Touchstone Exploration Share Discussion Threads

[lazarus2010] 24/3/2016 16:04

had it confirmed by TXP that the escrow cash will be in addition to the above eoy accounts, couldn't be included as the deal had not been terminated at the time (although I don't know why they couldn't have added a post year end note)

[lazarus2010] 24/3/2016 15:02

2015 Annual Highlights

Achieved average oil sales of 1,756 barrels per day ("bbls/d"), 1,600 bbls/d produced in Trinidad and 156 bbls/d produced in Canada. Trinidad production increased 40% from the prior year while Canadian production decreased 61% from 2014.
Realized Trinidad operating netbacks of $16,272,000 ($27.88 per barrel) which offset Canadian operating netback losses of $1,475,000 ($25.88 per barrel). Company operating netbacks were $14,797,000 or $23.09 per barrel, which represented a decrease of 2% from the prior year.
Reduced annual per barrel operating expenses by 16% or $4.85 per barrel from 2014. Trinidad operating costs reduced by approximately US$4.97 per barrel or 22% from the previous year.
Generated positive corporate funds flow from operations of $2,908,000 ($0.04 per basic share) compared to $390,000 ($0.01 per basic share) in 2014. Trinidad operations generated funds flow from operations of $7,157,000, offsetting Canadian funds flow losses of $4,249,000 recognized in 2015.
Recorded a net loss of $22,147,000 ($0.27 per basic share), which was primarily driven by non-cash property and equipment impairment charges mainly associated with the decrease in forward commodity prices.
Reduced net debt by $7,913,000 from the prior year, as the Company exited 2015 with a net surplus of $987,000.
Entered into various ICE Brent referenced financial swaps for 800 bbls/d at an average price of US$63.25 for the 2016 year.
Released an updated independently evaluated reserves assessment prepared by GLJ Petroleum Consultants Ltd. with proved plus probable reserves growth of 5% over 2014, increasing to 15,465 Mbbls and achieving a 219% reserve replacement ratio with total 2015 gross reserve additions of 679 Mbbls.
Achieved Trinidad based proved plus probable reserves finding and development costs of $5.83 per barrel including future development capital.
Disposed of various non-core Canadian assets for combined cash proceeds of $8,500,000.
On February 1, 2016, disposed of the Kerrobert property and various undeveloped land rights for cash proceeds of $650,000. Through the disposition, the Company immediately eliminated operating losses and transferred its estimated Canadian discounted decommissioning liability balance of $4,028,000 to the purchaser effective December 31, 2015.

[lazarus2010] 24/3/2016 14:48

from LGO...I would expect this to apply to TXP although I haven't seen any mention of it.
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LGO Energy plc (LSE AIM: LGO) today confirms that it has been notified by the Petroleum Company of Trinidad and Tobago Limited ("Petrotrin") that overriding royalty rate reductions for the Company's production at the Goudron Field in Trinidad have been approved and these reductions come in to effect from 16 March 2016 and will apply to sales made from 1 February 2016 forward.

The new royalty rates, which apply to production at oil prices below US$50 per barrel, will see the royalty rate on the majority of barrels produced reduced by over 40% to rates below 10%. This will have a net revenue benefit at current oil prices and production levels of approximately 10% to Goudron E&P Limited ("GEPL"), LGO's wholly owned Trinidadian subsidiary which operates the Goudron Field. That impact will increase at higher production levels. GEPL is committed to increasing production from the field and will look to reinvest the savings in additional well work.
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Did anybody notice the 2015 results have been published? Company has eliminated all Canadian loss making operations and has good hedges in place for 2016 (although I'm not sure how long these last, didn't read all the results document just yet)

[jamesiebabie] 14/3/2016 07:54

Carp - I saw that; I think TXP maybe happy with the outcome; the last thing TXP needed was debt at this time. I still believe the O&G companies are under tremendous strain and as inventories build I can see a retest of $27 WTI.

I note that even with oil rallying, the prices at the pump have stayed static, that is unusual imo and must be due to inventories.

[carpadium] 14/3/2016 07:47

Disposal Update, Trinity news 14/3.

On 21 October 2015, Trinity announced that it entered into an agreement (the "Touchstone SPA") to sell its interests in the WD-2, WD-5/6, WD-13, WD-14 and FZ-2 licenses and related fixed assets (the "Blocks") to Touchstone Exploration Inc. ("Touchstone") for a cash consideration of US$20.8 million. This sale was subject to various conditions precedent, however by the back stop date, one of these remains outstanding.

