Touchstone Exploration Share Discussion Threads

[mount teide] 21/7/2018 09:44

Oil Market News - OilPrice.com

'A top Saudi official said that oil production would remain flat in July compared to June and that Saudi Arabia does not want to oversupply the market. Previous comments suggested that Saudi Arabia would ramp up to 10.8 million barrels per day (mb/d) in July, but instead the Saudis will keep output at 10.5 mb/d.

Goldman Sachs—which has been bullish on oil for most of this year— continues to expect that Brent Crude prices could retest the $80 a barrel threshold this year, but probably only late in 2018, not this summer, as uncertainties mount over the timing and magnitude of global supply disruptions.

“Production disruptions and large supply shifts driven by US political decisions are the drivers of this new fundamental volatility, with demand remaining robust so far,” Goldman Sachs said in a note, adding that Brent Crude is expected to trade in the $70-$80 a barrel range amid this new fundamental volatility.

Two of Venezuela’s four oil upgraders are slated to go offline for maintenance in the next few weeks. The upgraders process heavy oil from the Orinoco Belt into an exportable form of oil, and they have a combined 700,000 bpd of processing capacity. The maintenance for the two upgraders throws up another major obstacle for Venezuela, which saw its total oil production fall to just 1.34 mb/d in June.

US Pure-play shale industry is falling out of favour - In recent years, investors flocked to pure-play shale companies, eschewing integrated oil companies, an old guard that seemed overstretched and out-of-date. Now the reverse is underway.

Wood Mackenzie says that oil companies with a diverse portfolio are trading at a premium relative to pure-play shale drillers. “Both the diversified independents and the majors have overtaken the focused US players for the first time,” WoodMac analysts said in a statement.

The WTI Midland shale oil discount relative to Houston widened to as much as $15 per barrel this week and the odds of it returning to single digits before late 2019 seem to be vanishing. Meanwhile, Plains All American saw its request for an exemption from the Trump administration’;s tariffs on imported steel declined - the rejection could raise the cost of the crucial Permian pipeline project.

US Congress is considering legislation to speed up LNG exports. The US Congress, in an effort to undercut Russian gas in Europe, is looking at legislation to accelerate LNG exports. The bill would also authorize sanctions on Russian energy projects, including the Nord Stream 2 pipeline.'

[lauders] 20/7/2018 02:37

Thank you scottishfield! I should pay attention to your holdings more! I believe you bought into TXP some time ago so obviously have an eye for promising companies ;-)

Being new here I looked around for more TXP related info and found this piece that has probably been referennced here before:

The Company currently holds a 50% non-operated interest in the Icacos Field, via its subsidiary Leni Trinidad Limited ("LTL"). The other joint venture partner is Touchstone Exploration Inc ("Touchstone"), via its subsidiary Primera Oil and Gas Limited ("Primera") who holds a 50% interest and is operator.

As announced on 16 April 2018, the Company and Touchstone have agreed, in principle, for LTL to acquire Primera's 50% interest in the Icacos field.

The Company announces that LTL and Primera have now signed a sale and purchase agreement ("SPA") and, subject to certain regulatory approvals and completion of the transaction, LTL will be the 100% owner of the Icacos field and Operator, with the effective date of the transaction being 1 April 2018.

Another announcement from Columbus Energy Resources PLC is interesting re: M&A activity in Trinidad & information on the fields/O&G industry there.

Meanwhile more discoveries in T&T are encouraging -

[fardels bear] 19/7/2018 22:25

Oh dear, that's blotted your copy book.Secretaries...

[mount teide] 19/7/2018 22:02

mm - i'm flattered - can only put it down to having some very talented secretary's over the years!


Interesting blog post this week by Dr. Mamdouh G. Salameh - a highly distinguished international oil economist and consultant to the World Bank on oil and energy - in response to an oil industry article titled:

Is The Oil Industry Repeating A Critical Error?

'A viable economic principle dictates that oil-producing nations should aim at maximizing the return on their finite assets to the highest levels the global economy would allow them. The global economy will not shy away from letting them know in no uncertain terms when these levels have been reached as was the case in 2008.

