Touchstone Exploration Share Discussion Threads

[novicetrade68] 06/9/2018 18:51

Everybody still buying shares under the employee purchase plan, nice to see. Ross, I take it you shall be writing your placing musings on here for months to come? For what purpose exactly?

[crooky1967] 06/9/2018 10:27

rossannan

Lot of factors involved. Ortoire drilling not starting until Mid 2019. Where will oil prices and production be by then? Will they be generating enough cash to drill Ortoire without a placing? We just do not know. They could do a placing they may not and they may even get a farm in if the spoils in Ortoire could be that good.

[sleveen] 06/9/2018 09:28

ross re2810

Agreed.

[mount teide] 06/9/2018 00:16

Spangle - in 2004 BG paid Canadian $228 million (US$171 million)for Aventura's 65% participating interest in, and operatorship of, the 111 square kilometre, onshore Central Block exploration licence - the estimated proved and probable reserves in the licence were 0.5 trillion cubic feet.

Other discoveries in the Central Block include the Corosan-1 well, which, in late-2001, tested at 8.2 mmscfd, and the Baraka-1 well, which, in July 2003, tested at 22 mmscfd and 660 bcpd.

[spangle93] 06/9/2018 00:05

Euclid5 - I think the focus of the presentation was on the Herrera Fm. Of the four "prospects" introduced in slide 17, three are Herrera but Ortoire East is the more commonly exploited Cruse/Gros Morne, so I assumed that this is the one not mentioned with a specific slide. OL-4 shown on 22-23 focuses on the intersected Herrera.

I took "chance of success" to be the ratio of risked and unrisked. Like, we think the most likely case is 121 bcf in Corotan West, but there's only a 1 in 4 chance that it's a discovery so the risked GIIP is 30 bcf. Maybe this isn't what they meant, that's why it would be good to have the audio?

I would imagine it's too early to discuss recovery factors, given the limited data that they have. If you worked with 20% for oil and 50% gas on straight pressure depletion, you'd probably be conservative to realistic. Until we/they know reservoir properties (e.g. connectivity, NTG, potential cementation) it's pure speculation

I'm sure Carapal Ridge reserves details must be somewhere on the web (GIIP is about 1 Tcf), but I haven't been able to find them this evening. Maybe there's a CPR for Aventura that excited BG to buy the company?

But there's a lovely note that says
"In 2000, Carapal Ridge, a structure within the Central Block, became the largest onshore discovery made in Trinidad and Tobago in the last 40 years when it tested at 62 million standard cubic feet of gas per day (mmscfd) and 1,625 barrels of condensate per day (bcpd). The discovery well is on an extended production test with approximately 20 mmscfd and about 500 bcpd being sold to Petrotrin."

That would be a nice add

[euclid5] 05/9/2018 20:27

shame they didn't give the CoS% for the wells in Ortoire West

[euclid5] 05/9/2018 20:18

Do they give the Recovery factor % for the Balata West 70mmbbls? - quite high figures here

[mount teide] 05/9/2018 19:51

Ortoire Block (80% WI) Exploration Prospects - the independent exploration locations has grown from 5 in June to 6 in early August, and now to 9 in September - defined by four general prospects:

Corosan (Gas) - 3 wells - Herrera FM - est. TD 8,000 - 11,000’
Ortoire West (Oil) - 2 wells - Herrera FM - est. TD 11,500’
Ortoire Central (Gas) - 2 wells - Herrera FM - est. TD 11,500’ – 12,500’
Ortoire East (Oil) - 2 wells - Cruse/Gros Morne FM - TD 5,000’ – 6,000’


In the event of drilling success the valuation potential of many of the prospects is extraordinary:

Balata West South fault block Est. 601’ net oil sand thickness
Fault block - 628 acres
Estimated volumetric oil in place: 70 MMbbls (risked), 281 MMbbls (unrisked)

Central North Seismic Anomaly Est. 720’ net hydrocarbon thickness
Anomaly is - 740 acres
Estimated volumetric gas in place: 240 bcf (risked), 960 bcf (unrisked)

[sleveen] 05/9/2018 17:37

Without doubt the prospects are good for TXP.

However the "capital diversity" slide says to me a placing is on the way.

GLA.

[mr. t] 05/9/2018 09:20

Spangle, thank you for sharing your analysis - I appreciate it.

[mount teide] 05/9/2018 07:51

The super-bear analysts at Barclays Bank throw in the towel and lift their average Brent price forecast by $25, saying in a new oil market report they expect oil prices to be consistently higher over the next few years than previously thought.


Say Goodbye to Cheap Oil......for now - OilPrice.com today


'Oil prices will be much higher over the next few years than previously thought, according to a new report from Barclays.

The investment bank significantly raised its pricing forecast for 2020 and 2025 in its annual medium-term oil report. Barclays expects Brent to average $75 per barrel in 2020, up from a previous estimate of $55, while prices may average $80 in 2025, up from $70 previously.

