Touchstone Exploration Share Discussion Threads

[futuredlighter] 22/6/2018 10:01

loving the jib of Touchstone

[mount teide] 21/6/2018 14:07

With potential production in the range of 2,250 - 2,500 bopd from existing assets at circa $35 a barrel netback by year end - this should very comfortably support a circa 30p+ share-price as we enter 2019.

Which is when things start to get really interesting:

* A largely self funding Production development programme of 20 wells each with 75-100bopd potential

* 4 ultra high impact exploration wells on the Ortoire block each with 2,000+bopd potential.

By next summer, if one, never mind more, of the "low risk" Ortoire wells come in around 2,000bopd the potential valuation upside will be enormous. (10+ bagger potential)



Apparently, the TXP team tasked with evaluating the prospect found a geologist from back in the day when much of the block and surrounding area was originally explored (by the majors of the day), who had lots of old(new) data and first hand knowledge that proved highly useful to the team.

Back then 2,000 bopd potential was considered very small beer by the majors with the average price of oil in the 60's/early 70's at circa $3.5 a barrel.
How times have changed!

[mount teide] 21/6/2018 11:36

According to Bloomberg, Goldman Sachs estimates that the OPEC+ group could only bring a maximum of 1.3 mb/d of output online over the next 12 months - OilPrice.com

'That would leave the oil market dangerously thin on spare capacity. “If we see any further disruptions in the market, OPEC will have used their supply bullets and find themselves short of spare capacity, setting the stage for much higher prices,” said Bastien Declercq, head of CSC Commodities.....

....The problem is that the disruptions seem to be multiplying. We have known for a while about the rapid declines in Venezuela, plus the market is already baking in some losses from Iran. But around 400,000 bpd just went offline in Libya because of militant attacks. The duration of the outage is still unknown, but it has yet to be priced into the market. If the disruption is sustained for a lengthy period of time, it would wipe out a significant portion of the increases that OPEC+ is considering.

Meanwhile, even as the additional supply satiates the market in the near-term, the reduction of spare capacity to historically low levels would only put more pressure on 2019 and beyond. “The reduction in spare capacity will trigger more volatility in oil prices,” Antoine Rostand, president of Paris-based oil data company Kayrros, told the Wall Street Journal. “Any disruptions such as Libya will push up spot prices immediately.”

The result could be a return to contango, in which near-term prices trade at a discount to longer-dated futures. “The lack of spare capacity could push oil into contango in the longer-term as contracts further out jump,” Richard Fullarton, founder of the hedge fund Matilda Capital Management Ltd., said in a Bloomberg interview. “Stronger demand and potentially higher costs of U.S. production may also support the curve.”

The Wall Street Journal reported that Saudi Arabia was shopping a 500,000-bpd increase to fellow OPEC members this week - barely be enough to offset the reduction in output expected in Venezuela between now and the end of 2018 - although, a figure likely to be accepted by most of Opec, who other than Russia have no spare capacity.

[deeppockets] 20/6/2018 22:05

Saw CEO at presentation this evening. Still sees big valuation gap with competitors at current state. New drills next year make it a no brainer and if new Ortoire block delivers it's all bets on a buyout by a big boy (Shell etc)

[brasso3] 20/6/2018 21:38

From a Leo Koot (CERP CEO) interview today regarding T & T taxation:-

How does Columbus view Trinidad and Tobago’s Supplemental Petroleum Tax (SPT)?
When oil prices rise above USD 49.90 per barrel, SPT becomes payable. If you do sums, the SPT is like a cliff edge. It kicks in at USD 50 per barrel and you start paying 18% extra in tax. Only when oil prices get beyond USD 60 per barrel do oil companies start benefiting from the increased oil prices.

Industry and government have been in discussions in an attempt to revise the SPT structure, unfortunately, without a positive result to date. The present system gets in the way of growing businesses in Trinidad and reduces critical investments necessary to achieve the government’s ambitious goals. This tax destroys value, especially when the oil price hovers around the USD 50-60 per barrel “death zone,” where business’ after-tax revenue goes down.

