Touchstone Exploration Share Discussion Threads

[buffythebuffoon] 21/9/2017 14:42

Been doing my own investment research for nigh on 43 years Zengas.

My post was pretty lighthearted. You could have just said you came up with the wrong figure in the original post.

Buffy

[zengas] 21/9/2017 13:49

Not hard, read it relavant to the price/shares in issue and you might find it easier. Dyor.

[buffythebuffoon] 21/9/2017 12:43

The equivalent minimum was 22p when I read it earlier. Now I read its 23.5p.

Hey, this share price appreciation stuff is easy.

Looking forward to rereading the post tomorrow evening.

Buffy

[zengas] 21/9/2017 09:03

Columbus M/Cap £24m @ todays 4.3p (559.5m shares in issue).
11.8 mmbo P2 .
Exploration Opportunities in Goudron deep & S.West Peninsula.
Production target 550 bopd by end 2017 to 900 end H1 2018.
Debt $1.344m end June and cash remaining £1.684m. Plan to drill 10 wells at $500k each = $5m so debt or dilution will rise in line and $750k being advanced this coming quarter from a total funding facility of $8.6m.
Revenue to end June £2.46m (circa $3.2m).
==============================================
Touchstone M/cap £8.9m @ todays 8.625p (103.13m shares in issue).
15.68 mmbo P2.
Exploration upside in Ortorie block with 4 known oil pools.
Current production broke 1500 bopd last month and on target for 2,000 bopd with 4 wells to drill by year end - then onward drilling programme of some 10-20 wells.
Debt end June = $14.7m (from $15m loan) reapayable at $810k/qtr commencing Jan 2019 with principle due in 2021. Cash $9.925m. Decommissioning transparent at $16.17m over next 25 years and $738k paid into govt abandonment fund in June.
Half year revenue to June $14.827m.

On an equal m/cap rating then TXP should have equivalent minimum 23.25p share price never mind greater revenue, production and reserves.

[wheniamfree] 20/9/2017 14:20

Why does it carpadium aren't their production rates lower and less reserves too?

TXP is also one third of the price.

[mount teide] 17/9/2017 22:55

Proactive Investor Interview - Key discussion comments:

Stabilised production from the 4 wells just drilled exceeded all expectations, coming in at close to double the 50 b/d they thought they would do, putting them ahead of where they expected to be with regard to the 2,000 b/d target.

Next four wells drilled will include the last of the commitment wells. Freeing them in 2018 to move around the blocks and be more selective with the drilling campaign.

2017/18 Well Drilling/Workover Plan

2017 - 4 further wells drilled before year end and ongoing programme of 2 well workovers a month

2018 - 10 to 20 new wells drilled and 2 well workovers a month

[carpadium] 16/9/2017 08:25

A well run company BUT, when it comes to future growth prospects in T&T, CERP stands head and shoulders above TXP.

[wheniamfree] 16/9/2017 07:57

Xxxx = p r o a c t I v e I n v e s t o r s

[wheniamfree] 16/9/2017 07:56

Look st the interview also.

[...]

[mount teide] 14/9/2017 12:50

2017 Production Growth:

Q1/2017 - 1,280 b/d +3.0% on Q4/2016
Q2/2017 - 1,335 b/d +7.5%
July 17 - 1,344 b/d +8.3%
Aug 17 - 1,591 b/d +28.2%

Production from the 4 new wells now kicking in strongly as Brent breaks $55 for the first time since early 2017.

[zengas] 14/9/2017 07:45

Now reached 1500 bopd with 1591 hit in August. 4 more wells for drilling being contemplated before year end (given this is now mid September). Company target of 2,000 bopd may come a bit earlier than planned at this rate.

[happyholder123] 09/9/2017 11:37

HNR -
TWO wells successfully drilled with abundant oil and gas in samples extracted!
Fracking and FIRST OIL next month!
Don't miss this train!

[mount teide] 07/9/2017 09:22

Looking at the appalling devastation wreaked by monster Cat 5 hurricane Irma in the Caribbean, it is comforting that Trinidad and TXP's operating assets are well away from the general direction of travel of the most powerful hurricanes that develop offshore in the region.