The bank noted that the market is dramatically different than it was at this point last year when it issued its previous medium-term report. U.S. shale drillers are maintaining capital discipline, which could lead to lower than expected production levels. OPEC and Russia have demonstrated resolve and laid the groundwork for long-term market management, which could keep supply off the market for years to come.

Also, the U.S. has deployed an aggressive sanctions campaign against Iran and even Venezuela, measures that should translate into more than a million barrels of per day of supply losses. And finally, “several key OPEC producers are at risk of being failed states,” Barclays concluded....

..One interesting conclusion from the report is that Barclays does not expect a boom-bust phenomenon to characterize the oil market over the coming decade, despite such a historic tendency. Short-cycle U.S. shale supply, steady demand growth, and other global supplies should keep oil prices stuck within a $15-per-barrel range. “Of course, a perfect storm of bullish factors would move prices in excess of $100/b if disruptions worsen, economic growth stays resilient, and Permian bottlenecks are not resolved,” Barclays cautions. “Yet we do not see such a price level as sustainable given government stockpiles, a more tenuous economic outlook, and Saudi Arabia and Russia’s stated willingness to keep prices rangebound by raising output.”

Barclays expects the adoption of electric vehicles to continue to scale up, reaching a cumulative 55 million units by 2025, which erases about 1 million barrels per day of oil demand. Gasoline demand could peak by 2030, the bank says.

Astute readers would note that while Barclays expects oil prices to average $80 per barrel in 2025, Brent is flirting with that price level right now in September 2018. The supply losses from Iran, unfolding faster than expected, have complicated the supply picture for the rest of 2018. Brent has gained nearly $9 per barrel since mid-August.'

[captainfatcat] 05/9/2018 07:06

Spangle thanks for the pointers on the new presentation.

[spangle93] 05/9/2018 01:39

It will be interesting to see the next video presentation, cos on some of the slides there is notation without an obvious reference, so the explanation will be more revealing than just the slides themselves

[mount teide] 05/9/2018 01:29

Thanks for your thoughts Spangle - Exciting times indeed.

[spangle93] 04/9/2018 23:37

Thanks Crooky

Apart from the interesting new material on Ortoire, differences to previous month (2Q) presentation are

Slide 4 - one extra person in Trinidad (!)
also capital diversity section now shows that each raise has been at a higher share price than the previous one, i.e. raising money through equity isn't necessarily a bad thing for shareholders if it can be used to generate value

Slide 9 - now includes number of development drilling locations and exploration prospects (standing at 4)

Slide 11 and slide 12 - one more WD-8 well completed

Slide 13 - is actually older than the 2Q pres - only shows up to May whereas 2Q pres goes 2 months further. Probably chose one from an older slide deck (an ex-colleague used to say this, I apologise for being welded to the 1980s)

Slide 24 - Re-ordered to focus on scaleable economic growth (and again, the explo prospects stated as 4 vs. 5 previously).
[Ross I'm sure you'll dwell on the downgrade ;-) but just think, less capital to find for exploration = less chance of a raising]. Actually as slide 17, they aren't actually prospects in the defined sense of the word, but rather, 4 prospective areas containing several prospects.


As for Ortoire, some good new insights
Slide 14 - not sure if that photo is meant to be Trinidad, but beds are tilted pretty much through 90 degrees. Nonetheless, the seismic on 19 and 20 shows a really complex picture, so those old wells are lifesavers in terms of giving confidence.

The other thing is that most of the prospects where volumes are quoted are all rated at around a 1 to 4 ratio of risked vs unrisked. So, by no means a slam-dunk, but certainly a better exploration bet than many, and some paradigm-shifting numbers if discoveries kick in. Imagine what 281 MMbbl or a Tcf of gas would do for the share price if is were proven with a well!! :-) Note - this is the expected size if the prospect delivers, NOT the 3P size which fixates some punters and which even with a discovery only has a 1 in 10 or 1 in 7 (depending on 3P definition).

In terms of risk, my punt is that it's skewed towards risk of no trap, given the limited seismic quality compared to the complexities of the deformed Herrera, with a minor risk of reservoir sand quality - it doesn't look like they have any cores from old wells to cross match against the logs. Clearly there is an active hydrocarbon charge

The well depths aren't huge at Corosan, BUT they will I'm sure need contingency against drilling challenges. I can't see any contractor wanting a turnkey contract, plus there might need to be geological sidetracks if the targets aren't in the cartesian space expected. Other prospects are down to potentially 11,500ft. Nearer the time, if they give an indicative well duration, please don't go all MATD BB and start counting the days for a rank exploration well. It'll take what it takes.

Exciting times

[mount teide] 04/9/2018 21:31

thanks Crooky - New presentation has tremendously detailed technical information and historical data on the Ortoire prospects - to say the potential looks transformational would be an understatement.

[captainfatcat] 04/9/2018 21:12

Thanks for the heads up on the presentation

[crooky1967] 04/9/2018 21:01

New corporate presentation on the Touchstone website. Gives a lot more info on Ortoire.