Touchstone Exploration Share Discussion Threads

[gabrieloak] 15/3/2019 10:45

Also, stopping drilling a well half way / complete it...what would necessitate that !?

My summary is that Trin has a robust enough balance sheet to be honest about this.

GO

[gabrieloak] 15/3/2019 10:39

Thanks Ross, let us know...if there is a casual $5mln discrimination against just one company then everyone deserves to know this because it says a lot about the backdrop of Trinidad as a place to do business...

[gabrieloak] 15/3/2019 10:30

One way to explain that it might have only affected Trinity is to conclude that Trinity's balance sheet was deemed strong enough by Petrotrin to delay a payment...this means that in the cold light of day TXP's balance sheet was not deemed strong enough. I don't think that this is what happened.

Or, it was unfortunate on TRIN. I don't think that this is what happened.

There is no way that either of these kinds of discrimination would exist...

Furthermore, if you assume that PB thought the issue would be resolved, then he may have felt a $3mln receivables hole was not worth mentioning (with a planned or otherwise capital raise and given weak balance sheet) as it would be sorted quickly...when this panned out as Trinity says later into a longer term issue resolved "through 2019" then the capital raise became imperative and declaring the issue impossible.

The capital raise can be for a future exploratory venture BUT needs to cover the receivable hole until it comes in through 2019...kills two birds with one stone.

If I am right then the timing of the drill might conveniently coincide with when Trin announces it has received its $5 mln.

These messages will self destruct in a week or two as is my way...

;-)

GO

[gabrieloak] 15/3/2019 10:17

MT in your post 4005 you mention me deleting all of my posts from last year...reasons for this are that I got nothing of any value back from having posted my research...and those that I found useful I came to know personally anyway... Pearls and Swine etc

On the subject of research...something for Trinidadian oil holders to examine:

Quoting Trin from their last update: "As previously stated, the Trinidad oil sector is going through rapid transition with the restructuring of the former national oil company, Petrotrin. To that end the new national oil company, Heritage Petroleum Company Limited came into effect on 1 December 2018. Whilst the transition has been relatively seamless in regards to production supply and distribution there has been some delay in the timings of payments from Petrotrin as a result of the restructuring exercise, with the result that receivables have increased by US$5.1 million at the year end. The management of both Petrotrin and Heritage have been in close contact with the Trinity management team and have provided the requisite comfort that all revenues will be received in full during 2019."


This seemed to affect nobody else but TRIN and took out payment for their November production...or was it that TRIN was the only company to be transparent about it?

Quoting TXP: "Effective December 1, 2018, Petrotrin transferred its upstream assets to the newly formed Heritage Petroleum Company Limited. Although the transition impacted sales volumes in the last week of November, the Company has not encountered further sales interruptions to date. From an operations perspective, the transition has been seamless, with only minor delays noted for existing well workover approvals."

“The Company has collected its monthly crude oil sales payments from the recently formed Heritage Petroleum Company Limited in a timely manner pursuant to the transferred marketing agreements.”

Here is the rub...The outstanding receivables to TRINITY are from PETROTRIN for November (NOT Heritage)...with TRIN quoting the generic "Trinidad oil sector", so when TXP quotes that everything is working smoothly with Heritage, it is a probable sleight of hand as the receivables issue is with Petrotrin and not Heritage.

Sales interruptions...or a bit more?

Furthermore, if you consider the production numbers for TXP for November (~1900bopd)and then calculate their potential missing revenue that did not come in (1900*56*30 days=~$3.2mln)...then overlay it against the timing of the TXP (back door / surprise) capital raise and the amount that was raised...does it not leave you wondering if they might have been affected by the same issue as Trinity as part of a generic issue?

This would be an obvious question to Paul Baay: "Dear Paul, Are you owed a sum approaching $3mln as a receivable from Petrotrin before the agreement switch from Petrotrin to Heritage...and yes, we know that all is well with Heritage?"

If the answer is "well, Yes" then you should have some significant concerns about the honesty of TXP management and the financial stability of the company...perhaps this explains the current share price weakness of TXP?

GO

[mount teide] 15/3/2019 10:17

Mentioned Jadestone Energy here before - for those that like value investments with strong growth potential - it could be worth another look following a stunning market update which has added considerable weight to the assertion Zengas and I have been making since the completion of the asset purchase last Autumn - is the Montara oil field the O&G sector acquisition of the decade?

CEO Paul Blakeley, a 41 year veteran of the O&G business reckons its the best asset opportunity he has seen in 25 years.

Key point from his presentation to a II and sophisticated retail investor audience in the City this week:

2019 Free Cash Generation:

* Our average crude oil production is expected to be between 13,500-15,500 bbls/d

* Our average unit production cost is expected to be US$21-24/bbl

At an average $65 oil price for 2019 (They have over 40% of production hedged at $72/bb)

We expect to be able to fully fund:

* Our Capital and other major offshore spending of US$116-131 million

AND STILL HAVE $100 MILLION OF FREE CASH LEFT OVER!

Incredible performance from an acquisition that is forecast to generate circa 95% of that Free Cash and only completed last September for a net cost of $82m!

Suggests a chunky maiden Dividend payment is nailed on for 2019.


AIMHO/DYOR

[walter walcarpets] 15/3/2019 09:19

ditto iLeeman

[ileeman] 15/3/2019 09:11

Amazed how low this is after such an unexpected positive result.