The Touchstone SPA relating to this disposal had a backstop date of 13 March 2016 and this has now expired without all of the required consents having been received, entitling either party to terminate the Touchstone SPA. The Group has now sent a termination notice in respect of the Touchstone SPA to Touchstone.

As a result, the sale of the Blocks to Touchstone will not complete and the deposit of US$2.08 million, currently held in escrow, is expected to be released to Touchstone under the terms of the Touchstone SPA and a related escrow agreement.

[jamesiebabie] 09/3/2016 17:23

FYI - I'm going to trim the header details as I don't have time to update it.

I'll leave the news, charts and links to the company, etc.

Having a whale of a time with my other stocks which keeps me smiling. I've even had some baggers in the last few months; I can't believe it when things on a personal level aren't quite what they used to be; I'd rather have the family fit!

[jamesiebabie] 09/3/2016 17:19

So they must have received the cash to complete the deal?

[carpadium] 09/3/2016 17:09

Credit facility update plus reserves evaluation now on website.

Interesting condition from their bankers...

e. The Waiver also requires that the Company prepay an
amount equal to the refund of all or any portion of the US$2,080,000 deposit paid under the previously announced Trinidad asset acquisition should the transaction fail to close.

[lazarus2010] 08/3/2016 13:29

where to see the actual trades on tsx?

[carpadium] 07/3/2016 18:44

No adverse news (unless leaked & unofficial), no volume, such a sizeable re-trace doesn't make sense, at least yet.

[lazarus2010] 07/3/2016 17:54

can't believe that oil is up 5% and we're down 24% ffs!! Was looking frward to a good rise today ;-(

[carpadium] 04/3/2016 21:00

T&T energy tax review article

[lazarus2010] 04/3/2016 19:18

price now 0.24/0.27

normally a tighter spread so I guess you could sell above 0.24

Still awaiting the Trin acquisition news, I wonder how the market will react to it when it clses

[carpadium] 04/3/2016 19:04

Wow, we're flying, and only two UK investors Laz, thee and me!!

[lazarus2010] 04/3/2016 18:02

price up a tad again with a lot more volume today 100k shares traded so far

[lazarus2010] 03/3/2016 16:48

price still creeping up, still not enough!

Still waiting to hear the news on the Trin acquisition, hopefully the oil price can hold and we can benefit from some huge economies of scale and reduction in opex costs per bbl. I wonder if we have become responsible for the asset already or only after the deal is finalised? Anybody have any opinion? Looking at the EME asset sale, the buyer took responsibility for all costs and income from Oct 1st 2015 even though the deal wasn't completed until Feb 2016. I hope it's not the same for Trin as that would mean we are responsible for all the oil production when wti hit $26!

[carpadium] 01/3/2016 17:11

Cheers Laz. As you say, looking fractionally better with Brent currently at 37,
share price climbing slowly and pound to CND a dizzy 0.535!

Whether the share price would fall or rise on news of a deal withdrawal, I wouldn't like to say.

[lazarus2010] 01/3/2016 07:33

ps I see the share price is back up to C$0.18 albeit on low volume. Also the C$ has been strengthening of late and the £ weakening against the $ and Euro.

[lazarus2010] 01/3/2016 07:30

Carp, I've been looking for the news of the acquisition every day, and I've also been in discussion with a James Shipka ( [e-mail] ) from TXP prior to and during the immediate aftermath of the announcement re the Trin deal. Since the oil price crashed even further and down to $26 I have emailed him to ask when there will be an announcement over the deal. He replied that they will be issuing something in the very near future...well that was on 18.01!!

I have also previously commented to him that imho the price they agreed was way over the top and they could have gotten a better deal...and that was before oil went sub $30.

I guess at these oil prices the key to the deal is whether it can make the whole operation profitable, however I don't see there being enough profit per bbl to repay the costs of acquisition, and they're currently trying to find a way to exit the transaction, or just waiting and delaying hoping that oil prices will recover by the time they sign and take over the asset.

Good to see that WTI has climbed c. $8 from the $26 low, currently at $34.20 which makes things a lot better than before, if still not very good from an oil investment pov.

[carpadium] 19/2/2016 08:45

Wonder whether Trin acquisition will go ahead or the US$2.08m non-refundable deposit paid will be written off. Originally this deal was expected to close by Jan '16, later amended to first quarter '16.
If TXP requires $68 for Brent, before it makes sense to drill, I would guess they're having second thoughts, but ...

