Welcome to the Market Herald Video Q&A Podcast.
I’m Brieanna McCutcheon.
With the growth strategy for assets in Turkey, Trillion energy has a 49% interest in a large producing natural gas field offshore in the black sea. To dive more into what the international gas and oil producer is up to, we’re joined by Arthur Hallerran, CEO and President of Trillion Energy
Hello and welcome, Arthur.
AH: Thank you very much for this opportunity,
TMH: Of course, and just to jump into it right away, I know we all know the war in Ukraine has been devastating to the Ukrainian people and countries around the world have economically felt the impact, particularly in Europe, where energy prices have skyrocketed. How has supply been constrained because of the conflict, and how has energy or how have energy prices been affected for Europe and Turkey?
AH: Because of the invasion of Ukraine by Russia, Europe has decided to not use Russian gas plus there are also sanctions, but Europe predominantly gets most of their gas from Russia as does Turkey. So now there’s still the same appetite, still, the same demand for natural gas but the supply has been severely curtailed, and Russia has also turned off the gas. So, gas prices have skyrocketed in Europe and even in Turkiye. Turkiye imports 90% of their gas and predominantly a large part of that comes from Russia and so we’re not seeing the $45 MCF prices they have in Europe but we’re, we’re up to 31 dollars an MCF. So, the prices have really, really gone up because of the shortage of natural gas.
TMH: So, with that said, what opportunities do you see for Trillion because of the high energy prices?
AH: Well, we have the oil field, but the SASP is the one that we have the money for, that we’re actually going to be putting on the proven reserves and because the wells come on very, very fast, we are 45 days-48 days from initial drilling, the gas then is produced in that month and we get the check in the 20th of the following month. We actually are going to be having a lot of production to capture this high price environment that’s occurring right now in Europe. So that’ll be really, really good cash flow for Trillion.
TMH: Where does trillion fit to reduce dependency on Russian natural gas?
AH: Again, like I mentioned, Turkiye imports 90% of their natural gas, about 50%-60% of that comes from Russia and the gas that we’re producing offshore Turkiye in the black sea is domestic gas. So, it’s actually the property of Turkiye. So, when we produce that, we sell to the Turkish market. So, every MCF, every little bit of gas that we produce will mean that is the amount of gas they do not need to import.
TMH: So, hoping to obviously get that done sooner rather than later, it seems.
AH: Yeah, that’s correct. Yeah. We’re going to be drilling the wells here, probably spudding the wells in the first week of September and we have program A and program A it’s just bringing on the reserves, drilling the wells from the existing platforms and like I said, 45 days we’ll have the seven Wells on by May, June 2023, and then there’s an additional 10 wells after that.
TMH: Ah, okay and then I have a little note here. The last time we spoke with you, you were waiting for the final inspection and acceptance of the drill rig and for the drill rig to be transported to the SASB gas field, did this setup go as planned for the company and when is drilling starting?
AH: Yeah, so things never go as planned and on the 26th we were supposed to get sign off. So that was the day that we’d find out. So, it would be August 26th and that would mean we would start moving the rig and on the 29th, it’d be on the field, but on the 26th or on about the 26th, they found a couple of deficiencies. One is with the ballast tank and the other one is the top drive. So, they are now working to fix that. I’m told it should be finished by the end of the week. So, we’ll be about a week later, but the rig is still coming. People think that the sky is falling but it’s not the rig will still be there may be just a week late.
TMH: Right. Just a little bit of patience is needed.
AH: That’s correct. Yeah.
TMH: Also, when will you first start selling the new gas from the new gas wells? I know there are 17 wells to be developed by 2024 and 7 to be put on production by mid-2023. Can you possibly outline expectations for production for the following year?
AH: Yeah, because these wells were actually drilling from the platform. They take about 45 to 48 days to drill and complete and the first two we have a re-completion in a new drill. So, if we were to spud it, say the middle of September, by the end of October, we should have both those wells on production and creating revenue and then after that we will have a couple more wells. I’m not sure it’s going to be one or two wells. November, December we could have three to four wells on production by the end of 2022. So, we should be getting pretty quick cash flow.
TMH: Is there anything you can tell us what’s going to happen after drilling the wells, any plans for Trillion?
AH: So, I think I’m going to probably focus a lot on natural gas. So, we have these seven wells for the reserves. We then have another 10 wells. There’s some exploration on the block. So that’s when I’ll be starting to pursue some of that and then off the block, there will be again more exploration but predominantly because we’re going to be generating a lot of revenue. I’m going to be looking for underfunded natural gas projects in Turkiye and in this area.
TMH: Back in August, I heard that you appointed a new director and a new CFO. How have they settled into the company?
AH : Yeah, so the CFO we have was actually the accounting manager or the kind of like the financial person of the Turkish arm of the company and so we promoted her because as we start generating more cash flow from Turkiye, the accounting is going to be more from there. She has a lot of experience, so it’s no big step for her to just become the CFO and then with Sean, he we are looking for a more brighter not brighter but broader experience. He has a lot of green energy. So, he stepped into the directorship and then David Thompson, who was a CFO, I asked him to step up and take a larger role as a director or on the board because with the larger revenue and the company now being in that situation, I need a more stronger type board to give direction and he has a lot of experience and also involved with Forum Energy and Sea Dragon. So as things have changed, I think for the better for the company.
TMH: Sounds like you’re trying to keep all the bases covered.
AH: Yeah, that’s correct.
TMH: And then last, because I know you’re very busy. Are there any parting thoughts you’d like to leave us with today before I let you go?
AH: Yeah, one very quick one. It’s been a long road but here we are. Now we have the money, we have the facility, we have the gas that we can put on because as reserves, we’re in a high price environment, the story now has become very boring and for making money boring is good. So, that’s my last comment.
TMH: Well, thanks again for joining us Arthur at The Market Herald. I appreciate it.
AH: Thanks for having me on. I appreciate it too.
Again, we’ve been speaking with Arthur Halleran, CEO and President of Trillion Energy.
To stay up to date on Trillion. You can find them on the CSE under TCF.
I’m Brieanna McCutcheon for The Market Herald Canada. Thanks for watching.
FULL DISCLOSURE: This is a paid article produced by The Market Herald.