TOUCHSTONE ANNOUNCES
CASCADURA-2 DRILLING RESULTS AND AN OPERATIONAL
UPDATE
CALGARY, ALBERTA (February 8, 2024)
- Touchstone Exploration Inc. ("Touchstone", "we", "our" or the
"Company") (TSX, LSE: TXP) is pleased to announce an operational
update, highlighted by the drilling results of the Cascadura-2
delineation well.
Highlights
·
The Cascadura-2 delineation
well was drilled to a total depth of 7,132 feet.
· Drilling of the well was suspended prior to the planned total
depth of 8,300 feet to preserve the substantial pay section
observed in the well after high pressure gas zones were
encountered.
· Cascadura-2 openhole logs and drilling data indicated a total
sand thickness of approximately 525 feet in the targeted Herrera
formation.
· The
Cascadura-2 well is currently being cased and production testing is
scheduled to commence in the third quarter of 2024 directly into
the Cascadura natural gas facility.
· Spudding of the Cascadura-3 development well is scheduled to
commence within the next two weeks.
· Flow
line procurement has commenced to tie-in future production from the
Cascadura C surface location to the Cascadura natural gas
processing facility.
· Completed the first stage of additional perforations at
Cascadura Deep-1 where we are currently monitoring initial
increased pressure and production rates.
· Drilling at our CO-1 block is scheduled to commence prior to
the end of February, with two wells to be drilled from a single
surface location.
· Achieved average net sales volumes of 8,504 barrels of oil
equivalent per day ("boe/d") in the fourth quarter of 2023 and
annual 2023 net sales volumes of 3,981 boe/d.
Paul Baay, President and Chief Executive Officer,
commented:
"The encouraging Cascadura-2 delineation well
drilling results represent a great start to 2024. Cascadura-2 has
proved up the concept of highly productive sands extending
significantly to the east of our initial Cascadura discovery. We
estimate that the well was drilled for under $6 million on a gross
basis, which further enhances the economics of this prolific
hydrocarbon fairway. With this new data point we can design a multi
year drilling program to fully develop the structure. This well has
not defined the eastern most edge of the structure, which warrants
further delineation through future drilling."
Cascadura-2 Drilling Results
The Cascadura-2 delineation well was
spud on January 6, 2024 from our Cascadura C surface location and
reached a total depth of 7,132 feet on February 4, 2024. While we
planned to drill the well to a total depth of 8,300 feet, the gas
sands encountered proved difficult to manage, and we ceased
drilling to preserve the substantial pay section observed in the
well.
Drilling samples and openhole wiring
logs indicated over 525 feet of sands in the targeted Herrera
formation with hydrocarbon shows observed in samples and at surface
throughout the primary intervals. The top of the key Herrera
formation was detected at a measured depth of 6,186 feet, with sand
and shows observed throughout the section to the total depth of the
well. Based on these encouraging results, we are currently
installing casing for future production.
We expect to test the well directly
into the Cascadura natural gas facility in the third quarter of
2024.
Cascadura-3 Development Well
The Star Valley #205 drilling rig
will be walked to the Cascadura-3 development well location on our
Cascadura C site when casing installation at Cascadura-2 is
complete. We expect to spud the well within the next two weeks,
which will target the same Herrera formation as the existing
Cascadura producing wells.
Cascadura Infrastructure
The Company has commenced clearing
the road from the Cascadura C surface location to the Cascadura
natural gas facility. A flowline network will be installed to
tie-in development wells drilled at the Cascadura C surface
location, which is located approximately 1.6 kilometres northeast
of the Cascadura facility. We are also planning to install an
additional gas separator at the Cascadura facility to increase
gross natural gas production capacity from approximately 90 million
cubic feet per day ("MMcf/d") to 140 MMcf/d. The flowline and
infrastructure upgrades are anticipated to be completed in the
third quarter of 2024.
