Touchstone Exploration Share Discussion Threads

[grannyboy] 03/5/2018 13:56

Well there was similar concerns at trin, which a lot there thought the debt was holding the share price back.. But the share price has started to rerate quite markedly..

[zengas] 03/5/2018 13:52

Personally speaking it's failing to see the wood for the trees. Here's hoping for a decent update on the 4 wells.

[zengas] 03/5/2018 13:37

They don't start doing anything with the loan until the start of next year so imo i think the suggestion that the loan is the issue is the entirely wrong focus and missing the point. It's payable at $810k/qtr from Jan 1 2019. At the end of the term under that payment schedule there should roughly be $11.5m to pay at 31/10/21. So don't expect much change on the loan issue for three and a half years imo. It's about production/reserves growth.

Since the loan was made to the company, they have upped production close to 50% with another 4 well results shortly to be announced and then the ongoing drilling campaign.

In addition to this, the oil price has also risen substantially compared to what was previously factored in - so an obvious bonus while that continues.

If there is roughly $11.5m to pay come October 2021 they may simply refinance from a better position. They could easily have 2-3 times production and further reserves by then even if the oil price was lower.

In addition to this CERP have said they intend to buy the 11 bopd/56k reserves in Icacos for $500k payable in 2 years which would take the loan down to $11m. TXP have 5 similar non core properties to this, so perhaps could bring in further funds.

I think people think debt yet miss the huge disparity in valuations to CERP at £36m (5.5p) and Trinity at £72m (25.5p). TXP m/cap £17m (13.5p).

In the header above all that's changed operationally from then is that CERP are still on 503 bopd for all of Q1 2018 and Trin on 2720 bopd. TXP have upped reserves by a net 20% and production by almost 20% in the same period.

[phowdo] 03/5/2018 12:37

Debt not a problem as long as oil-price doesnt collapse and the drilling program is accretive to both reserves and production (rather than drilling to stand still).
Confirmation of that progress will undoubtedly help the shareprice.

[che7win] 03/5/2018 12:29

Chart looks ready to break out anytime here, so I added more.

[flyinghorse1] 03/5/2018 10:19

The key question ( imho) is the net debt going down quarter on quarter, as investment of borrowed money is high and is that delivering the rewards in production. This is whats stopping the cork from popping.

The term loan note is expensive:
The Term Loan matures 60 months from the closing date with no mandatory repayment of principal until 24 months. The Term Loan bears a fixed interest rate of 8% per annum, compounded and payable quarterly in arrears from January 1, 2017. The Term Loan also grants Crown a 1% gross overriding royalty on petroleum sales (the “Royalty”;) from current Company land holdings in Trinidad during the loan term. By way of illustration, the estimated Royalty that would have been payable with respect to the three-month period ending September 30, 2016 is approximately $61,700. The Term Loan and the Company’s obligations in respect of the Royalty will be principally secured by fixed and floating security interests over all present and after acquired assets of the Company and its subsidiaries. The Term Loan contains quarterly financial covenants, including the maintenance of a maximum net debt to earnings (before interest, taxes, and non-cash items) ratio, minimum earnings (before interest, taxes, and non-cash items), a maximum net funded debt to shareholders’ equity ratio, and an initial minimum cash reserve balance. In addition, Touchstone has the ability to prepay the Term Loan after 18 months and has the option to buy out all of the future Royalty obligations if the Term Loan balance is prepaid in full.

[grannyboy] 03/5/2018 09:36

Well most of us can see the potential...and the under valuation at this time, and Yes agree patience will be rewarded..as in the case of trin, who languished previously before the start of their stellar recent rise..

[grannyboy] 03/5/2018 08:25

What's happened to TXP share price rise mirroring TRIN's????...The MM's arn't following the plan and need to get up to speed!!!!..;)))

[buffythebuffoon] 30/4/2018 14:11

You are both saying the same thing in different ways.

Debt is correct, and the net debt of $8.192m is correct.

Buffy

[grannyboy] 30/4/2018 11:55

Offerman where do you get 22m debt??

Net debt is put at just over $8million...they had nearly $14million in cash at end of 2017...

[offerman] 30/4/2018 11:19

Just had quick glimpse and 22m debt ....

[offerman] 30/4/2018 11:18

Hi ZengasBlast from the past. Hope alls well with you and continued successes. I'll be looking in to these a little more as funds upcoming soon. Majority will be going elsewhere but might have a flutter here too. Can't be many in circa here ...

[glennborthwick] 30/4/2018 09:33

I'm interested in this as have done well in trin. What's the plan to pay the debt down.

[mount teide] 28/4/2018 11:16

The oil market by its nature has always been highly cyclical, but anticipating the timing of a major change in direction is rarely easy, not least because oil market cycles are highly enmeshed with other economic cycles since it is responsible for around a third of all global energy needs.

In the last oil market cycle, 2014 was when the wheels finally came off oil prices, with world oil supply swinging into a surplus as a result of US shale adding 2.1m bpd to global oil output from 2012 to 2014.

As a consequence, oil production exceeded demand by 0.4m bpd and 1.0m bpd in 2014 and 2015 respectively, and Brent fell to circa $30/bbl in early 2016. Although this proved very challenging for the high cost offshore industry, cheap oil stimulated global demand, which grew by 2.0% in 2015.

Various factors - the OPEC agreement in Q4 2016, outages in Nigeria and Libya and long term falling production in Venezuela and Angola - then saw oil supply swing back into deficit (1.6m bpd in 2017), supporting rising prices.

So far in 2018, oil has been volatile in the $60-$75/bbl range, mainly because OECD oil stocks are now almost back to the five year average and the group has floated a 2019 cuts extension.

In the consensus view, oil demand is again expected to exceed supply in absolute terms in 2018 by circa 0.9m bpd - resulting in money managers recently building a near record level long bet on the POO.

Personally, i think the current oil sector fundamentals point to Brent likely averaging in the range of $70 - $85 for the remainder of 2018 - which should suit a leaned down TXP just fine, particularly with a large scale, low cost 2018 production development programme now well underway.

AIMHO/DYOR

[phowdo] 27/4/2018 09:47

Just a matter of clearing this line of stock.
It was well bid at 14-14.5p the other day then a load of stock became available.
Doubt it'll take that long to clear if the price is right.

[zengas] 27/4/2018 09:38

Trin put the best part of £35m m/cap on in the last 6 weeks to £68m (16-24p) and haven't been operationally any different. Production maintained at 2721 bopd end of March 2018.

TXP flat at £17m m/cap circa 1700 bopd last update and 4 wells to be reported on with a further 6 over the remainder of the year + recompletions. That's a difference of an extra £50m m/cap to grow into or at a future overall £50m mkt cap/target of circa 40p.

[marvelman] 27/4/2018 09:30

...that's what I was assuming also phowdo

[phowdo] 27/4/2018 09:24

Looks like some of that placing stock still needs soaking up.

[marvelman] 27/4/2018 09:21

Still waiting for an entry point but the recent chart says not yet