While conventional oil production (that is oil gushing from underground on its own volition) peaked in 2006, unconventional oil such as US shale oil (tight oil), Canada’s tar sand oil and Venezuela’s extra-heavy oil has come on the scene though it is very doubtful they will be able to bridge the oil supply gap in coming years.

And despite claims about rising US oil production (mostly shale oil) to 10.7 million barrels a day (mbd) so far this year, its impact on the global oil supplies is limited. In 2017 the US produced an average of 9.36 mbd and consumed 19.92 mbd thus having to fill a supply need of 10.56 mbd by imports. This is despite the hype by the likes of EIA, IEA, the 2018 BP Statistical Review of World Energy and the Financial Times in cahoots about the great potential of US shale oil.

The US shale oil industry is not a profitable industry. Shale oil drillers continue to produce at loss in order to attract more investment from Wall Street to stay afloat. They are like ‘robbing peter to pay Paul’. Without this capital the drillers would have gone bankrupt long time ago.

Peak oil theory is a reality despite the continuous hype about the potential of shale oil. What peak oil proponents could not have anticipated is that investors would subsidize an unprofitable and unsustainable shale oil industry. Eventually, investors will realize that there is no long-term value in Shale oil.

The fact that investors have been cautious about additional investment in the Canadian tar sands, but not US shale oil is due to the keen intention of the United States to be in a position to influence the global oil market through its manipulation of oil supplies and prices for geopolitical and economics reasons.

Still, nobody is paying enough attention to the fast-approaching oil supply gap probably as early as 2020. This is due in large part to an oil investment drought marked by three years of consecutive decline in oil prices and the lowest oil discovery rate in more than 70 years according to the IEA.

By 2020, 15 mbd of new oil supply may be needed to meet a projected annual average rise in global oil demand of 1.59 mbd and also offset an annual natural depletion rate in global oil production estimated by the IEA at 5% or 4.8 mbd, virtually equivalent to losing the current output of Iraq.

A lack of investment will cause oil production to decline steeply and 80% of the current new oil supply is needed to offset natural declines.

As for a post-oil era, a few experts have been saying that a widespread electric vehicle (EVs) use could spell the end of oil. The tipping point, they reckon, is 50 million EV on the roads by 2024. However, 50 million EVs could hardly make a dent on the global demand for oil let alone replace it. They will only reduce the global demand by only 1.1 bb, or 3.4%. This will neither be the end of oil nor a tipping point. A tipping point for oil could only be reached once 739 million EVs (50% of the current global number of internal combustion engines (ICEs)) are on the roads worldwide within the next fifty years. This is impossible to achieve within that time frame.

Oil will continue to reign supreme through the 21st century and maybe far beyond. A post-oil era is a myth.'

Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London

[scottishfield] 19/7/2018 20:40

Good to see you here Lauders, welcome.

[captainfatcat] 19/7/2018 19:34

FB I closed out my SDX positions today to do so. Fingers crossed my timing is good.

8-)

[marvelman] 19/7/2018 19:26

Mount Teide...anyone familiar with your eloquent posts on the MPL thread and elsewhere would have to say that last line on post 2141 is a blatant lie :-)). I still keep up on MPL just to pick up some tips on my own English grammar...regards.

[fardels bear] 19/7/2018 19:20

You little tinker, you..

[captainfatcat] 19/7/2018 15:40

Added a few more TXP and SQZ today

8-)

[mount teide] 19/7/2018 13:41

zho - you just reminded me while i elected to study Maths, Further Maths, Physics and Chemistry at A Level ;-)

To this day English Grammar remains mostly a complete mystery to me!

[zho] 19/7/2018 10:13

It's a pity they can't spell 'dependent' properly ;-)

[lauders] 19/7/2018 01:52

Thank you very much Spangle93 and Mr. T! I hope to be well rewarded with you and others here.

I like these excerpts from the presentation (slide 5) referenced here a few times already:

1) Technology and new ways of thinking are the significant value creators.
2) "Our business is not dependant on finding oil... we know the oil is there"

The contrast between the maps on slides 8 & 9 are also rather encouraging for the future potential once all the drilling is in full flow. Looks like a great start to the drilling this year and perhaps (?) some news due anytime per this text in the June 12th RNS: Additional volumes have been realized from three of the five wells drilled in 2018 with the final two wells expected to come on stream in the next 30 days. One to tuck away and try and forget about the daily movements!

