OPERATIONAL
UPDATE
CALGARY, ALBERTA (April 10, 2024) -
Touchstone Exploration Inc. ("Touchstone", "we", "our" or the
"Company") (TSX, LSE: TXP) provides an operational update,
highlighted by drilling results at our Cascadura-3ST1 delineation
well and our CO-374 development well.
Highlights
· The
Cascadura-3ST1 delineation well was drilled to a total depth of
8,252 feet, and openhole logs and drilling data indicated a total
sand thickness of approximately 900 feet in the targeted Herrera
Formation.
· The
Cascadura-3ST1 well has been cased and production testing is
scheduled to commence in the third quarter of 2024 directly into
the Cascadura natural gas facility.
· The
construction for the flowline from the Cascadura C surface location
to the Cascadura natural gas processing facility is progressing,
with anticipated completion in the third quarter of
2024.
· The
hazard and operability analysis ("HAZOP") and engineering designs
for the expansion of the Cascadura facility have been approved, and
procurement for the expansion has commenced.
· The
CO-374 development well on our CO-1 block was drilled to a total
depth of 5,684 feet, with openhole logs and drilling data
indicating a sand thickness of approximately 400 feet in the Forest
Formation and approximately 300 feet in the Cruse
Formation.
· The
CO-374 well has been cased for crude oil production and will be
completed once the CO-375 development well has been drilled and the
rig is moved from the location.
· The
CO-375 development well was spud on April 3, 2024 and is targeting
to be drilled to a total depth of 6,500 feet.
· Achieved average net sales volumes of 7,015 boe/d in the first
quarter of 2024.
Paul Baay, President and Chief Executive Officer,
commented:
"We are pleased with the successful results from the two
delineation wells at Cascadura, with both wells demonstrating the
quality and scale of the structure. In addition, the Cascadura-3ST1
well is the first to cross the C-fault to the east side of the
structure, an area where reserves have not been previously
assigned. The CO-374 development well is also noteworthy, as it has
the highest net pay we have observed to date on our crude oil
legacy blocks."
Cascadura-3ST1 Drilling Results
The Cascadura-3ST1 delineation well
was spud on March 4, 2024 from our Cascadura C surface location and
reached a total depth of 8,252 feet on March 29, 2024.
While drilling the well, a high-pressure gas kick
was encountered at a depth of approximately 7,500 feet which
resulted in wellbore instability issues. As a result, a portion of
the wellbore was redrilled via a sidetrack.
Drilling samples and openhole
wireline logs indicated over 900 feet of sand in the targeted
Herrera Formation, with over 230 feet of net hydrocarbon pay. The
top of the key Herrera Formation was detected at a measured depth
of 6,852 feet, with sand and shows observed throughout the section
to the total depth of the well. Based on these encouraging results,
the well has been cased for future production.
We continue to expect to test
the recently drilled Cascadura wells directly into the Cascadura
natural gas facility in the third quarter of 2024.
Cascadura Infrastructure
We are currently progressing with
the 1.6-kilometer road and flowline project, spanning from our
Cascadura C surface location to the Cascadura natural gas facility.
Presently, the flowline right-of-way has been fully cleared and
graded, road construction is approximately 65 percent complete, and
the watercourse culvert crossings are approximately 50 percent
complete. Additionally, the procurement of the flowline has been
finalized and the Company has issued a tender to local contractors
for the installation of the flowline and bridge
construction.
Progress has also been made on the
Cascadura facility expansion project. The engineering designs and
HAZOP have been completed and a new natural gas separator has been
procured. This separator is expected to increase the facility's
gross natural gas production capacity from approximately 90 MMcf/d
to 140 MMcf/d.
The Cascadura flowline and
infrastructure upgrades remain on track for completion in the third
quarter of 2024.
Cascadura Optimization
Since the facility commenced
operations in September 2023, choke adjustments have been made to
the Cascadura-1ST1 and Cascadura Deep-1 wells, resulting in
moderate success in increasing natural gas production rates.
Further, additional perforations were added to the Cascadura Deep-1
well with limited success. The Company continues to monitor
production rates from the wells and will optimize production where
possible.
CO-1 Drilling Operations
The CO-374 development well, located
on our CO-1 block, was spud on March 1, 2024 and reached a total
depth of 5,684 feet on March 22, 2024. The targeted Lower Forest
Formation was encountered at a depth of 3,491 feet and the Upper
Cruse Formation at a depth of 4,578 feet.
Drilling samples and openhole
wireline logs indicated the presence of sands in both the Forest
and Cruse Formations. The Forest Formation indicated 400 feet of
sand, with approximately 250 feet of net hydrocarbon pay.
Similarly, the Cruse Formation indicated 300 feet of sand, with 150
feet of net hydrocarbon pay. The well has been cased in preparation
for oil production and will be perforated when the CO-375 well is
drilled and the rig is relocated.
The CO-375 development well, located
on the same surface location as the CO-374 well, was spud on April
3, 2024 and is targeting oil sands in the Forest and Cruse
Formations with a planned total depth of 6,500 feet. Operations are
underway with surface casing set and cemented at a depth of 1,495
feet.
First Quarter 2024 Sales Volumes
In the first quarter of 2024, we achieved
average net sales volumes of 7,015 boe/d as follows:
· Cascadura contributed average net sales volumes of 5,389 boe/d
consisting of:
- net natural gas sales
volumes of 30.8 MMcf/d or 5,127 boe/d with an average realized
price of $2.49 per Mcf; and
- net natural gas
liquids volumes of 262 bbls/d with an average realized price of
$69.60 per barrel;
· Coho
field net average natural gas sales volumes were 2.8 MMcf/d or 460
boe/d at an average realized price of $2.28 per Mcf (excluding
third party processing fees); and
· average
net daily crude oil sales volumes were 1,166 bbls/d with an average
realized price of $69.97 per barrel.
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
Scott Budau, Chief Financial
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 percent
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 and drilling data, including the Company's interpretations
thereof; expected drilling and completion
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 2023 Annual
Information Form dated March 20, 2024 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.
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.
Product Type
Disclosures
This announcement includes references
to crude oil, natural gas liquids, natural gas, and average daily
production volumes. Under National
Instrument 51-101 - Standards of
Disclosure for Oil and Gas Activities ("NI 51-101"),
disclosure of production volumes should include segmentation by
product type as defined in the instrument. 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,
all as defined in the instrument.
For information regarding specific
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 months and year ended December 31, 2023
accompanying our December 31, 2023 audited
consolidated financial statements, both of which are available
on our website (www.touchstoneexploration.com)
and under our SEDAR+ profile
(www.sedarplus.ca).
Abbreviations
The following abbreviations are
referenced in this announcement:
bbls/d
barrels per day
boe/d
barrels of oil equivalent per day
Mcf
thousand cubic feet
MMcf/d
million cubic feet per day
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.