Cascadura Optimization
Touchstone continues to optimize
Cascadura Deep-1 and Cascadura-1ST1 well production. The first
stage of additional perforations was completed in the Cascadura
Deep-1 well on January 27, 2024. We continue to monitor production
as the well stabilizes, and we are currently evaluating deeper
sands for additional perforations to further optimize production
from the well throughout 2024. Currently, Cascadura-1ST1 production
is restricted based on surface choke size. Prior to the end of the
month, we intend to replace the current surface choke with a larger
unit, which will enable increased natural gas
production.
CO-1
As previously announced, Touchstone
intends to drill two wells from one surface location on the CO-1
block. Drilling operations remain on schedule, with the spudding of
the first well expected before the end of February 2024.
2023 Sales Volumes
In the fourth quarter of 2023, we achieved
average net sales volumes of 8,504 boe/d as follows:
· Cascadura field contributed average net sales volumes of 6,854
boe/d (8,566 boe/d gross) consisting of:
- net natural gas sales volumes of
37.4 MMcf/d or 6,232 boe/d (46.7 MMcf/d or 7,789 boe/d gross);
and
- net natural gas liquids volumes of
622 barrels per day (777 barrels per day gross);
· net
average natural gas sales volumes from Coho were 3.1 MMcf/d or 517
boe/d (3.9 MMcf/d or 646 boe/d gross); and
· average
net and gross daily crude oil sales volumes were 1,133 barrels per
day.
On a 2023 annual basis, Touchstone
averaged net sales volumes of 3,981 boe/d, consisting of 35 percent
crude oil and liquids and 65 percent natural gas
volumes.
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a
Calgary, Alberta based company engaged in the business of acquiring
interests in petroleum and natural gas rights and the exploration,
development, production and sale of petroleum and natural gas.
Touchstone is currently active in onshore properties located in the
Republic of Trinidad and Tobago. The Company's common shares are
traded on the Toronto Stock Exchange and the AIM market of the
London Stock Exchange under the symbol "TXP".
For further information about
Touchstone, please visit our website at
www.touchstoneexploration.com or contact:
Touchstone Exploration Inc.
Paul Baay, President and Chief
Executive Officer
James Shipka, Chief Operating
Officer
|
Tel: +1 (403) 750-4487
|
Shore Capital (Nominated Advisor and Joint
Broker)
Daniel Bush / Toby Gibbs / Iain
Sexton
|
Tel: +44 (0) 207 408 4090
|
Canaccord Genuity (Joint Broker)
Adam
James / Ana Ercegovic
|
Tel: +44 (0) 207 523 8000
|
FTI
Consulting (Financial PR)
Nick Hennis / Ben
Brewerton
|
Tel: +44 (0) 203 727 1000
Email: touchstone@fticonsulting.com
|
Advisories
Working Interest and
Currency
Touchstone has an 80 percent
operating working interest in the Cascadura field, which is located
on the Ortoire block onshore in the Republic of Trinidad and
Tobago. Heritage Petroleum Company Limited ("Heritage") holds the
remaining 20 percent working interest. Touchstone has a 100 precent
working interest in the CO-1 block via a sublicense agreement with
Heritage.
Unless otherwise stated, all
financial amounts presented herein are stated in United States
dollars, and all production volumes disclosed herein are sales
volumes based on Company working interest before royalty
burdens.
Forward-Looking
Statements
The information provided in this
announcement contains certain forward-looking statements and
information (collectively, "forward-looking statements") within the
meaning of applicable securities laws. Such forward-looking
statements include, without limitation, forecasts, estimates,
expectations and objectives for future operations that are subject
to assumptions, risks and uncertainties, many of which are beyond
the control of the Company. Forward-looking statements are
statements that are not historical facts and are generally, but not
always, identified by the words "expect", "plan", "anticipate",
"believe", "intend", "maintain", "continue to", "pursue", "design",
"result in", "sustain" "estimate", "potential", "growth",
"near-term", "long-term", "forecast", "contingent" and similar
expressions, or are events or conditions that "will", "would",
"may", "could" or "should" occur or be achieved. The
forward-looking statements contained in this announcement speak
only as of the date hereof and are expressly qualified by this
cautionary statement.