[eggchaser] 15/3/2019 09:00

Lol we recon it's more to do with the posts author! People are wising up to you and your mischievous games Dross!

[mount teide] 15/3/2019 08:01

Production up 65% in 16 months with contribution from the upper zones of three 2018 wells still to come.


From my research notes:
SPT taxes are calculated and remitted on a quarterly basis.
SPT tax is 0% when the weighted average realised price of oil for a given quarter is below $50 per barrel.
The revenue base for the calculation of SPT is 18% of gross revenue less royalties, less 20% investment tax credits for certain allowable capital expenditures incurred in the applicable fiscal quarter.
Source: Touchstone Results Statements

[sleveen] 14/3/2019 15:11

----> 2014 was the last time SPT was amended.

Petroleum Fiscal Incentives 2014
Finance Act No.4, 2014 introduced the following additional incentives to further stimulate exploration and development activities in the sector:

1. Investment Tax Credit

An Investment Tax Credit was introduced with effect from 1.1.2011, under the Supplemental Petroleum Tax regime. This incentive allows companies to claim 20% of the expenditure on development activity for mature fields and enhanced oil recovery projects as a credit against their Supplemental Petroleum Tax Liability. The credit is however only available for use in the financial year in which the expense is incurred and any un-used tax credits cannot be carried forward or backward to another financial year. To ensure continuity of these activities and to increase new investments, Finance Act No.4, 2014 will now allow the un-used tax credits to be carried forward for one year.

2. Capital Allowances

Capital allowance reliefs provide a mechanism that allows for the early recovery of investments. The capital allowances for the upstream energy sector have been simplified and accelerated as follows:

a. Exploration

The existing initial and annual allowances are replaced by a new allowance of 100% of exploration costs to be written off in the year the expenditure is incurred. This incentive will be applicable for the period 2014 to 2017.

b. Development

The granting of a first year allowance of 50 %; a second year allowance of 30% and third year allowance of 20% of expenditure. This will be applicable to both plant and machinery (tangible) and the drilling of wells (intangible) expenses.



c. Workovers and Qualifying Side-tracks

An allowance of 100% of the total costs of work-overs and qualifying side-tracks in the year incurred.

[mount teide] 14/3/2019 13:04

Ross - not from memory - with respect, cut out the middle man - send an email to the company/Paul Baay asking for clarification.

'It is possible that E&Y nevertheless did not consider it significant enough to mention in their guide.'

Would not surprise me - two of the 'big four' gave Madoff's funds clean audit opinions for nearly 20 years when Bernie had been stealing every dime from day one.

Madoff eventually outed himself when he ran out of money, despite hedge fund manager Harry Markopolis sending the SEC reams of evidence over a decade strongly suggesting Madoff was carrying out a huge fraud.

After 5 years of getting nowhere with the SEC, Markopolis challenged them - ask yourself this question he said: if the Madoff Funds monthly 'market trading' records are legit, Madoff is responsible for at least 10% of the daily volume of the New York stock exchange. I challenge you to walk onto the floor of the New York stock exchange like i did and ask the largest broker dealers there how many trades they handle for Madoff? (They ALL told Markopolis they had NEVER handled a single trade for Madoff EVER). Some five years after his challenge to the SEC went unanswered - and the loss of another $25bn of shareholders funds - Madoff confesses to running a Ponzi scheme on National television and stealing every dime of his clients 'investments' from day one!


As Markopolis said , "if you were to ask me to name a single major fraud the big four have uncovered I would not be able to name you one. But, ask me how many they have aided and abetted and we would be here all afternoon! "

[junky monkey] 14/3/2019 12:31

Does drilling a gas well go to credit against the companies total SPT and then not pay SPT afterwards for gas production, or does the SPT credit for drilling costs only apply to oil wells where the procudtion is taxed under the SPT?

[junky monkey] 14/3/2019 12:31

Did anyone notice the decreasing discount to Brent for the sales prices? With the "subsidized" refinery out of the loop, the producers are getting higher prices.

[mount teide] 14/3/2019 11:23

Ross - don't have the link/information to hand - seem to remember it coming up in an Investor Presentation Q&A given by Paul Baay.

Posted details of it on this thread last year and discussed it at the time with a number of TRIN holders.

[mount teide] 14/3/2019 11:23

Ross - don't have the link/information to hand - seem to remember it coming up in an Investor Presentation Q&A given by Paul Baay.

Posted details of it on this thread last year and discussed it at the time with a number of TRIN holders.

[ileeman] 14/3/2019 10:45

GMP note

FLASH:
Very strong production, regular
payments from Heritage, higher realised
price

Current production is 18% higher than we carried, even with 3 wells still to be worked over, and demonstrates the success of the ongoing workover program

Recommendation: BUYrating and £0.25 target price

Touchstone continues to be a value name with steady cash flow as well asmaterial exploration upsideat the Ortoire block



hxxps://gmpsecurities.bluematrix.com/sellside/EmailDocViewer?encrypt=812746f0-d75e-4e84-ab9d-1c14a0e079ab&mime=PDF&co=Gmpsecurities&id=[e-mail]&source=libraryView&htmlToPdf=true

[mount teide] 14/3/2019 10:45

Yes ross - 'the market is not stupid.'

You only have to look at the current TRIN price by comparison to see that !

Apologies - couldn't resist that !