.

This means that there is an excellent opportunity to take advantage before the rest of the market realizes its potential.

So, if you are an investor seeking to increase your exposure in this thriving market, look no further than Trio Petroleum.

With domestic energy becoming increasingly important, you would be hard-pressed to find an investment opportunity as promising anywhere else.

To learn more about Trio Petroleum (USA NYSE: TPET), check out its investor presentation below.

Trio Petroleum

Disclosure/Disclaimer:

We are not brokers, investment, or financial advisers; you should not rely on the information herein as investment advice. If you are seeking personalized investment advice, please contact a qualified and registered broker, investment adviser, or financial adviser. You should not make any investment decisions based on our communications. Our stock profiles are intended to highlight certain companies for YOUR further investigation; they are NOT recommendations. The securities issued by the companies we profile should be considered high risk and, if you do invest, you may lose your entire investment. Edge Investments and its owners are compensated by Trio Petroleum for Investor Relations Services. Edge Investments and its owners reserve the right to buy and sell shares in Trio Petroleum without further notice, which may impact the share price. Before investing, please do your research, including reading the companies’ public filings, press releases, and risk disclosures. The company provided information in this profile, extracted from public filings, company websites, and other publicly available sources. We believe the sources and information are accurate and reliable but we cannot guarantee it. The commentary and opinions in this article are our own, so please do your own research.

Copyright © 2023 Edge Investments, All rights reserved.

  • Declan O’Flaherty

    Declan holds a Bachelor of Commerce from the University of Alberta and has over 4 years of experience investing in financial markets. As a fundamental investor, Declan embraces the investment principles of Warren Buffett and his disciples. This puts a focus on finding businesses with healthy financials, competent and accountable leader, enduring competitive advantages, and those that are selling at discount to what they are worth.

    View all posts

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