Touchstone Exploration Share Discussion Threads

[lord gnome] 16/8/2018 10:36

So it was your 564 shares sold that took the price down this morning, eh Rossannan? You moved the market!

[mount teide] 16/8/2018 10:25

Ross - as i said before, from ongoing monitoring of the historic performance of the well recompletion programme i don't accept that the 2017/18 production development wells are not fully incremental up to circa 2,000 bopd - the production data in the August 2018 Investor Presentation supports this view.

[king suarez] 16/8/2018 09:38

Interesting posts re: the recompletions, thanks guys.

Do we know (or is it easy to work out) roughly what the recmompletion cost is per well?

Looking at the interim results (Note 14) I see mention of the minimum work obligation to perform 18 well recompletions prior to end 2021 - as at 30 June 2018 13 had recompletions had been completed - so a further 5 more required to fulfill this commitment.

There is $3m listed for 'operating agreements' for the remainder of 2018 to end 2020 - does that suggest $3m cost to perform 5 more recompletions i.e $0.6m per well for a marginal increase of c9 bpd or do we think this $3m figure includes other drilling?

There is $14m earmarked for 'exploration agreements' so assumed this includes new drills only?

Any insight grateful.

Thanks

[mount teide] 16/8/2018 07:56

From the field production data in the latest presentation, the decline rate across the fields of the 'base' production over the last 31 months is 12% per annum (the four 2017 wells are currently declining at a much slower rate to date.)

Projecting this data forward:

At 1,800 bopd - 24 recompilations at circa 9 bopd average annual performance should continue to offset the field decline.

At 2,400 bopd - an annual programme of 24 recompletions and one new well at 75 bopd would be required

At 3,000 bopd, - an annual programme of 24 recompletions and two new wells at 75 bopd would be required.

Suggesting that to move from today at circa 1,820 bopd to 3,000 bopd by the end of next year would require a 2019 programme of 24 well recompletions and 1-2 new wells to offset historic field decline averaging 12%.

So, if TXP drilled 15 new production development wells next year that averaged 75 bopd - 13-14 of these would deliver combined incremental production of circa 13.5 x 75 = 1,102 bopd, over and above what TXP exits 2018.

Suggesting, that a 3,000 bopd - 3,250 bopd 2019 year end target is probably both realistic and achievable on a programme of 15 new wells and 24 recompletions next year.


I understand the RRDSL rig that TXP has contracted to drill wells in Q4/2018 is capable of drilling the 10,000ft Ortoire wells - so this will be a good opportunity to monitor its performance in the field with next year in mind.


AIMHO/DYOR

[mount teide] 15/8/2018 22:58

In the latest presentation - page 11 / Average Daily Production - from Jan 2017, 'base' production(less all new wells drilled in 2017/18) has dropped by 260 bopd from circa 1200 bopd to 940 bopd over the last 19 months.

During this period 29 recompletions( an average of 18 per year) have added a total of circa 260 bopd.

This suggests the 2018 programme of up to 24 recompletions should be more than sufficient to continue offsetting historic field decline.

[fardels bear] 15/8/2018 16:15

More likely gone out to get a new mask and brace of pistols.

[zengas] 15/8/2018 12:48

Maybe rummaging down the back of the Sofa again Fardel ?

[fardels bear] 15/8/2018 12:34

Ain't he gone quiet?

[fardels bear] 15/8/2018 09:36

They go down tiddly down downThey go up tiddly up up..

[deltrotter] 15/8/2018 09:28

Tend to agree che7win. There has been some hefty buying in 25-50k blocks since mid afternoon yesterday.

Stock looks to be in tight supply to me so there is a chance we will see new highs over the coming days....

[che7win] 15/8/2018 08:35

As I said yesterday, the market called this the wrong way, I think we should be hitting new highs on the back of an accelerated growth trajectory (38% growth in last year).And Paul reiterated 2000 bopd in next two weeks.What a steal at current prices, surely closer to 30p is fair value right now IMHO.

[mr. t] 15/8/2018 08:28

ross, I've described before how the planned capex should be delivered within operating cashflow. The four drills announced yesterday changes things slightly - more capex this year and then more cash flow next year.

And, in case I'm too optimistic on drill costs (which I probably am), there's $10m cash on the balance sheet plus headroom to raise $10m+ in debt if required.

[spangle93] 15/8/2018 08:23

PS, Ross -
in the Aug 9 update, they note that they've identified 6 Ortoire prospects.
In the presentation that came out with the results, they say 5
And in the video clip last night, Paul Baay says 4 (2 gas, 2 oil)

So with the current rate of decline, there'll be no prospects left by early next week

[spangle93] 15/8/2018 08:18

P.S. The presentation on the website has been updated with the 2Q results

[spangle93] 15/8/2018 08:13

Just got through the 60-odd posts from yesterday, or what seemed at times like 2 posts repeated 30 times ;-)

Seems to me simplistically that ultimately, the company will have to address the debt. Clearly we don't know what the global lending conditions will be at the time, but if you're generating growing production and cash flow, the risk to the lender is lower, and hopefully any new terms will therefore be better than those that could be achieved when the original loan was taken out. The main conventional alternative as Esmerelda noted was to raise $15MM, which if done at today's price would be a sizeable number of new shares.

Based on the size of prospects in Ortoire, if any of the wells intersects a target of 100MMboe, gas or oil, then this company's share price will not be near 18p, so any such dilution requires far fewer shares.

The issue therefore seems to be about whether the company, as the CEO states on the video clip, will drill the 2018 program and Ortoire from cash flow and existing capex, with the implication that no extra funds are needed, or whether an interim raise will be conducted.


Mr T - great posts, thank you. ref point 4, operating costs comprise fixed costs, and variable (unit based) cost. If you increase production, the variable costs will rise. But overall, opex per bbl was C$0.70 lower.