Rising Star
Trillion Energy Ready to Supply Much Needed European
Gas
September 29, 2022 -- InvestorsHub
NewsWire -- via By Kerry Lutz - Resource World Magazine
Trillion Energy
International Inc (OTC: TRLEF – CSE: TCF – Frankfurt: Z62) is a company in the right place
at the right time as it is poised to bring on desperately needed
natural gas production within
weeks to the European market.
With energy prices
going parabolic, gas supplies cut off and the Ukraine War drags on
with no end in sight, Europe is facing a long cold winter and a
decade of sky-high energy pricing. Russia has indefinitely
shuttered the Nord Stream Pipeline, thereby cutting off much of
Europe's natural gas supply, in retaliation for Western sanctions.
The pipeline won't flow again until the sanctions are removed,
according to Russian sources.
European natural
gas and power prices are near record high levels. Electric prices
in Germany and around the continent are now exceeding $1000 per
megawatt, far exceeding the US's average of $154! Staggering
increases are negatively impacting businesses and consumers. Many
have no choice but to go without. After seeing geometric electric
price increases, many businesses, such as the UK Pub industry, may
soon be history.
In Italy, average
household power bills have increased to €500 per month from €160 in
2021 with estimates of increases to €600, based on Russian shut
down of the Nord Stream pipeline.
For Europe as a
whole, based on the Forward TTL power prices as represented in the
below chart, energy bills could hit 15% of GDP or €2 TRILLION. In a nightmare scenario, energy
costs could hit 20% of GDP, according to research by
Goldman Sachs, as illustrated below:
Numerous European
electric power suppliers are insolvent due to the soaring price of
natural gas. The government bailouts are just getting started;
rolling blackouts, "gas-outs," and industrial shutdowns are in the
cards. Fears of impending energy shortages have led Europeans to
start hoarding coal and firewood. Heat your home above 18 degrees
Celsius and risk going to jail for up to three years. Possible
energy rationing and exploding electric prices have ignited a
desperate search for new natural gas supplies to keep Europe from
freezing this winter. The impact of natural gas shortages has been
cataclysmic so far, and with winter looming, the worst could be yet
to come.
When will the
crisis end and gas and power prices return to normal? According to
Citigroup Inc, Europe will have to wait until later this decade
before seeing any meaningful relief.
While many bemoan
this sad, self-inflicted state of affairs, Trillion Energy (TRLEF;
TCF.CN) is doing something about it, having planned a massive
natural gas development in the Black Sea offshore Turkiye -prior to
the Ukraine War even starting, a project 10+ years in the
making.
Trillion's shares
are trading in the $0.32 range, up 233% year-to-date. A recently
released research report prepared by Research Capital Corp's
analyst Bill Newman, CFA suggests the stock is undervalued and
calls for a share price target of $1.02 (C$1.35), based on a 3.0 x
multiple of 2024F debt-adjusted cash flow. The Canadian Securities
Exchange also recently recognized Trillion's stellar performance
adding it to the CSE25 Index.
With the arrival of
the Uranus Drilling Rig from Romania this week, a massive natural
gas field in the Southwestern Black Sea of Turkiye will start gas
production imminently. Trillion Energy has been racing to commence
gas production having committed $100 million plus to a multi-year
offshore natural gas drilling program.
Marine ship pulling Uranus Rig to SASB Gas Field, September
2022
The production program utilizes a $600m+ historical investment into
the initial development and infrastructure of the field, including
12 miles of offshore pipelines tied to an onshore natural gas
processing facility, which is currently rated at 75MMcf per day but
is readily expandable to 150MMcf. Prior to the current development
phase, the SASB gas field produced 42+ billion cubic feet of gas,
which at today's $30 pricing would be worth $1.26 billion. These
figures could easily be eclipsed by the current drilling efforts
scheduled for completion in 2024.
Figure 1: Map of the SASB gas field development, Black Sea
CEO Arthur
Halleran (Ph.D.), a four-decade industry veteran, believes
that every cubic foot of natural gas counts – now more than ever –
and he has been working non-stop to bring the SASB project online
for several years. The SASB project will produce desperately needed
natural gas supplies -just in time for the cold winter.
With the Uranus
Drilling Rig, Trillion Energy plans to drill 17 new production
wells at the rate of one every 45 to 48 days. The accumulative
investment in SASB potentially makes it the largest natural gas
development in the Black Sea, where total development costs may
reach $1 billion.
While Halleran was
busy raising funds to finance the new development earlier on this
year, energy prices rose exponentially. By September of this
year, gas prices had risen exponentially to $30+ per mcf. The SASB
gas field economics were appealing at $6-7 per mcf gas when the
project was conceived, but now are truly overwhelming.
As a result of the
Company's efforts, perhaps more than any other emerging energy
producer, Trillion Energy is poised to profit from the once in a
lifetime, massive parabolic lift in European energy costs.
According to a recent statement by Trillion's CEO Art Halleran:
"We
believe the recent price increases will significantly enhance the
economic performance of … program set to commence … at the SASB gas
field. With seven wells producing, we will supply the region with
much-needed natural gas in a time of acute shortages and high
prices".
What makes the Company even more intriguing is its exploration
upside. Trillion's CEO stated that "SASB has the same Maykop source
rock as found at the recently discovered 19 Tcf Sakarya Gas Field.
This source rock is widespread and also occurs onshore Turkiye and
in South Caspian Sea area." The Sakarya Gas field is one of
the largest natural gas finds in the European region in more than
30 years and SASB is 100 miles south of Sakarya.
Trillion has 20 years of experience in this region and possesses a
wealth of historic seismic data, upon which it announced plans
earlier this year to conduct further exploration for new gas
discoveries.
Trillion's unique position as a natural gas producer in Europe at
the right time with an aggressive development plan unfolding makes
it poised to become a leader in new natural gas supply, as well as
a near-term cash cow beyond what its modest $140m market
capitalization would predict.
Small wonder that renowned oil and gas analyst Bill Newman, CFA is
calling for a significant rise in Trillion's share price to C$1.35
and the Company has been recently welcomed to the CSE25 index of
top performers.
SOURCE: Kerry Lutz - Resource World
Magazine