Touchstone Exploration Share Discussion Threads

[captainfatcat] 01/11/2018 11:42

Buffy the well recompletions and infill well drilling stuff might be boring buts its exceptionally low risk and highly profitable way to generate cash!

Consider the economics of the recent Columbus Primera purchase (which I think its still to complete)?

Columbus will be paying TXP roughly $50K per flowing barrel for Primera. TXP production cost is roughly $10k per flowing barrel so they are basically swapping an asset that produces 10bopd for a future 50bopd potentially generating a 500% increase in revenue from the sale of that asset.

[mount teide] 01/11/2018 11:33

Hi Buffy - I look at it this way for 2019 - the well recompletions and one infill well means that the other nine infill wells should potentially be all production upside.

At say an average of 75 bopd, that's an additional 675 bopd on top of what the current 2,015 bops plus 6 further 2018 wells and the two 2018 wells currently in production but yet to contribute from the lower zone add.

The cash flow this 'boring' near 50% production increase this year delivers in 2019 along with the contribution that another 10 infill wells generates at an average of $65-$80 oil, will enable shareholders at the current share-price to gain exposure to the drilling of three ultra high impact onshore exploration prospects next year with offshore potential reserves, at a drill cost at a circa 82.5% discount to the $20m cost for a similar offshore well.

Where else on any equity bourse can you get such low cost, relatively "low risk" exposure to offshore size exploration potential with such huge upside valuation potential for a small cap? - through self funded very low cost wells using modern drilling technology on large, deep prospects that were originally drilled 60-70 years ago and, despite the extremely modest equipment and drilling technology of the day still found and tested successfully for natural gas and oil.

The Ortoire exploration wells also offer the additional prospect and insurance policy as Paul Bay pointed out yesterday, to test the shallow oil zones on the way down, that TXP were originally planning to target before the team identified the huge potential that the deeper zones offered, especially for natural gas, since in the 1950's any discoveries were considered 'worthless' and the wells immediately abandoned as there was no possibility to commercially develop gas discoveries on the island.

It would be another 40 years before the situation changed with the building of a World Class LNG facility to commercially exploit the large number of huge offshore gas discoveries subsequently found off the island after the oil majors following the advancement of drilling technology and development of offshore drilling platforms largely transferred their exploration operations offshore during the 80's and 90's.

[captainfatcat] 01/11/2018 11:23

Thanks crooky

[crooky1967] 01/11/2018 10:49

captainfatcat, they are aiming to publish today according to Twitter

[homebrewruss] 01/11/2018 10:22

Buffy fair point to a degree but how many companies are offering a number of potential 10 bag like chances funded from internal cashflow?

Surely the ortoire prospects are a game changer here while the price is more than underpinned by production.

[buffythebuffoon] 01/11/2018 10:04

Hi MT,

Obviously Ortoire could genuinely be a game changer; but some might view all of the activity that 15-20 well recompletions and an infill well entails just to stand still, is not overly exciting.

Buffy

[mount teide] 01/11/2018 08:51

Some broad brush calculations from the latest presentation and recent news that average production in early October pushed through the 2,000 bopd milestone;

Average field decline rate (over 2ys 9 mths) = 13.9 bls / month

Average production contribution from well recompletion programme since recommencement in Jan 2017 = 12.1 bls / month

Current production contribution from four 2017 wells = 300 bopd / 75 bopd per well

Current production contribution from eight 2018 wells = circa 500 bopd / 62.5 bopd

Assuming the two 2018 wells testing the upper zone(proved uneconomic) are currently producing 20 bopd each until the primary target lower zones are brought into production, it pushes the average of the other 6 primary zone wells up to 77 bopd.


Suggests an annual programme of 15-20 well recompletions together with one new infill well per year should currently be sufficient to offset the overall field decline rate.

[captainfatcat] 01/11/2018 08:45

I thought a recording of yesterdays live feed was going to be made available looking on valuethemarkets where it was hosted I cant see anything available as yet.

[scottishfield] 31/10/2018 20:25

Thanks all, appreciated.

[mount teide] 31/10/2018 20:11

ten - 'interesting to see that they may accelerate Ortoire drilling if the first drill is a success (at the expense of the development programme)'


Since we are targeting offshore size prospects onshore at less than one fifth the drill cost - I for one would have no problem with that!

[che7win] 31/10/2018 19:49

For Ortaire, the first 4 wells Petrotrin carried in, so maybe they keep the best prospects to after these?

[tektonik] 31/10/2018 19:49

Good interview from PB, interesting to see that they may accelerate Ortoire drilling if the first drill is a success (at the expense of the development programme). The board are not interested in any sort of raise and are confident that the company can proceed self-funded

[brasso3] 31/10/2018 19:47

They believe they are undervalued when compared to TRIN and CERP as they are relatively new to the london markets. They also believe they did not have the high impact exploration targets until recently and expect those to get factored into the price in the near term.

[brasso3] 31/10/2018 19:44

All T & T producers will benefit from the Petrotin situation.

[brasso3] 31/10/2018 19:44

They are happy with the loan situation as it is fixed term and only 8% interest. The BoD are not keen to increase debt or raise equity. The slow and steady approach living within their means is preferred.

[brasso3] 31/10/2018 19:43

Based on 10 development wells TXP are targeting 2400 BOPD production. The development campaign may be extended in H2 2019 (same approach as 2018). If they drill more wells then the end of year target will be higher.

[brasso3] 31/10/2018 19:41

No SPT on gas production in T & T. I did not know that! :)

[tektonik] 31/10/2018 19:38

Thanks for asking that question MT - think it was you anyway!

[mount teide] 31/10/2018 19:25

Ortoire - drilling of first two wells will cost $3.5m each, with the deeper third Nat Gas well costing $4.5m

[wanobi] 31/10/2018 10:09

excellent move today, but, there has been a large seller here right?

let see if he's gone today.

Cheers
Wan

[ileeman] 31/10/2018 10:02

Once the news on the additional wells before the end of December comes in I expect shareprice will be well north of all time highs.

Great reversal today on a silly drop, fundamentals only improving.

[che7win] 31/10/2018 07:36

Remember - live company presentation tonight at 7pm:htTp://vtm.clickmeeting.com/touchstone-exploration

[sleveen] 31/10/2018 07:02

Thank you.

Good luck.

[mount teide] 30/10/2018 21:46

sleveen - on taking an initial position in early 2016 i was underwater for nearly a year but continued to add on numerous occasions up to 10p, and now have over 5 million - at an average less than half that of Executive Chairman Tony Manini's average share-option price of circa 7.5p.