Trillion Energy (TCF) - Gas Developer Taking Advantage of Sanctions

Trillion Energy International Inc. is an oil and gas producer with various assets throughout Turkey and Bulgaria. The company holds a 49% interest in the SASB natural gas field, located in the Black Sea, as well as a 19.6 interest in the Cendere oil field in Bulgaria, with a 9.7% interest in three other wells as well as an exploration project, the Vranino 1-11 block, which is a prospective unconventional natural gas property.

Company Overview

The company announced at the end of March 2022 that it had concluded an oversubscribed private placement deal with total gross proceeds to the company of approximately USD$ 17,913,000. The initial private placement was set to be USD$ 10 million, but due to high demand, the private placement was increased.

The company further announced in late April 2022 that it had received a report from a third-party engineering firm, Netherland Sewell & Associates, Inc. concerning its 98,000-acre Vranino 1-11 natural gas exploration licence block in the Dobrudja Basin, Bulgaria. The report showed 1,145.5 billion cubic feet of natural gas in undiscovered original gas in place and 572.8 billion cubic feet of unrisked gross prospective gas resources at the exploration property.

The company has also signed a definitive offshore drilling services contract with Romanian based GSP Offshore SRL to secure a jack-up rig for its planned 2022 – 2023 drilling program at the SASB natural gas field project. The company plans to drill five wells from existing wellhead production platforms at the SASB natural gas field project, with the first well expected to be spud in August 2022.

Trillion Energy International Inc. also intends to raise an additional USD$ 12 million, which it believes will be the final equity raise necessary to complete its initiatives at the SASB natural gas field project. The company plans to possibly farm the Vranino 1-11 natural gas exploration licence out to an industrial partner in the future, and through this receive returns for its shares, which will enable it to continue focussing on its SASB natural gas field project.

Management Team

Trillion Energy International Inc. is led by Dr Arthur Halleran, who serves as the President, CEO and Director of the company. Halleran holds a PhD in Geology from the University of Calgary and has more than 38 years of experience in petroleum exploration and development. He is also the co-founder of Canacol Energy Ltd., the largest gas producer in Columbia. Halleran has been involved with various energy companies including Petro-Canada and Chevron Energy throughout the world in countries including Canada, Colombia, Egypt, India, Guinea, Ecuador and Guyana.

David Thompson is the Chief Financial Officer (CFO), as well as a Director of Trillion Energy International Inc. Thompson, has more than 30 years of experience in the oil and gas sector, with him successfully founding an oil trading company in Bermuda, with offices in the United States, Geneva, Moscow and Amsterdam. Thompson has experience in the management of production operations, including operations in the Lhamov and Zhdanoy oil fields, and has in the past raised over USD$ 100 million in equity. Thompson’s experience further includes serving as Founder, President and CEO of Sea Dragon Energy Inc. as well as serving as CFO for both Aurado Energy and Forum Energy Corporation.

Kubilay Yildirim is the General Manager of Turkey for the company and has more than 20 years of experience in drilling, production, seismic acquisition, and logistics for both onshore and offshore projects in Turkey. He holds a degree in Petroleum and Natural Gas Engineering from Middle East Technical University and an MBA from Bilgi University in Istanbul. Yildirim has also been involved with the SASB project of the company for most of his career.

Ozge Karalli is the Finance Director for the company in Turkey. Karalli started her career with Deloitte in 1998 and joined Toreador Resources in 2004. Toreador Resources previously held a 26.75 % interest in the SASB project. She holds a Bachelor of Economics degree from Bilkent University and has been a Chartered Public Accountant (CPA) in Turkey since 2002.

Dr Barry Wood rounds out the management team as Director of Trillion Energy International Inc. Wood has more than 45 years of experience in the upstream oil and gas industry. Wood has in the past been involved with the management of various companies including Shell Canada and Marathon International Oil Company, where he directed asset evaluations across Southeast Asia and the Afro/Arabian regions, and drilling campaigns in Egypt and Syria for over 16 years. He is also the founder of PetroQuest International SA, a private exploration and advisory firm.

Projects

Trillion Energy International Inc. holds two producing assets and an exploration licence in its asset portfolio, with the company primarily focused on its South Akcakoca Sub-Basin (SASB) Gas Field project in the Black Sea, Turkey. The other projects of the company are the Vranino 1-11 exploration licence in Bulgaria and the Cendere Oil Field in Turkey.

Trillion Energy International Inc. acquired a 36.75% in the SASB Gas Fields project in 2017, through the acquisition of Park Place Energy Turkey (PPETL), the company then further increased its interest in the project in January 2018 to its current position of 49% interest in the project. The remaining 51% of the project is owned by Türkiye Petrolleri Anonim Ortaklığı (TPAO). The first and second phases of production of the project commenced in 2007 and 2011.

The SASB Gas Fields project is a shallow water conventional gas field consisting of four discovered non-produced gas pool reserves and numerous development gas that boasts very good seismic, geophysical, geological, and engineering data.