[lazarus2010] 15/2/2016 17:31

CALGARY, ALBERTA--(Marketwired - Feb. 15, 2016) - Touchstone Exploration Inc. ("Touchstone" or the "Company") (TSX:TXP) announces an operations update and an update regarding its credit facility covenants.

Operations Update

Touchstone entered 2016 with a continued focus on reducing operating costs. The Company has been working with local service providers and suppliers to ensure that all facets of field operations are priced to reflect current commodity prices. During this process the Company continues to take a measured approach to production optimization and has elected to defer uneconomic production until commodity prices improve. Throughout 2015, the Company reduced field operating costs in Trinidad by approximately 20% on a US$ per barrel basis.

The Company has commenced a two well fracture stimulation program aimed at improving reservoir connectivity and reducing formation sand inflow. The program targets well bore damage associated with drilling fluid contamination and swelling clays, as well as controlling sand and fines production. Touchstone has elected to evaluate the technical and productivity potential of fracture stimulations during the current low commodity price environment to enhance production and take advantage of competitively priced idle services. If successful, the Company may increase fracture stimulation activities in 2016.

Operations have commenced on the first well of the program. Sunty 2 was drilled in 2012 to an approximate total depth of 4,600 feet. The well has recovered approximately 13,800 barrels of 25° API oil to date and was recently producing an average of 8 barrels per day, down from an initial production rate of 76 barrels per day. The program will use 9.4 tons of proppant to be displaced into a 12 foot thick Herrera sand interval, with the final 4.5 tons using resin coated sand to limit formation sand migration following operations. FZ-304 is the second well in the program, which is located on the Company's Fyzabad property. The well was drilled in 2014 to a total depth of 1,805 feet in the Upper Cruse formation. The well has recovered approximately 15,800 barrels of 19° API oil to date and was most recently producing an average of 12 barrels per day. The program calls for 25 tons of proppant to be placed in the reservoir with a tailing of resin coated sand.

The Company has also focused on evaluating the potential benefits of a water disposal project to enhance production operations and potentially increase future oil recovery. In the fourth quarter of 2015, Touchstone was successful in conducting a water injectivity test on its Fyzabad property, confirming the ability to re-inject large volumes of produced water into depleted portions of the Upper Cruse reservoir. The results demonstrated that 1,500 barrels of produced water per day could be reinjected into the test well at less than 500 pounds per square inch. The Company intends to initially use the well to dispose of produced water from the Fyzabad sales facility and in the future will continue to evaluate the potential of a full property water flood program.

As previously disclosed, Touchstone has disposed of all of the Company's Canadian operations and is continuing to evaluate monetizing its remaining non-core Saskatchewan based undeveloped land. With the completion of the Kerrobert disposition, the Company has no future well or facility abandonment liabilities in Canada.

Credit Facility Covenants

The Company was in breach of the January 2016 monthly production volume covenant as Trinidad segment average oil production was 1,377 barrels per day versus the covenant of 1,600 barrels per day. Touchstone and its lender expect to execute a waiver regarding this breach in February 2016. As previously disclosed, the Company remains in discussions with its lender to revise the credit facility production covenants. Each breach of the covenant does give rise to the lender's ability to demand repayment of the loan prior to the end of the original loan term or to negotiate revisions to covenants. The practice to date of curing these breaches through waivers indicates that the implications of this covenant compliance issue to the Company's liquidity risk is currently not material. However, no assurance can be given that future ongoing breaches of the production covenant will not result in a material adverse impact to the Company's liquidity position or cash flows. The Company will provide a further update as any material developments occur in respect of these ongoing discussions with the lender.

[jamesiebabie] 02/2/2016 20:03

The other reason for buying physical gold and silver is to protect you and your family from negative interest rates; they are a store of wealth.

[lazarus2010] 26/1/2016 14:58

Carp, thanks for posting that. Good to see the focus purely on T&T now. Next news is the Trin purchase, which hopefully won't go through. I think at the moment I would rather see them lose C$2mln than proceed with the acquisition. The only caveat is if the cost savings from doubling production and keeping opex almost level can make the asset return cash even at these prices.

Must say I am somewhat surprised that the T&T government have not taken a leaf out of Argentina's book and set a minimum oil price for T&T production. If they did it at say $49.95 (just below the $50 tax threshold) for 12 months and got producers to agree that even if WTI went above this price they could still only receive $49.95/bbl, I think most of them would agree to the deal. It would protect T&T's oil producers without having much of an impact on the economy, in fact with the additional jobs it might bring due to investment in exploration and production, it could have a benefit to their economy.