Specifically, this announcement
includes, but is not limited to, forward-looking statements
relating to: the Company's business plans, strategies, priorities
and development plans; the quality and
quantity of prospective hydrocarbon accumulations based on openhole
wireline logs, including the Company's interpretations
thereof; expected drilling activities,
including locations and the timing thereof, anticipated timing of
well tie-in operations and facility upgrades; anticipated timing of
future well production testing; the Company's expectation of
increased future production from well optimization activities; and
Touchstone's current and future financial position, including the
sufficiency of resources to fund future capital expenditures and
maintain financial liquidity. The Company's actual decisions,
activities, results, performance, or achievement could differ
materially from those expressed in, or implied by, such
forward-looking statements and accordingly, no assurances can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur or, if any of them do, what
benefits that Touchstone will derive from them.
Although the Company believes that
the expectations and assumptions on which the forward-looking
statements are based are reasonable, undue reliance should not be
placed on the forward-looking statements because the Company can
give no assurance that they will prove to be correct. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. Certain of these
risks are set out in more detail in the Company's 2022 Annual
Information Form dated March 23, 2023 which is available under the
Company's profile on SEDAR+ (www.sedarplus.ca)
and on the Company's website (www.touchstoneexploration.com).
The forward-looking statements contained in this announcement are
made as of the date hereof, and except as may be required by
applicable securities laws, the Company assumes no obligation or
intent to update publicly or revise any forward-looking statements
made herein or otherwise, whether as a result of new information,
future events or otherwise.
Product Type
Disclosures
In this announcement, references to
"crude oil" refer to "light crude oil and medium crude oil" and
"heavy crude oil" combined product types; references to "natural
gas liquids" refer to condensate; and references to "natural gas"
refer to the "conventional natural gas" product type, as such terms
are defined in National Instrument 51-101 Standards of Disclosure for Oil and Gas
Activities ("NI 51-101"). References to "crude oil and
liquids" herein include crude oil and natural gas
liquids.
For information regarding historical
production product disclosures in accordance with NI 51-101, please
refer to the "Advisories -
Product Type Disclosures"
section in the Company's most recent Management's discussion and
analysis for the three and nine months ended September 30,
2023 available on SEDAR+ (www.sedarplus.ca) and on the Company's website (www.touchstoneexploration.com).
Oil and Natural Gas
Measures
Where applicable, natural gas has
been converted to barrels of oil equivalent (boe) based on six
thousand cubic feet (Mcf) to one barrel (bbl) of oil. The barrel of
oil equivalent rate is based on an energy equivalent conversion
method primarily applicable at the burner tip and given that the
value ratio based on the current price of crude oil as compared to
natural gas is significantly different than the energy equivalency
of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may
be misleading as an indication of value. This conversion factor is
an industry accepted norm and is not based on either energy content
or prices.
Competent Persons
Statement
In
accordance with the AIM Rules for Companies, the technical
information contained in this announcement has been reviewed and
approved by James Shipka, Chief Operating Officer of Touchstone
Exploration Inc. Mr. Shipka is a qualified person as defined in the
London Stock Exchange's Guidance Note for Mining and Oil and Gas
Companies and is a Fellow of the Geological Society of London (BGS)
as well as a member of the Canadian Society of Petroleum Geologists
and the Geological Society of Trinidad and Tobago. Mr. Shipka has a
Bachelor of Science in Geology from the University of Calgary and
has over 30 years of oil and gas exploration and development
experience.
This announcement contains inside information for the purposes
of Article 7 of the UK version of the Market Abuse Regulation (EU)
No.596/2014, which forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018.