skip to Main Content
 

Touchstone increases reserves by 33% year-on-year

*

Touchstone Exploration [LON:TXP] the Calgary-based oil exploration and production company with assets in Trinidad & Tobago, today (6th March) published its end-of-year reserves estimate.

The AIM-listed oil company announced that its proved developed producing assets had increased 33% year-on-year to 4,843 million barrels of oil equivalent (mboe) and had achieved initial production from its Coho-1 well of around 955 barrels a day (bpd) in 4Q22 contributing to average quarterly production volumes of 2,229bpd and average 2022 annual production volumes of 1,581bpd.

New well clearance

The firm said that it had in 2022 concentrated on exploration activities in its Ortoire concession, where it completed construction of Coho-1 Trinidad’s first onshore gas facility in 20 years. The company also received a certificate of environmental clearance to move ahead with development of its Cascadura gas project Ortoire in August 2022.

The company did not drill new exploration or development wells in 2022.

The new development will be a 200 million cubic foot a day gas capacity multi-well production plant at surface level, which will also be capable of processing 5,000bpd of liquids and 200bp of water.

The wellsite at Cascadura’s A wellsite will contain enough storage to hold 8,800 barrels of liquid, while eight wells will be drilled at the Cascadura B and C pads plan to extract hydrocarbons. Ortoire will also gain new associated pipelines and infrastructure. Ortoire stretches 44,731 acres on the eastern side of Trinidad, the nation’s largest island. Touchstone holds an 80% working interest in the licence, with Heritage Petroleum Company owning the remaining 20%.

Touchstone opened trading at 70.1p today and had risen to 71.5p in the firs 45 minutes of trading. The company has offered a year-to-date return of 26.6% and a one-year return of -26.2%, with its shares ranging between 51p and 114p over a 52-week period, giving the company a market capitalisation of GBP162m.

The company completed two rounds of funding in Canada and the UK in 2022, totalling GBP11m. The funding, issued at 54.5p and the equivalent in Canadian dollars was expected to raise a ceiling of GBP10.6m. The explorer’s chief executive, Paul Baay said at the time: “The fundraise allows us to accelerate our exploration and development program on the Ortoire block, which has yielded excellent results to date.”

Touchstone has been operating in Trinidad & Tobago since 2010 and has established a strong track record of success in the region. It is focused on onshore development. The company has a diverse portfolio of assets and a proven management team with deep expertise in the local geology and operations.

Exploration with production

The company’s primary assets are located onshore in the prolific Orinoco Heavy Oil Belt in southern Trinidad. Touchstone’s primary production comes from the Coora-1 well, which produces light crude oil and has been in operation since 2013. The company also has several other exploration and development projects underway in the region.

Touchstone’s financial performance has been strong in recent years, driven by increasing production and a disciplined cost structure. In 2020, the company reported revenue of USD34.4m, an increase of 2% compared to the previous year, and a net income of USD3.7m. In today’s announcement the company said its net present value of future net revenues discounted at 10% on a before tax PDP basis increased by 21% to USD62.6m from the prior year.


Looking ahead, Touchstone plans to continue to expand its production in Trinidad & Tobago through a combination of exploration and development projects. The company has a strong balance sheet and is well-positioned to capitalize on growth opportunities in the region.

Craig Howie an analyst for broker, Shore Capital, which covers the company said: “…despite continuing to trade above December’s 54.5p placement price, and a health rebound in recent days, the prevailing share price clearly remains at a very substantial discount to our 215p/share risked NAV.”

Howie continued: “We will similarly revisit our sum-of-parts valuation  following the forthcoming FY22 results, although, in the meantime we remain very comfortable with our last published risked NAV estimate following this morning’s reserves update.

Like this article? Sign up to our free newsletter.

This article does not constitute investment advice. Do your own research or consult a professional advisor.

The Armchair Trader's 'How to' Guides

In-depth Reports

Detailed reviews of selected companies and investment trusts.

Thanks to our Partners

Our partners are established, regulated businesses and we are grateful for their support.

Aquis
FP Markets
IG
Pepperstone
WisdomTree
CME Group
Back To Top