Touchstone Exploration Share Discussion Threads

[mount teide] 06/7/2018 14:04

Granny, 'well taking that all into consideration..so far the oil produced from each of the wells have exceeded managements estimates by nearly 50%+..'


Exactly - and at 100bopd this is twice as much production as the 2014 wells averaged which targeted the slightly shallower plays.

On top of this is the massive impact the increase in the POO has made to revenues from $44 Brent when the drilling campaign commenced in June 2017, to circ $78 today.

The four 2017 wells have collectively averaged 375-400 bopd over the last year - they generate gross revenue today of circa US£11.3m per annum against US$6.4m at the June 2017 price. The budget was set at $55 oil.

[captainfatcat] 06/7/2018 13:46

Seem to recall in one of the recent video presentations Touchstone mention they had configured the design and construction of the surface drill pads to enable drilling of multiple wells from a single location. This would certainly contribute substantially to driving costs down on a per feet bases if consecutive wells can be completed from a single location.

[zengas] 06/7/2018 13:20

On drilling costs it's worth remembering from 1/1/17 to 30/11/17 - Trinity drilled no wells, Colombus 2, Rocky Point and Fram 1 each and Range 2 while Touchstone drilled 4 with a 10 well follow on into 2018.

There's cost savings to be had by booking a greater number of wells over 1 or 2. They had turn key bids for the 1st 5 wells of 2018.

In addition to driving down costs per foot by 41% in 2017, they also shaved 21% of the number of days to drill a well compared to what was being achieved in 2014 - ie totally more efficient and thus cutting the cost.

Also in booking turn-key wells in 2018 they got an additional 14% reduction in quoted cost per foot. They get more value for their dollar this way in booking batches of turn key wells and keeping rigs busy compared to companies prepared to drill a much lower number of wells.

When Trin and the others get round to drilling greater number of wells they may get their costs down.

Bottom line re our drilling costs - turn key = all in = spud to completion/production.

[crooky1967] 06/7/2018 12:58

From an e-mail received from James Shipley a few weeks ago, I assumed figures were CND

The cost of our wells varies somewhat depending on depth and location but, on average, cost between $800,000 and $1,000,000 to drill, case, complete, equip and tie in to our production infrastructure.

[grannyboy] 06/7/2018 11:53

Well, taking that all into consideration..so far the oil produced from each of the wells have exceeded managements estimates by nearly 50%+..

[spangle93] 06/7/2018 11:42

Flyinghorse/rossannan - aye, the message was all about the reduction, not necessarily about defining exactly what it was.

If they were truly interested in sharing drilling performance improvements, they'd show unit time reduction as well, because the cost of rig and service provision globally has fallen considerably over that period. So effectively it's a procurement rather than performance improvement, and if contractors' prices increase with extra demand, so will our well costs.

I'm not going to be 99% sure ever again, after yesterday ;-) .... but, typically if industry talks about drill cost per foot, that would encompass the period from running the first drill bit (spud) to completion of activities to make the well secure (running and cementing the sandface completion). After that point, the drill rig could go elsewhere, and perforation of the well and installation of the upper completion and pump can be done without the expensive drill rig: a cheaper workover unit can run the tubing. In other words there are two discrete phases of activity, and drill cost/ft would relate to all of the first.

[flyinghorse1] 06/7/2018 10:44

Ross,
Its also not clear if it includes initial completion /pump costs but I suspect they are presenting best optics not actual cost of getting a well on to production.
FH

[gymratt] 06/7/2018 09:15

Another small top-up for me, showing as a sell.

[junky monkey] 05/7/2018 21:31

TXP is not a good stock for trading. I can't see the whole order book (what you call L2 I guess) and this makes it quite annoying. Everything else I have (not in canada) I can see the top 5 buys and 5 sells. But still this is nanocap with extremely low volumes so not worth trying to trade. I hope we can get 2500 by the end of the year and then slowly increase this with the normal drilling program and hit a home run with a couple big wells. It looks to be completely doable and a good strategy. Compared to all the big offshore developements I am used to, these rigs and production setups look like something you could build in your garage, and must be dirt cheap to buy and repair. And as Paul says, they pay every month on the 25th. Fantastic!

