Touchstone Exploration Share Discussion Threads

[captainfatcat] 10/7/2018 21:06

Looks like a pic of what could be the new rig on twitter

[brasso3] 10/7/2018 21:04

PB mentioned in a recent interview that they have been studying the data from the Ortoire block for the last few years. Its only now that they are confident they understand the geology. Also, they found a geologist who worked on the block in the 1970s/ 1980s who provided some valuable input.

I suggest you watch the recent interview.

[acsatix] 10/7/2018 16:56

What does not seem rational in the Ortoire story is that if the drilling costs are the same as in other blocks, why not start using some money from other blocks for Ortorie instead? and if it is such a high probability Block, with such a nice bopd figure expected per well, why was it not targeted earlier?? e.g. by other more powerful companies... who seem to know the place quite well.


Does anyone have a good theory on this?

[euclid5] 10/7/2018 15:21

Thanks for the detailed post Mt T,

Do you know the GCoS for any of the exploration blocks they plan on drilling?

Thanks

[crooky1967] 10/7/2018 13:46

Nice Mr. T.

Just to also mention that the Ortoire lease requires 4 wells to be drilled by 2020 by TXP. If it leads to finds to be commercially viable then TXP can extend the lease for another 25 years.

[mount teide] 10/7/2018 13:23

Ortoire Block - Some analysis of the 2019 high impact exploration Drilling Programme and the location's unique potential today - should any of the large prospect natural gas wells prove successful - to commercial exploit the discoveries.

This is a summary of many previous posts into a single reference source.

Historical background to T&T's oil and gas industry and the Ortoire Block:

In T&T in the 50's and 60's virtually all hydrocarbon exploration was conducted onshore with oil the principal target - natural gas was of little interest - since outside of the low demand, small T&T population there was no way to commercially exploit gas discoveries encountered when drilling for oil - as before the development of LNG technology it was uneconomic to transport natural gas overseas from remote island locations.

Page 47 in the link shows the principal location of T&T's oil fields, pipelines and refineries in the 1950's and 60's.



The Ortoire block in that era was a major area of interest for oil exploration for Shell - they made a number of oil(and gas) discoveries on the block and commercially exploited the oil discoveries via a pipeline across the island to their oil refinery some 25 miles away at Point Fortin.

Major exploration shifted to offshore in the 1970's and 80's once the technology for this type of operation became available - leading to numerous large oil field(and gas field) discoveries.

The advent of LNG ships in the 1980's and 1990's was the catalyst that led to the commercial exploitation of T&T's offshore gas fields, most of which were found while looking for oil.

By cooling natural gas to minus 160 degrees centigrade it changes state and reduces in volume 500 fold allowing LNG ships to transport natural gas commercially worldwide from remote locations and offshore islands surrounded by deep water.

In 2000, Atlantic LNG Co built the first LNG export terminal in T&T - the first in the western hemisphere for 30 years. It has since been increased in size 5 fold.

Shell has been expanding its holdings in Trinidad and Tobago since its purchase of BG Group. It has now become the largest shareholder in Atlantic LNG and is seeking to rival BP as the biggest player in Trinidad and Tobago, principally through growing its natural gas assets.

The Ortoire Block and Exploration Drilling Programme:

To the immediate south west of TXP's Ortoire block lies the Central Block, which contains T&T's only producing onshore gas fields. The Central Block (along with most of the Ortoire block) sits in the highly prolific Herrara Turbidite Fan Fairway - the up dip end of the Venezuelan basin.

The Shell owned Central Block contains three pools of which Carapal Ridge is the largest. The three pools - Carapal Ridge, Baraka 1 and Baraka East 1 - produced some of the largest on-shore natural gas production test results in the world at the time of initial testing. Carapal Ridge tested at 62 MCF million cu ft per day and 1,620 (bcpd) barrels of condensate per day.

The Ortoire block technical work carried out by Touchstone has identified five large exploration prospects - each "Carapal Ridge Plus" size targets. Three are gas prospects within the prolific Herrara Turbidite Fan Fairway - with up to 2,000ft of potential pay that will be drilled to a depth of up to 10,000ft.

The two oil prospects are much shallower targets in the Forest and Gros Morne Formations - at a similar depth to some of the deeper development plays drilled over the last year at around 5-7,000ft suggesting an average drill cost of £650k per well at current drilling rates. The two oil targets are defined in part by oil bearing legacy wells - they are analogous structures to offsetting pools.

Commercial Development Potential of any Gas discoveries:

Should drilling of the Ortoire gas/liquids exploration prospects prove successful - it would be extremely cheap to connect the production into the existing nearby Central Block pipeline infrastructure to the Point Fortin LNG terminal - offering TXP a wide range of commercial possibilities to exploit the assets - including outright sale as BP did with the Central Block.

Trinidad, is a top 10 global exporter of LNG. Its 15 million tonne-a-year (mmta) Atlantic facility, which liquefies natural gas for export ran at 75% of capacity last year as offshore gas deposits become depleted.

