Touchstone Exploration Share Discussion Threads

[che7win] 03/1/2024 12:21

Ok, so Coho and Cascadura are a figment of my imagination.

[kaos3] 03/1/2024 09:46

They were on the island long before txp. They went for the off shore.

Where they have success. There is a reason for it.

The whole on shore was shot long ago and we still use the old 2D and some old 3D.

Etc

As trini has a huge fertiliser industry based on gas i would suggest they had lots of gas in mind. Their activity based on gas exploration. But not onshore as you suggest - what would be natural due to the ease and economics

They knew.

And we are trying to be smarter. One day i hope we will be.

I would say we are 20 years behind them. And up until now i and they are proven right. Cascadura being the latest point. Geology is not as the experts and models predicted. Hence my above diatribe on the use of conventional knowledge.

On the other hand superb work and knowledge sharing by SP93 for which i am.thankful and bow down

[che7win] 03/1/2024 09:36

Kaos, baffling comment. The majors were not exploring for gas, taking Cascadura as an example.We have 20 years of prospects to b drill ahead of us

[kaos3] 03/1/2024 09:25

I would just say that i see T&T geology as non conventional and that the conventional thinking is probably to be avoided to a degree.

By the trin txp etc experience i see the geology full of HC traces and pockets but not classic predictable fields. Where classic cpr estimates work is based upon.

Whereever they drilled in the south of the island they got HC more or less. But never in expected comercial quantity as predicted.and expected by conventional science as an average rule. Production in quantity terms always disappoints.

Combined with trini taxes, prices and culture a discount to the classics should prevail. A big one.

But i am invested and will remain so.

Because trini off shore works as it should and because of proximity of Venezuela and above all Guayana there is a high chance of a big classic field deep down.

One day one will be lucky with txp having best chances.

Until then i expect a pearl of disappointments in geological productivity first and then all the usual rest.

Over the last decade clear pattern is established and not by txp only.

Majors thinking the.same. they quit for a reason. Geology above all. Commerciality of it.

Because HC in those pockets had to come from.somewhere significant

[spangle93] 03/1/2024 08:58

Worth looking at the make up of the Cavendish 73.5p target price (cf post 36575)

Of this, just 4.1p is the risked value from the exploration prospects. For scale, that's equivalent to the sum of the values for WD-4 and WD-8. We might as well go back to drilling the legacy licences if that's the case.

Admittedly, the figures they use to come up with this situation are garbage. For instance, all exploration prospects with the exception of Gibba (5MMboe) have an expected resource size of 16 MMbbl (or 100 bcf if it's gas). That includes Kraken.

Likewise, their valuation of resources seems odd, in that they've ascribed a lower NPV/bbl to the oil producing properties than to the rank exploration targets. $1.1/bbl NPV for an asset in production would appear to be pretty stingy.

Having started with a low NPV/bbl IMHO, for the gas projects they then multiply by risk factors. This feels like double-dipping - wouldn't you start with a normal valuation and then apply the risk factors to discount it - but I'm not sure so I'd welcome some feedback.

As to those risk factors, well, again, all gas prospect - Cretaceous or Palaeocene - have the same geological CoS given to them (33%). The exception again is Gibba (50%). A 1 in 3 chance for Kraken, at 16 MMbbl - really? They have a 1 in 3 chance for the Sellafield asset, I'm sorry, Chinook/Kokanee and they've already drilled a well that intersects that.

There's no explicit mention of Coho-2 in the valuation table, but the Coho net resource in the Development section has been raised by 1.4 MMboe or about 8bcf since their September offering, so perhaps its volumes are accommodated in there. If they are, then they've forgotten to include a dry-hole cost to access them.

On the subject of missing dry-hole costs, there is also nothing in the valuation table for the cost of the two legacy wells stated by the company, but then there's no change to the volumes either, so Cavendish don't think they will be drilled or haven't bothered with them

I suggest you take a positive that the target price set by Cavendish is higher than today's share price, but don't push too hard on how it is derived.

Edit NAG, AIMHO etc. Ask HD for a professsional view

[che7win] 03/1/2024 07:40

Eggchaser,
Compressors are fixed.

[kaos3] 03/1/2024 05:47

11 pc thnx...

So basically Cascadura low production is the crux of the present situation.

Not as much cash etc...

All due to blown up production profile capacity predictions

1/3 cca being the reality

That is savage even for me

[eggchaser] 02/1/2024 22:29

Thanks for that 11pc... nothing mentioned about compressors or increasing net backs negotiations, unless in my skip read failed me!!

[11_percent] 02/1/2024 16:05

02/01/24 - 2024 guidance and ops update.

Register to see note...its free.




Text....but without the tables.

2024 guidance and ops update

Touchstone’s 2024 capex and production guidance confirms a return to an active drilling programme with another year of very strong growth ahead. A six-well programme is planned next year that will contribute to more than a doubling of average production y-o-y and a 2024 exit rate over 3.5x higher in its pursuit to fill existing production infrastructure capacity.

