Trillion Energy (TCF.CN), a natural gas-producing company operating in the Black sea region, announced on September 15 that it was now part of the CSE25, meaning it is now part of the twenty-five largest index companies by market capitalization. The company could take the opportunity of Europe’s will to reduce its dependency on Russian natural gas to grow its business, resulting in a bigger market cap.

Trillion Energy operates in the Black Sea

Trillion Energy (TCF.CN) is an oil and gas-producing company with multiple assets throughout Turkiye and Bulgaria. The company is 49% owner of the SASB natural gas field, one of the Black Sea’s first and largest-scale natural gas development projects; a 19.6% (except three wells with 9.8%) interest in the Cendere oil field; and Bulgaria, the Vranino 1-11 block, a prospective unconventional natural gas property. Its Black See Natural Gas Project-South Akcakoca Sub-Basin Gas Field (SASB) is the company’s first commercial natural gas development project. From 2008 to nowadays, the SASB gas field has produced approximately 41 Billion cubic feet of natural gas shared between the project partners. The company recently announced its Uranus rig arrived on site, and its multi-well drilling program has commenced. The rig’s arrival was delayed due to maintenance and weather conditions in the Black Sea. Located at the Atçakoca platform where the first wells are being drilled, three directional wells will be drilled on this platform, plus one completion of an existing well will occur. The span of this operation is expected to be completed within six months. The first gas production is expected in early November 2022.

More recently, the company announced it is fully funded to execute its initial seven well development program and an additional ten wells using cash flow generated from the first seven wells. It comes at an essential time as Europe struggles to find gas suppliers because of sanctions against Russia. This supply is indeed imperative. Multiple gas sources are going offline, such as the Nord Stream I & II pipelines, which are now non-operational because of explosions damaging them. Moreover, the Groningen field, owned by ExxonMobil and Shell, has been forced to reduce production by the Dutch government to less than 2 Billion Cubic Meters. Also, Russia cut gas supplies to Italy, reduced Moldova’s gas supply by 30%, and announced the closure of the pipeline going through Ukraine to Europe. Trillion’s development will provide much-needed natural gas at $30+/mcf current pricing during acute shortages.

“Trillion Energy is pleased to bring new production online for heating and power just in time for the cold winter. We are very excited that our first two wells are on schedule for completion and supply of natural gas by November this year. The SASB region of the Black Sea has promising potential to supply much more gas to Turkiye and Europe as more production is brought online.”

Arthur Halleran CEO

Arthur Halleran leads the company and served as a director since October 4, 2011. About the previous experience, he founded Canacol Energy Ltd., a company with petroleum and natural gas exploration and development activities in Colombia, Brazil, and Guyana which made a billion-dollar natural gas discovery in Colombia. Mr. Halleran has a Ph.D. in Geology from the University of Calgary and 40 years of petroleum exploration and development experience.

Share information/financials

The company has a strong balance sheet. Indeed, in the company’s most recent financial statement for the period ending June 30, Trillion Energy announced it had $23.5M in the bank, $33M in total assets for $10.5M in total liabilities. The company generated $1.5M in oil & gas revenue, but expenses remained higher. Amongst the most significant expenses, $735k was spent on production, and general & administrative expenses represented $1.2M.

There are 369M shares outstanding. Additionally, Trillion Energy has 7.42M options at an average exercise price of $0.12 and 110.7M warrants at an exercise price of $0.34.  

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Share Movement

Trillion Energy’s stock price is hovering below $0.50. The stock is close to its 52-week high of $0.55. The company’s 52-week low of $0.15 seems far, and regarding the current European situation, the stock price shouldn’t see these lows. Many indicators lead us to say it is an excellent time to accumulate at these prices. Indeed 15 technical data show the stock price is a buy versus ten neutral signals and only one sell.

Moreover, the company’s 1-year price target is $1.35, representing a 181% increase. The Relative Stress Index proves the stock price is healthy and no strong selling should occur. The RSI is worth 58 (70 and above means overbought, while 30 and under means oversold).

Bottom Line

Given the current situation in Europe with the gas supply, Trillion Energy (TCF.CN) is positioned as a winner to get more market share. With the arrival of the Uranus rig, the SASB project will add another revenue stream to the company. Finally, the recognition from the CSE to be added to the CSE25 proves that Trillion Energy will be an essential part of the index in the future.

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