PS: This may prove useful to some:

What’s Next For Touchstone?

At the time of writing this case study, a total of ve more wells are due to be drilled as part of the programme. Baay expects all of these to be completed by late July, allowing Touchstone to pass through its 2,000bopd production target by late summer, well ahead of schedule. The business will remain focused on developing production at its four onshore lease properties- Coora Block 1 & 2, WD-4 & WD-8- as well as its Fyzabad coastal property. As at the end of Q1 2018, the rm still had a cash balance of $10.4m and a working capital surplus of $3.9m. It has said that this money, used alongside cash generation from its new wells, could even allow it to extend its current drilling programme later this year to make the most of the cost reductions associated with using two drilling rigs at once. From 2019 onwards, Baay has stated that Touchstone will aim to drill 20 wells a year. To achieve this, a lot of future effort will lie in the development of two of its large exploration blocks – East Brighton and Ortoire. These sites will be crucial to Baay realising his next ambition- turning Touchstone into a 5,000bopd producer by the end of 2020. East Brighton is a 14,412-net acre near-shore block where Touchstone owns a 70pc working interest.

In its 2017 results, the company announced that it had identi ed an onshore area at the site that can be drilled horizontally to hit the primary target. With Touchstone initially committing to the drilling of one offshore well at East Brighton to secure its licence, this onshore option will be much cheaper. Touchstone also announced that it was able to reduce its $6m letter of credit relating to the permit to $2.15m and had secured a nancing facility to support the full amount. Meanwhile, Touchstone also owns an 80pc interest in Ortoire, a 35,765 net acre exploration site containing four established mixed oil and gas pools called Balata West, Mayaro, Maloney, Lizard Springs. Although Ortoire is structurally complex, Touchstone has said it is seismically well de ned, containing structural traps, stratigraphic traps, and turbidite deposits. Work at Ortoire is in its early stages, but Baay has said the rm with on the area towards the end of 2018 and into 2019. Encouragingly, a prosperous collection of three gas discoveries known as the Central Block containing 500BCF of gas lies just beyond Ortoirs’s borders. Carapal Ridge – one of these discoveries – is Trinidad’s largest onshore gas/ condensate discovery in 50 years, containing 25MMboe. Meanwhile, a nearby development called Catshill contains 30MMbbls oil and another called Navette includes 60MMbbls. If these discoveries are anything to go by, then Ortoire could house some serious potential.

[brasso3] 18/7/2018 21:54

The MMs are offering one last cheap entry point before take off above 20p.

[2prsimo] 18/7/2018 16:10

Hope everyone has had a perusal of the "Value the Markets" article - some good stuff contained therein.

[spangle93] 18/7/2018 15:47

Ha ha, well, I meant it's on the slate/agenda/programme at this event, but I bow to your word to avoid confusion

[mr. t] 18/7/2018 15:47

Lauders - good to see you invested here.
Spangle - thanks for the link. My other oiler, i3e, is presenting too so I hope to make it along.

[brasso3] 18/7/2018 15:40

stated? :)

[spangle93] 18/7/2018 15:07

Welcome lauders. Hope you'll be well rewarded by your investment

By the way, not sure it's been mentioned but Touchstone is slated to be strutting its stuff to retail investors in the City in early September

[lauders] 18/7/2018 14:33

Been following TXP and the investors who follow it closely here for some time and finally took the opportunity to pick-up a very small starter holding with the limited funds currently available. Will watch for any further weakness and take advantage if funds are available again, but I could have to rethink that plan if any news comes our way soon! Planning to hold on to this first buy long-term.

[someuwin] 17/7/2018 21:40

Touchstone Explor. @TouchstoneExp 2 minutes ago

Battery site on #TXP WD-4 block #Trinidad #OilandGas #OOTT

[lord gnome] 17/7/2018 08:43

MT - thanks for that article. I have copied it over to the DGOC thread as it is highly relevant and explains why DGOC has been able to cut such good deals with the shale drillers. They are heavily leveraged and need to cut debt, they are distressed sellers. Avoid shale - buy DGOC.

[captainfatcat] 16/7/2018 20:27

Nice post MT