Trillion Energy International today announced its financial results for the three and six month periods ended June 30, 2023 and an operational update on efforts to increase production from the six SASB gas wells.

President & CEO, Arthur Halleran commented:
“After successfully completing six wells, our focus now turns to maximizing production of the wells targeting paridy with historical production rates, through system tweeks and other means of resolving production bottlenecks. We have now engaged a third party provider to provide a quotation and recommendations for increasing production from the six wells. The important takeaways will provide guidance for standard operating procedures in the next phase of SASB gas wells.”

Operational Update

Trillion has now drilled five successful long-reach directional wells and one re-completion at SASB and will continue to take steps to optimize production. To increase production, Trillion has contracted a service provider to present recommendations for a slimhole ESP (electric submersible pump), power cables, pump control surface equipment and electric power supply for West Akcakoca-2 and Akcakoca-3. At the end of August pump selection will be made. Reperforation of South Akcakcoa-2 will occur around the same time followed by Guluc-2.

Trillion’s focus is on increasing production on the existing six wells to match production rates previously achieved from the eight legacy wells. We believe that past production history is a useful analog for predicting future production trends and results. To predict future production at the three tripod gas fields (Akkaya, East Ayazli and Ayazli), past production profiles were evaluated and assumed to represent a middle case for Trillion’s five newly drilled wells and the one re-completion. The historic tripod production (commencing 2007) averaged 15.4 MMcf/d for 34 months (gross), after which production went into a hyperbolic decline and averaged a daily production of 12.95 MMcf/d for the next 12 months and averaged a daily production of 6.88 MMcf/d for the following 12 months, and 4.1 MMcf/d for the next 12 months and then continued for many more years at >2 MMcf/d.  

Financial and Operating Highlights – Second Quarter of 2023 

• Gross gas production to Trillion for the SASB gas field averaged 8.16MMcf/d (100% interest) in Q2 2023, an increase of 2.42MMcfd (+42%) compared to Q1 2023 (5.74 MMcfd). 
• By the end of Q2 2023, the Company had 5 producing wells and a combined average total daily Q2 2023 production rate of 8.16 MMcf/d (100% interest). Each well produced for an average of 1.5 months during the quarter.
• Total Q2 2023 revenue of US $5.8 million (C$7.8 million), an increase of 288% from Q2 2022.
• Natural gas prices averaged US $13.11 effective for all natural gas sales between April 1, 2023, to June 30, 2023, compared to $21.66 in Q1 2023 (-39%). 
• Operating income of US$613,232 for the three months ended June 30, 2023, compared to an operating loss of $616,660 for the three months ended March 31, 2022. 
• For the 3 months ended June 30, 2023, oil and gas capital expenditures totaled US $12.2 million, net of JV contributions, including well costs for Bayhanli-2 and Alapi-2 wells, seismic reprocessing costs and long-lead purchases. Wells costs for Alapli-2 are included, but production of this well does not start until Q3 2023.
• The Company closed a convertible debenture financing for gross proceeds of C$15 million (~US$11 million).   
• During Q2 2023, the Company completed and put into production the Bayhanli-2 well with initial gross flow rates of 8MMcf/d to 9MMcf/d. The Company also spud the Alapi-2 well in June 2023, which was put on production in Q3 2023 (August 2023), at an initial gross rate of 8.7 MMcf/d.