Touchstone Exploration Share Discussion Threads

[mount teide] 12/5/2018 23:14

Last summer Bloomberg compared the Brent Oil price forecasts from 14 leading investment banks for 2018 and 2019.

Revisiting these forecasts today makes both interesting and potentially embarrassing reading for most of Wall Street's finest - for 2018 just 3 of the 14 had Brent averaging over $56; the mean was $54.4.

Brent is averaging $68.5 in 2018(26% above the mean forecast). Only two investment banks had forecasts close to this figure - Barclays at $67 and DNB at $70. The Barclays team incidentally, were spot on with their $56.5 forecast for 2017.

For 2019, the mean forecast was $63.4 - Barclays at $85 were the highest and Citigroup at $48 the lowest.

[sleveen] 11/5/2018 17:43

Today's ZENGAS comment has replaced his previous comment in the header.

[daar] 11/5/2018 15:49

All the buys this week and especially today and it's barely moved? Anyone knows?

[awise355] 11/5/2018 13:15

This could be it...666k shares traded

[otemple3] 11/5/2018 12:48

Perhaps I should be clearer. I get the investment case but when people say Trin has gone up so txp MUST I disagree. That's not how markets work.If they keep delivering, they should rerate. Fact. Ross, MT, Zengas all good points although I may disagree with MT about what split of trins increase is oil / perception of management.

[zengas] 11/5/2018 12:20

Nothing wrong at all with the growth prospects of all 3 and no surprise that Trin should be well in the lead in terms of valuation.

If Trin up their production and reserves then a good case to see it double and a £140m m/cap. So where would that place TXP? Hopefully, and my expectation is for TXP to mirror that same growth.

2 rigs in operation so potentially could see 20+ wells drilled per year (from this years current 12) and many of these are from proved undeveloped locations so as some have said above, over the next 2 years we could be circa 4k bopd and a lot more reserves than now. Last year there were 208 identified drilling locations.

[mount teide] 11/5/2018 12:03

ot3 - the huge increase in the price of oil over the last year will have had a far greater positive financial impact(many multiples) on the businesses of all the T&T based oil and gas companies than anything the management of these companies carried out to reduce costs and control debt during the more than half decade recession in the sector - the maths is overwhelming!

I hold very large positions in both TXP and TRIN, and if the POO stays in the $70 - $80 range over the next 12-18 months, i would expect TXP to comfortably outperform TRIN, as a result of the very high rate of drilling success/resultant incremental production additions achieved last year, accelerating from the 10 well 2018 drilling programme currently underway - it makes TXP at the present price one of the most interesting relative value plays in the sector.

Large TXP shareholder North Energy Capital AS after doubling up in the recent placing now holds over 11% at an average price of around 9.5p - they are not your average II - the North Energy management correctly sold off their Norwegian North Sea O&G E&P assets early into the last recession to concentrate on high conviction investments in the O&G small cap sector. If their investment portfolio performance to date is a reliable guide, their decades of hands on operational, commercial and financial experience in the sector is paying dividends.

[brasso3] 11/5/2018 11:49

Just a waiting game with this one. The chart is trending up and just requires RNS confirmation that production is increasing.

[grannyboy] 11/5/2018 11:43

Good posts from che7win, crooky, and especially ZENGAS in response to 'doubters' like otemple3..

[che7win] 11/5/2018 11:42

The chart here looks ready to curve up imminently imho.

[che7win] 11/5/2018 11:41

Zengas,
good post.

So really, I think we should be trading at 30p right now.

[sleveen] 11/5/2018 11:31

wrt to ENQ and PMO, both have large debts but both are up around 30% in the past month since POO has risen.

I would expect a rerate to reflect POO increase.

[crooky1967] 11/5/2018 11:25

TXP has drilled 5 wells this year with 5 to follow by August 2018. With probable plans to drill more in the second half of the year especially as the POO is so high and likely to continue.

They must be near 2000 bopd with a plan in place to get to 5000 in 2020. With netback currently around $32 a barrel there is no reason why they can't continue to invest in more wells while reducing debt.

[zengas] 11/5/2018 11:21

The debt was taken on at a much lower oil price to advance drilling.
Seriously why does everyone think that the focus should be to clear the loan ?

The terms of it don't start until next Jan and even then it's only a small repayment. They may never clear the debt or want to as production/reserves growth continues. It's only a $15m loan and even then likely they would re-finance it as they continue to grow. Trin haven't added any production of note in the last 20 months and of what they have TXP has matched it from a much smaller operational point of view and added 20% net reserves in the process in 12 months and which I again expect to be achieved this year on the reserves front.

Trin 2700 bopd/ 20 mmbo P2 and £72.3m m/cap @ 25.6p.
TXP 1700 bopd/18.5 mmbo P2 and £17.9m m/cap @ 13.85p.

TXP should at least be closer to a £40m m/cap. (CERP @ 5.25p = £34m m/cap and 540 bopd, 11.8 mmbo 2P and imo will need more cash ie dilution or likewise debt to grow.)

If we get a decent update on this last batch of wells then I view TXP as the best value in terms of all three companies.

[che7win] 11/5/2018 11:03

TXP is expanding production by at least 30%, if not more on the 10 drills.

They took 2 rigs, when TRIN stalled on expansion this year. I think they will expand aggressively and will surprise more to the upside than TRIN.

TRIN also has more risk with offshore, so for me TXP is the better play.

[otemple3] 11/5/2018 10:45

I get the operational leverage but I am not investing here as have not (yet) seen enough to convince me on sustainable production growth. Market seems (to me) less interested in leverage based companies (enquest, prem) at the moment. Just think it is overly simplistic to say both are t&t so both should behave the same. Trin management have transformed the business and the share price is reacting accordingly. The recent price of oil is imho a small factor in this. Txp has also increased as poo has.

[che7win] 11/5/2018 10:28

For one reason, TXP has higher gearing than TRIN, it should outperform with POO rises.

It is also growing production faster, expansion at cheap cost.

[otemple3] 11/5/2018 10:26

Why should this catch up with trin? They are completely different businesses with different risk profiles. If txp can prove they can grow production sustainably and therefore clear the debt, they will re-rate. Trin is already there

[sleveen] 11/5/2018 10:08

Agree, Q1 update can't be far off to show production progress.

[che7win] 11/5/2018 10:04

At last on the move, should be over 20p to catch up on TRIN

[2prsimo] 11/5/2018 09:01

Just too cheap given the poo

[phowdo] 11/5/2018 09:00

Looking a bit better now with narrower spread. Perhaps that line of stock cleared.

[mr. t] 10/5/2018 16:30

Fair point!