- Active drilling programme, strong growth. TXP has set a 2024 capex budget of US$33m to drill six wells – two Cascadura development wells, two legacy block oil development wells, one Coho development well and one Coho exploration well. The first of these (Cas-2) is expected to spud in early Q1 2024 and will mark the onset of the next leg of growth as Touchstone looks to fill its c17,250 boepd of existing infrastructure capacity. The drilling will contribute to another year of strong volume growth, with the 9,400 boepd mid-point of 2024 production guidance representing 135% annual growth and the 2024 exit rate of c14,500 boepd 260% above average 2023 production. To fund this programme, TXP will need to increase its revolving credit facility and management is in advanced discussions, which it expects to complete in Q1 2024.

- Operations update. Commissioning of the Cascadura natural gas facility is complete and uptime has been strong. However, November net sales fell 7% m-o-m to 8,268 boepd, with Cascadura volumes down 8% on the prior month. The Cascadura Deep-1 well into the lower thrust formation is performing below expectation, with gas production of 11.4 mmcfd some way below Cascadura-1ST1 (35.7 mmcfd) and our expectation (c20 mmcfd). To remedy this, management is evaluating increasing the perforated section of the well in H1 2024, which should boost production. The Coho-1 well workover was successfully completed in early December, isolating the water-producing zones and increasing gas production by 15% to 4.6 mmcfd. The first Cascadura development well (Cas-2) is expected to spud in early Q1 2024 and rig mobilisation is expected this month for the two legacy oil block wells. Drilling of the Coho-2 development well and the Gibba-1 exploration well is planned for Q4 2024. Production testing of the Royston-1X exploration well has been suspended after it failed to deliver economic flow rates.


- Estimates and valuation. We have updated our forecasts and valuation to reflect Touchstone’s 2024 guidance and ops update. The biggest adjustments are to production (lower Cas Deep-1 production) and capex, with additional wells now expected in 2024. All told, our net revenue forecasts decline 11% and 23% in 2023 and 2024, to US$35m and US$61m, respectively. EBITDA falls 20% in 2023 to US$15.1m and 32% in 2024 to US$39.3m. Net debt is little changed in 2023 but increases in 2024 from US$13m to US$30m, assuming the company secures the planned increase to its revolving credit facility. Our risked NAV and price target falls 13p to 74p/sh primarily as a result of a lower Cascadura valuation, although potential remedial actions being considered for the Cas Deep-1 well could reverse this cut.

[spangle93] 02/1/2024 16:03

"Paul Baay to present at 6.55pm on 23/1/24"

Oh dear, based on usual market reaction to his random words, might be time to open a short? ;-)

[zho] 02/1/2024 15:43

Paul Baay to present at 6.55pm on 23/1/24:

[che7win] 02/1/2024 15:32

8.4p EPS forecast this year, up from 1.6p in 2023.

Forecast to do more than 5 fold increase, and share price sits on a P/E of 5.

I reckon with some good news and continued growth, thus will be between 100 and 150p by end of 2024.

A lot of good news items also can be announced, any of which could trigger 30% increases.

[1ajm] 02/1/2024 14:04

My fault I guess.


I'll look again if it reaches the 20's. Mcap >2x annual forecast best case scenario in 12 months time with debt is too rich for me.

[che7win] 02/1/2024 13:45

They produce around 3000 boe, give or take.

[sleveen] 02/1/2024 10:44

boe = 6000scf @ $2.4/1000scf.

$51m revenue.

[1ajm] 02/1/2024 08:50

what do you mean?

[sleveen] 02/1/2024 08:44

boe in energy not price.

Have another try.

[1ajm] 02/1/2024 08:37

I see. That's the reason I sold a few years back.

[hiddendepths] 02/1/2024 08:34

Marks, set......go to sleep!

[chessman2] 01/1/2024 20:41

"Why has the share price dropped so much since September for a company that was Q2 1,800 boe/d.

What am I missing?"


I fear you have missed PB the CEO making grand statements about future high production but subsequently announcing reduced production. In fact I believe he's back tracked on several occasions about various matters.

It would appear we need more efficient management.

Having said that, I remain a high 6 figure underwater holder hoping that 2024 will produce good news for shareholders!

[eggchaser] 01/1/2024 19:14

I think the uncertainty around the extended credit facility has been factored into the SP...With production increases means the funding could come via a RBL if the existing avenue fails?IMO and open to debate...

[sleveen] 31/12/2023 12:33

Bad news comes in threes or so it is said, so good news from here.

[11_percent] 31/12/2023 12:14

Post from the discord.

"3 profit warnings"........interesting.


DB - I'd suggest Paul has engineered three unnecessary profit warnings for the market - 90 to 60, 60 to 48 and remarkably promised 60 by year end and delivered 48...... that is a masterclass in taking a good news story, shooting it, burying it, digging it up and shooting it again. I don't think i've ever seen such inept communications. The compressors were just ridiculous - they've proven to be completely irrelevant! For all that they've achieved in recent years, their ability to look disingenuous and disconnected from the reality on the ground has delievered a share price one third of its value three years ago today. That is everything you need to understand how poor;y they've handled events. A real shame. I'm hopeful that they finally get their act together in '24.