Being familiar with the LNG industry - export and import terminals and shipping - i consider the potential investment upside that Ortoire's large reserve, "low risk" gas prospects offers investors is exceptional - as a result of the incredible good fortune of the Ortoire Block being adjacent to the Shell owned Central Block gas fields and pipeline running direct to their world class LNG export terminal.

Without(until recently) an oil major(Shell) willing to fund the cost of an LNG export terminal (minimum US$2bn), similar sized natural gas discoveries on the Bahamas have remained undeveloped for nearly 2 decades.

The application to carry out the Ortoire exploration drills has been submitted with the relevant authority to gain the necessary consents - these will be in place to allow drilling to commence directly following the short Nov/Dec wet season.

As with all exploration drilling there is no guarantee of success, although unusually, the management do consider these prospects "low risk' largely as a result of their own technical evaluation and invaluable input from an old Texaco geologist who was involved in previous exploration drilling on the block in the 1960's (when natural gas discoveries were considered worthless since they could't be commercially exploited), and had retained all the drilling data - none of which from that era had been retained by the T&T oil ministry.

Let industry veteran Paul Baay, who previously built from scratch a 20,000 bopd oil company have the final word:

TXP AGM Presentation - Ortoire Block - The exploration drilling programme will be targeting "both oil and natural gas prospects - with potentially very large reserves". "These are some of the most exciting opportunities i've seen in my 30 year career"

[spangle93] 10/7/2018 12:26

iLeeman - it's at an all time high on AIM, yes, but it's far from an all time high

[mr. t] 10/7/2018 11:25

Brent on the up again, over $79. My view of $16m to $17m operating cash flow this year is based on $75 Brent through h2. For every dollar above that in h2 I estimate an extra CA$300k cash flow.

All adds to the positive news stream we’ll get in the coming weeks, improved sentiment in the sector and stock, and confidence that TXP’s planned drill program is more than fully funded.

A good time to be a TXP holder.

[ileeman] 10/7/2018 10:46

Dont know if anyone has noticed but TXP is now in new all time highs.

I can see a move towards 20-25p over next few weeks, so I have started buying some.


free stock charts from uk.advfn.com

[brasso3] 10/7/2018 10:12

I have had him filtered for a long time! He is like an old women!

[2prsimo] 10/7/2018 10:10

Brasso - I'm surprised it took you so long :)

[brasso3] 10/7/2018 09:21

Life is much more peaceful if you filter Rosser!

rossannan10 Jul '18 - 00:45 - 2065 of 2067 (Filtered)

rossannan10 Jul '18 - 01:05 - 2066 of 2067 (Filtered)

[mr. t] 10/7/2018 00:03

Ross, I gave my view on whether txp has sufficient funding in post 1705;



I then wrote why I think 2018 cash flow will be higher than expected in post 1798



And more operating cash flow reduces the liklihood of needing external funding.

I'd welcome your constructive criticism of those posts - what do you think i've missed that means txp might need to raise more money?

[mount teide] 09/7/2018 23:52

Ross - I'm all for keeping a close eye on the potential downside risks to an investment but, if you overdo it and let it cloud your view, its easy to miss out on some great opportunities that hindsight suggests were staring you in the face at the time.

Being familiar with the LNG industry(export and import terminals and shipping), i consider the potential investment upside that Ortoire's large reserve, "low risk" gas prospects offers investors is exceptional.

Since the physical infrastructure - gas field pipeline to the only world class LNG export terminal built in the western hemisphere for 30 years up to 2010 - to commercially exploit any discoveries is in situ close-by - this is incredible good fortune. Ignore the significance of it at your investment peril!

AIMHO/DYOR

[fardels bear] 09/7/2018 23:10

Christ Almighty. I bet parties at your house are fun.

[mount teide] 09/7/2018 22:44

ross - It is far more cost effective to do low cost development drilling in a high oil price environment than to pay off a modest amount of debt, especially when you've spent the previous three years reducing your costs to the bone to survive a brutal recession.

Even more so, when a company also has a low cost 4 well exploration programme commencing in 5 months time that "has the potential to be transformative for both the Company and T&T" according to TXP's COO at the AGM - an oil sector geologist who specialises in exploration and development geology and the identification and exploitation of undeveloped horizons within mature fields."

If TXP is remotely successful with any of those "low risk" large reserve exploration drill targets - it could reduce the significance of the debt to the equivalent of loose change.

Paul Baay is an economist by training who successfully navigated the TXP business through the last oil sector recession far better than the TRIN management, who came perilously close to losing everything.

Two friends and i are very pleased with the performance of the management/company since becoming shareholders last summer and are highly encouraged that very experienced O&G sector specialists/high conviction investors like North Energy have continued to build their holding from 3.3% last summer to 11.1% today.

[fardels bear] 09/7/2018 21:18

CAD9.2m is just under £5.3m.