[bigboots] 07/8/2017 17:52

Been told "dont be short in front of the figures"

[mount teide] 01/8/2017 20:04

Touchstone Exploration - positive start on AIM could cause the share price to rerate - ValueTheMarkets • July 24, 2017

'Since Touchstone Exploration (LSE:TXP) debuted in London just under a month ago its share price has risen 20%. It now trades at 8.75p on the bid (last seen). Touchstone is an oil and gas company, with onshore operations located in Trinidad and Tobago. In its latest quarterly report the company announced oil production had increased to 1,335 barrels per day (“bopd”). As I recently reported, Touchstone’s £7.3million market cap values the company favourably compared to its direct peers on AIM. This implicit undervaluation is encouraging, but improving fundamentals suggest a re-rate could soon be on the cards.

When Touchstone came to AIM it raised £1.45million at 7.25p. The company’s plan is to increase oil production to 2,000bopd by 2018. Its pitch was it would achieve this through development of its low cost reserves (C$7.35 per barrel of 1P reserves and C$6.00 per barrel of 2P reserves) and lean operating model. One of the attractive aspects of Touchstone’s assets in Trinidad and Tobago is they are forecast to have low decline rates, suggesting both longevity of operations and resilience to the persisting low oil price.

For private investors this almost sounded too good to be true. Compared to a lot of the rubbish in the lower reaches of the oil & gas sector on AIM, here is a company presenting a credible operational plan, trading at a modest price. Better yet and the board has been talking up the prospects of dividend payments!

In the words of CEO Paul Baay, “When we set up Touchstone our goal was to create a dividend paying business. We were on our way there until oil turned south a few years ago. Moving forward this is still our plan, but it will largely be a function of where the oil price is. However there are also operational improvement we can make to ensure the business is run as efficiently as possible, including reducing drilling and operating costs.”

This sounds great, but how much is a cynical market likely to believe this story?

Judging by Touchstone’s news flow over the course of its first month on AIM, it seems likely it won’t take long for it to win over more admirers. The company’s Q2 operational report is certainly promising.

During June, Touchstone brought two wells into production on its Coora Block. Well CO-368 produced 111bopd for its first 26 days of production and Well CO-369 produced 151bopd over its first 17 days. These wells obviously had a positive effect on Touchstone’s overall production rate. In the last quarter this rose to the 1,335bopd already quoted and it rose again in the first 17 days of July to 1,455bopd.

As positive as the contribution from Coora has been, Touchstone’s attention is much more focussed on developments in the WD-4 Block. According to Baay, the company “has had the most success at WD-4, which is its largest and deepest producing block. Having not drilled wells for a couple of years because of the price environment, we completed an extensive review of our assets. As a result of this we now want to look for deeper production horizons, which will bring into play new production and new reserves. This is exciting for the island and a cheap way to conduct exploration.”

As the final part of this summer’s four well drill campaign, Touchstone also drilled two wells at WD-4 (PS-598 and PS-599). These have encountered approximately 637 feet of net oil pay and Baay says, “based on performance of other wells at WD-4 we are expecting the two wells to produce at a sustained rate of 100-150bopd.” When asked why the company had not already released initial flow rates Baay replied, “releasing initial flow rates is not our style. The data is extremely unreliable. Our policy is to wait until we have gained a good idea of stable flow rates, before updating the market.”

Assuming PS-598 and PS-599 meet the lower end of Baay’s expectations, by the end of summer Touchstone could be producing about 1,700bopd. This is not far off the target of hitting 2,000bopd by 2018. Looking to the future Baay commented, “our operational goal is to have one rig continuously drilling on the island. This will bring more wells into production and improve the company’s cash flow generation.”

This suggests the company has plans to drill more wells in the second half of the year, not least because of the importance of generating increased cash flow.

Touchstone is going to need this because one area to be mindful of is its debt. On 23 November 2016, Touchstone received a $15million loan from a Canadian investment firm. The interest rate is 8% and principal payments are due from 01 January 2019. The loan matures on 23 November 2021. Touchstone explains this in more detail in its Q1 report, but Baay believes the main point to take home is “that the company’s debt is manageable. The interest rate is reasonable considering market conditions and Touchstone has built into its plan the provision to start making principal repayments in 18 months time, from internally generated cash flow.”

Touchstone’s reported financial performance in the first quarter of the year supports Baay’s belief. Although Touchstone lost C$1.1million, this was down from C$3million the year before. However, Touchstone’s operating profit during the period (including general and administrative expenses) was C$1.3million. Assuming increased production has not led to a significant increase in operational expenditure, this bodes well for Touchstone’s next set of reported figures. These are due out on 11 August.