[otemple3] 05/7/2018 17:06

Thanks MT, sure I won't get anything like what I want but if you don't ask....!Not got L2 so spend my life doing dummy trades!!! Something to think about!

[mount teide] 05/7/2018 16:56

ot - thanks for the opportunity to add a few more.

Of late i've found to buy in decent volume has often required keeping a close eye on L2 combined with using dummy buys to test the maximum availability of stock at any given price point.

Had no trouble buying in volume last summer - it was relatively straightforward to regularly pick up 200,000 slugs at or very close to the bid price.

Hope you get what you want with your TRIN subscription.

[otemple3] 05/7/2018 16:42

Its so illiquid - think I caused the drop as sold 2x batches of 50,000 in my isa at 16.15 and went to sell my final batch (c.44000) and they didn't want them - best quote was 15.51. Bought £20k back in my trading account late afternoon at c. 16p and then eventually got my final batch away just as the market closed! Basically broke even but successfully freed some funds for the trin subscription. I remember struggling to sell last time I held. Must be a real knack to trading in volume here....

[mount teide] 05/7/2018 16:34

Well, have to confess i too took advantage of the pull back today.

As Warren Buffet famously said 'I often buy more shares in companies i already own when i can't find better value elsewhere in the market'.

[junky monkey] 05/7/2018 15:18

Monkey took another bite. Full banana now. Maybe completely bananas! Could be enviromentally friendly and buy a 700 HP Tesla for what I got into this now. But I prefer to wait until this is all finished and use my divendends to buy a not so environmentally friendly helicopter. I think Mr. Paul Baay is going to take us on a wild ride. Will we reach 2500 by the end of the year?

[mount teide] 05/7/2018 14:10

spangle - 'going back and comparing the presentation with the annual and quarterly report, the netbacks shown in the presentation, which you'd think for the same practical reason would be in USD, are in CAD, so maybe the cost/ft is in CAD.'

That is the assumption i used when attempting to calculate the per well cost for the current drilling programme.

[spangle93] 05/7/2018 13:31

Hi Rossannan - going back and comparing the presentation with the annual and quarterly report, the netbacks shown in the presentation, which you'd think for the same practical reason would be in USD, are in CAD, so maybe the cost/ft is in CAD.

If so, they must be only doing it for reporting consistently, cos no-one works in that currency. Sorry, next time I'll not be 99% sure :-(

[spangle93] 05/7/2018 12:44

Ross - if it's an operational metric, I'd be 99% sure it's USD. Costs would be experienced in USD and then translated to CAD for accounting

But in principle it's not certain, because the presentation includes both CAD and USD

[mount teide] 05/7/2018 12:33

Ross - I too this week asked the same question in an email to their info@ address - awaiting a reply.

What is clear though is that there has been hardly any on-shore drilling in T&T since 2014. During 2012 - 2016, in common with the North Sea, a number of small oil rig drilling operators and O&G companies went under in the most severe downturn the industry has faced for decades.

The drilling price reduction achieved by Paul Baay in 2017 and 2018 is consistent with that achieved by O&G companies from the North Sea rig operators.


In 2014 - TXP drilled 12 wells(11.16 net) costing CAN$17.4m = CAN$1.55m each. At an exchange rate at the time of circa CAN$1.80 to GBP that means each well will have cost £0.86m.

TXP say they have negotiated a circa 40% drop in drilling costs since 2014. So they are saying these wells would cost today an average of circa £516K


If we take a 5,000ft well today at CAN$186/ft drilling cost, this equates to a total drill cost of CAN$930k = £537K at today's 1.73 exchange rate. This is very close to the drilling cost figure in the 2014 calculation(adjusted for the 40% negotiated saving), which we KNOW was in Canadian dollars, as the figure is taken from the Year End Financial results.


AIMHO/DYOR

[sleveen] 05/7/2018 11:59

MT


Your expertise in the shipping world is duly noted via the MPL thread.