Touchstone Exploration Share Discussion Threads

[grannyboy] 13/12/2017 08:37

Yes thanks from me too che7win for all the posts..

[walter walcarpets] 12/12/2017 19:43

Thanks for posting che7win: really like their conservatism (with a small c :-))

[che7win] 12/12/2017 19:18

10% capital budget on exploration, 80% on development.

[che7win] 12/12/2017 19:17

The loan the took was at a difficult time in the market.

The $800k per quarter next year built into their model - but it really very manageable - they as earlier answered will probably look to restructure this.

[che7win] 12/12/2017 19:16

Big energy conference around 22nd January each year in Trinidad - they might take this oppoertunity to make an announcement on royalty - but no one knows.

Tax changes would really put Trinidad on the map - and international oil companies would become very interested - TXP is on the ground and ahead of the game.

[che7win] 12/12/2017 19:13

These 10 wells - generally they come onstream 2 weeks after drilled. If on same pad, sometimes have to wait until 2nd well drilled.

They are cash generating.

The royalty - 100% royalty free 1st year, 50% royalty 2nd year. So great cash flow over 1st 1.5 years.

Idea is to make TXP self funding and free cash flow returned as dividends.

[che7win] 12/12/2017 19:10

They aren't running the business on hope - but on current prices.

[che7win] 12/12/2017 19:09

Oil price - Pauls view a lot of capital put on sidelines through last downturn - so not a lot of new big reserves projects coming on line over next 5 years.

So next 5 years great opp.

Me - no need to post anymore on Pauls view here - this is a personal viewpoint but I agree with what he says on Shale.

[che7win] 12/12/2017 19:07

No hedges, but they are looking at it, they concentrate on low operating costs and a clean balance sheet to lower risk.

They *may* look to lock in some at 50-55 dollars.

[che7win] 12/12/2017 19:05

10 wells - they expect on historic basis 53 bopd - so 500-600 bopd in their model.

But on the last 4 wells, they are averaging ~80 bopd.

Scott takes conservative approach on modelling.

They should get to between 50-80 bopd - so gets above 2000 bopd.

4 of wells are commitment wells, after that they can really move around and pinpoint some interesting locations, some step outs. A lot of opportunities - best they've seen on these next 10 wells.

So ~500 to 800 bopd from next 10 wells.

[che7win] 12/12/2017 18:57

Their fixed costs are about 65%, so they are looking at bringing other assets in, to realise economies of scale - up to 3000-5000 bopd.

They are looking at acquiring other fields - local operatiors/Petrotrin/government opportunites.

Keeping their eyes open - staying onshore.

Exciting deeper exploration opportunities - geophysics being done on this - really exciting.

[che7win] 12/12/2017 18:54

No plans to expand outside Trinidad.

They are well placed, want to be big fish in small pool in Trin, enough unique opportunities in Trinidad.

They can become the largest onshore producer in Trinidad - and therefore the most profitable.

No reason to look elsewhere, keep things tight, government want to encourage production - looking at tax, operations, releasing oil fields.

[che7win] 12/12/2017 18:51

With the assets they have RIGHT NOW, they expect to get to 5000 bopd.

They also see Petrotrin releasing assets and the Crown that would get them to 10,000 bopd.

4-5 new pools not inconceivable.

They have rig that can now go a little bit deeper.

Over next 7 years personal wish list from Paul is to get to 5-10k bopd and paying out a really nice dividend.

[che7win] 12/12/2017 18:48

Existing well decline - they want longer life - but extract as much oil from a well in from year as royalty holiday in first year.

Decline in field is less than their model.

Presently, 300 bopd decline on 1500, so recompletions cover decline.

Deeper zones finding higher initial rates, the declines isn't the issue, they want to capitalise properly and get the right capital programme in place for all the opportunities that exist - they can show off probably first time in their history want they can do in the next couple of months.

[che7win] 12/12/2017 18:43

The covenant ($5m) reduces to $2.5m after certain amount of equity raised or when trailing EBITDA reaches $8m.

So they expect covenant to come down at some point. Principal payments will kick in, they have lots of cash to payback, but they want to look at best use of cash, should they refinance etc, they are also going to look in 2018 as to how to better refinance this on better terms.

[che7win] 12/12/2017 18:33

They are pricing their drill programme on $50-55.

They didn't like issuing the equity, their plan is not to have a lot of shares in issue but they want Short term target 2000 bopd next year and clean balance sheet.

They want to get to 3000-5000 bopd in Trinidad to get the economies of scale.

[che7win] 12/12/2017 18:27

Production increases expectations:

Each recompletion add about 10 bopd - so from 24 should get about 240 barrels - which pick up the decline. New wells add the increase in production.

They would love to do more recompletions, but logistically and equipment in field and identifying and getting all approvals and approvals - this is a comfortable number.

They also want to focus on new drills.

The recompletions ~10 bopd for $35-40k are very economic.

[sleveen] 12/12/2017 18:25

Another well presented webcast.

[che7win] 12/12/2017 18:23

Expecting happy shareholders as stock moves up from current price.

They wanted to make commitments on 10 well drill which is continuous drilling which gives economy of scale whilst drilling contract prices are low.

[che7win] 12/12/2017 18:19

Spudding 1st well January - high degree of confidence.

[che7win] 12/12/2017 18:16

They could be self funding by H2 next year - after 10 well drill.

So cash flow could be self funding 1 well programme after.

[che7win] 12/12/2017 18:13

Nearly £1.4m cash generated last quarter - lower opex, higher netback.

Capex deducts from higher taxes.

$5m cash in quarter, and Letter of credit freed up $1.2m (edit - think this should be $2.1m and Paul mentioned $2.1m in a later answer to a question), then Petrotrin $1.6m receivables because of end of month timing also just after quarter received in cash.

Over 1500 bopd being produced now.

[che7win] 12/12/2017 18:10

Recompletions covers any natural decline here, I reckon this price is 1/3rd of what it should be IMHO.

[che7win] 12/12/2017 17:15

Thanks wheniamfree

[wheniamfree] 12/12/2017 16:56

Yesterday’s webinar