If Touchstone can demonstrate continued financial improvement as we move further into 2017, expect the market to sit up and take note. The £7.3million market cap could start to look cheap, as investors buy into the business’ potential.'

[bigboots] 30/6/2017 16:39

Which stock post IPO are traded in the UK TXP or TXP/R

Which ticker id the IPO stock ?

TIA

[jungmana] 30/6/2017 11:18

Yes there is some debt, 1300bopd production, a huge cash pile and up to 10 wells to be drilled in next 6 months.

[aimmafia] 30/6/2017 10:43

Is there debt?

[jungmana] 30/6/2017 07:50

Looks like this is off punters radar. Time to be loading here imo. Good summary there keya and I think this too cheap at £9m market cap today.Gla

[dmk1198] 28/6/2017 18:30

I'm in,happy to hold,under radar,plenty upside compared to other operators

[keya5000] 28/6/2017 17:41

Name of share is: Touchstone Exploration
AIM listed High Risk
We are acting as agent in a 7.25p placing. We are charging 5% and £75 admin fee
Settlement date: 26 June
Spread: CAD 17-18 cents (9.5-10.5p) Current market size is: TBC

Reasons to buy:

Touchstone Exploration is an independent oil producer with onshore low risk operations in Trinidad.
They are one of the largest onshore independent oil producers in Trinidad. Touchstone are currently producing 1,280bopd with a plan to increase to 2,000bopd by end of 2018. They are operator of around 78,000 gross acres of exploration and development rights.
They are coming to AIM to increase liquidity and are raising £1.5m to assist with the ramp up of current development plans. Current market cap is CAD$14m (£8m). Post raise will be £9.5m.
There are other UK listed firms operating in Trinidad that provide an easy comparison of valuation. Similar independents in Trinidad are Trinity Production & Exploration (TRIN.L), Range Resources (RRL.L) and LGO (LGO.L). Touchstone trades at a significant discount to these peers:
Market valuation per flowing barrel (Canadian dollars) -
Trinity $34,352
LGO $37,907
Range $63,047
Touchstone $11,538.

Market valuation compared to reserves (Canadian dollars) -
Trinity $4.04 per barrel 2P
Touchstone $0.94 per barrel 2P

Even without the predicted increase in production there is potential for significant re-rating in value just from Touchstone moving to a valuation more in line with its peers.
After a period of cost cutting brought on by a weak oil price environment, the company has announced plans to ramp up activity levels with a capital programme initially comprising 24 well recompletions and four new development wells. Five of the recompletions have already been undertaken so far.
The recompletion work is low risk and the company has an excellent exploration record with a 100% success rate for the 36 wells drilled to date.
Shore Capital expect this work to translate into “healthy production growth” and estimate an average 1,450bopd for FY2017 and 1,700bopd for FY2018. Risked NAV based on this is CAD$0.55 per share – GBP 31p
The proposed raise will add to these numbers. Shore thinks as a result of the additional funds being available the new development well figure will increase from 4 up to 10 by the end of 2017, production will increase to around 2150bopd for FY2018 and profit is expected to be as high as $9m ($20m operating profit) from a previously expected breakeven as per the current research note. Pro-forma figures will be included in an updated research note after the raise is completed.
Touchstone has a strong management team, notably CEO Paul R. Baay who has led TXP since 2010 (increasing production from 135 to 1300bopd). Previously he founded True Energy where he increased production from 350boepd in 2000 to 20,000boepd by 2007. Part of True Energy was sold for $200m in 2012. Paul Baay and Chairman John Wright own 7% of TXP.
The company has a sound balance sheet. In response to the downturn in oil prices the firm reduced G&A expenses by 39% since 2015 (from CAD$10m to $6m) and reduced operating costs per barrel by 19% to around CAD$21 (USD$15.5) over the same period.
The firm has just released Q1 2017 Results on 15th May and the had CAD$13m cash on hand (compared to CAD$8.4m in cash at the end of 2016).
All in all Touchstone Exploration offers increasing production, increasing netback/profitability, a solid management team and a solid balance sheet. The move over to AIM will hopefully lead to a re-rating as they move to a valuation more in line with peers.

[aimmafia] 26/6/2017 16:31

What's the fundamentals here?

[brasso3] 27/5/2017 21:17

Comes to AIM this week I think

[cpap man] 21/4/2017 12:40

Rumours that this might be coming to AIM

If so is it still worth a close look?

Or just passing on?

[dosser2] 31/3/2017 18:18

Just me I think..