Collectively, we need to come up with a different mechanism that gives government and industry a share of the revenue increase that allows businesses to reinvest in country.

An equally important issue is that we would encourage faster decision making and action by the government in all areas. For example, we have been waiting a number of years for the grant of a private petroleum licence over two of our assets. We are waiting for a VAT refund, and yet, we are asked to pay our taxes on time.
This is not unique. It creates all sorts of issues around valuations of businesses for future transactions, purchases, sales, M&A deals etc. The markets stall if there is no certainty of action and it can result in a lack of available capital to invest in the country.

[grannyboy] 20/6/2018 20:56

Just had the chance to watch the shareprophets video..and greatly impressed with Paul Baay's optimism, and confidence in what can be achieved, and IS being achieved..

There is no flannel or waffle..All matter of factly, and doing what they say they are going to do..

[euclid5] 20/6/2018 20:54

Walter W - how about i3e

[brasso3] 20/6/2018 20:19

Need to keep tucking these away while they are sub 20p.

There will be a big spike during exploration drilling in 2019 that is for sure. If they strike then expect at GKP style rise!

[walter walcarpets] 20/6/2018 19:59

"10 year drilling inventory and 208 wells" without having to apply for new licences!

[walter walcarpets] 20/6/2018 19:38

If anyone can find a lower risk and more compelling oiler on AIM, could you please point me towards them. DYOR etc

[mount teide] 20/6/2018 19:06

Ortoire - "These exploration targets are large, they are world class exploration targets - and are low risk."

"Were looking for wells that can do 2,000 bopd - these are wells that will be twinned with wells drilled in the 1950's/1960's"

"Low risk" low cost exploration wells that each has the potential to exceed current daily production!

With the current production development programme exceeding expectation and financed from cash flow and, the ultra high impact Ortoire exploration programme of world class targets due to start in jan 2019 - the next 12 months should be a helluva interesting time to be a TXP shareholder - particularly with the company currently generating $14m/year of cash with an £18m market cap !

[sleveen] 20/6/2018 18:56

sp has been 16p+ when TXP were producing 1400-1500bopd in Oct/Nov...so 2000bopd?


No ramp intended.

[walter walcarpets] 20/6/2018 18:48

That's very conservative sleveen!

[sleveen] 20/6/2018 18:30

Wow, best interview yet!

Thanks for sharing Crooky.

Edit: Surely a conservative 18-20p soon?

[crooky1967] 20/6/2018 18:20

Indeed Mr. T, not sure how he can sit there and not wet his pants with excitement when talking about possible 2000bopd wells next year.

[mr. t] 20/6/2018 18:04

crooky , Paul Baay gives a confident interview. Production ahead of forecast. Costs reducing as expected. $34/bbl current netback. $14m cashflow in 2018 covers drilling costs. Lenders supporting increased drilling next year. Add today's oil prices into the mix and good news flow due in the coming weeks, and Touchstone is a compelling investment opportunity.

[crooky1967] 20/6/2018 16:57

Proactive interview

[lord gnome] 19/6/2018 15:34

That sounds like a very expensive bit of financing to me. I wonder what the true APR is on that loan? Flat rate 8% compounded quarterly?

[sleveen] 19/6/2018 15:15

Touchstone is required to repay $810,000 per quarter commencing on January 1, 2020 through October 1, 2022, and the then outstanding principal balance is repayable on the maturity date.

The Amended Term Credit Facility continues to bear a fixed interest rate of 8% per annum compounded and, payable quarterly.


----> interest has always been paid quarterly, the 810k is capital.

[flyinghorse1] 19/6/2018 14:28

The way I read the current and old loan info is that we pay interest now regularly till 2020 and then the principal amount starts

[sleveen] 19/6/2018 14:08

flyinghorse

Those payments included capital .

[fireplace22] 19/6/2018 14:03

Headwinds like this:

[flyinghorse1] 19/6/2018 11:49

I thought the interest payments were being paid from jan 2018 at quite hefty terms and still are. It’s the principal they have delayed.
I do hold but had hoped to see capital paid down sooner than later.