The project hosts 20.25 billion cubic feet (bcf) of natural gas in class 2P and 31.4 billion cubic feet of class 3P natural gas. The discovered but not producing wells boast an NPV10% of USD$ 75.75 million and USD$ 129.2 million respectively. The company plans to develop the project’s seventeen shallow water gas wells in the coming year through directional drilling from existing platforms and infrastructure.

The Cendere Oil Field of the company is a producing asset in Bulgaria, currently producing 115 barrels of oil per day, with 1.27 million stock barrels still in reserves. The Cendere oil field is a profit-generating operation and will have the capacity to continue producing until 2026. The Vranino natural gas exploration licence block of the company is a 98,205-acre land package in North-Eastern Bulgaria. The natural gas deposit of the project ranges between depths of 1200 to 2200 m with it also having the potential for horizontal lateral wells.

Equity Financing

Trillion Energy International Inc. announced at the end of March 2022 that it had concluded an oversubscribed private placement deal that resulted in total gross proceeds to the company of approximately USD$ 17,913,000. The initial private placement was set to be USD$ 10 million, but due to high demand, the private placement was increased.

The initial private placement consisted of 62,198,000 units of the company at a price of USD$ 0.165 per unit resulting in gross proceeds of USD$ 10,262,000. The company then offered a further 46,368,643 units, also at a price of USD$ 0.165 for additional gross proceeds of USD$ 7,651,000. The units offered in the private placement offerings consisted of one common share of the company, and one half of a common share purchase warrant of Trillion Energy International Inc. The common share warrant entitles the holder thereof to purchase one common share of the company at USD$ 0.45 within two years of its issue.

The private placement also saw the company pay finders fees to the applicable finders, worth USD$ 622,000 as well as the issuing of 1,909.000 common share warrants to the finders entitling them to purchase a common share of the company at USD$ 0.45 within two years of issuing. The private placement enabled Trillion Energy International Inc. to settle approximately USD$ 315,000 of debt to various parties.

40% natural gas price hike

The implemented sanctions against Russia by various European countries, due to Russia’s activities in Ukraine, have created a high demand for natural gas. The high demand has been caused by the cancellation of the Nord Stream 2 pipeline, which was set to deliver natural gas through a 1,200 km pipeline running underneath the ocean from Russia to Germany, by the country. 

The cancellation of the pipeline, coupled with high seasonal demand and the regional conflict in Ukraine saw Trillion Energy International Inc. receive a 40% increase in its sales price of natural gas delivered by the company’s SASB gas field. The price increase has seen the price received by the company per million cubic feet of natural gas (mcf) change from USD$ 8.84per mcf in 2021 to USD$ 17,93 per mcf.

Recent activities

Trillion Energy International Inc. announced in late April 2022 that it had received a report from a third-party engineering firm, Netherland Sewell & Associates, Inc. concerning its 98,000-acre Vranino 1-11 natural gas exploration licence block in the Dobrudja Basin, Bulgaria. The report showed 1,145.5 billion cubic feet of natural gas in undiscovered original gas in place and 572.8 billion cubic feet of un-risked gross prospective gas resources at the property. The report was issued in the same period as the cut-off of natural gas to Bulgaria from Gazprom, the Russian majority state-owned energy company.  The cut-off was prompted by the refusal of Bulgaria to pay the natural gas supply in Russian Roubles. The price of natural gas in Bulgaria in early April 2022 was at a high of USD$ 22.35/mcf.

Trillion Energy International Inc. announced in early May 2022, that it had recommenced trading on the OTC Markets platform under the new stock symbol TRLEF. The company further announced in May 2022, that it had made significant advances in its SASB drilling program. The advances of the drilling program included preliminary technical meetings with various project partners, the publishing of requests for quotation (RFQs) for various long lead items and the payment of USD$ 1.8 million to serve as a deposit for the securing of a long-legged jack-up rig from a Romanian based company.

The preliminary works enabled the company to sign a definitive offshore drilling services contract with Romanian based GSP Offshore SRL. GSP Offshore SRL will provide a jack-up rig for the company’s planned 2022 – 2023 drilling program at the SASB natural gas field project. The jack-up rig is expected to arrive on-site in August 2022, following the completion of the currently underway work of the rig in Romania.

Future Initiatives

Trillion Energy International Inc. plans to drill five wells from existing wellhead production platforms at the SASB natural gas field project. The first well is expected to be spud in August 2022, with the completion of the remaining four wells taking approximately 40 days per well. The company plans to put each drill well into production as soon as it is completed. The jack-up rig procured by the company will also be implemented for the re-entry and re-completion of two existing wells at the project.

The company also intends to conduct an additional public offering in the near future which will be aimed at raising an additional USD$ 12 million. Trillion Energy International Inc. believes that this will be the final equity raise necessary for it to complete its initiatives at the SASB natural gas field project.

The company also plans to farm the Vranino 1-11 natural gas exploration licence out to an industrial partner in the future. The company believes that the returns it will receive for its shares due to the farm-out will enable it to continue focussing on its SASB natural gas field project.

To find out more, go to the Trillion Energy website