Touchstone Exploration Share Discussion Threads

[dunderheed] 09/5/2024 11:57

Respectfully they've been looking for a jv for years and as FH1 mentioned there was talk of what I thought, was a potential, preferred partner type arrangement, with PetroFac (could have got that wrong as relying on memory lazily!) that didn't seem to come to anything but, I do (personalky, lol) feel there is potential with Galeota if you have the cash and more importantly, experience to lever on this, something which Trin may have been lacking? All IMHO and DYOR of course.

[che7win] 09/5/2024 10:55

I think a JV would be preferred way to unlock value for Galeota.

If Trinity management reckon there’s around 777 million barrels of oil in Greater Galeota and it’s producing around 1000 bopd, then it shows the upside. There’s further exploratory work which could increase this field size in future.

Nice to have a bolt on business with cashflow that we can use on Cascadura in immediate future.
Cashflow of $10-$12m 2023 after capes $18m capex.

[dunderheed] 09/5/2024 10:26

FH1 yes 100% agree with your final statement. I think certain people at TXP simply don't know what they don't know however hopefully the tax losses will be "transferable" which will offset this. Timing looks strange but in earlier post there could be multiple reasons for this?
As ever all IMHO and DYOR. Off out now and best of luck all.

[flyinghorse1] 09/5/2024 09:54

I think the Galeota development has been stranded now since the discovery well in 2013.
The recent Trinity plan was to get Petrofac to look at the development and new ides and present to Trinity shareholders in Sept 2023. Trinity presented nothing to shareholders. Trinity itself went round in circles looking at all angles to develop it.
The issue with Galeota is economics due to the unique field shallowness, so unless TXP want a science project all they will have at Galeota is ageing infrastructure that needs abandoning/money spent (1970's, old pipeline ).
I think from past Trin presentations Galeota development needed circa $200mm capex a lot of it was up front before you even got production and the production was not certain as it relied on horizontal wells that were never drilled and tested as proof of production at Galeota.
IMHO-DYOR.

I may be better rephrasing my statement that its a bad deal for TXP-what I do think is TXP are incapable of understanding the offshore platform and pipeline development costs and abandonment liabilites, and existing legacy infrastructure costs, so IMHO have bid far to much for the Trinity offshore portfolio in the share offer to Trin holders.
Anyhow as usual time will tell, but I would , if TXP want to resit round the table and kick those offshore tyres and re evaluate the offer for the offshore component.

[che7win] 09/5/2024 09:43

TXP shareholders do not get to vote.The way I see it, the best prospects across all licences will be prioritised.Meanehike TRIN cashflow and cash alongside tax losses and rationalisation savings goes a long way to justify the value on the deal.

[dunderheed] 09/5/2024 09:30

TXP will not vote afaiaa.
Agree FH1 (whose opinion I will always sit up and listen too) there is a technical risk but, Galeota does have significant reserves upside IMHO.
It has to be said as well, when continually converting Casca BOE it doesn't fairly reflect the relative current low equivalent gas contracted prices.
Galeota if brought onstream efficiently (ahem) does present significant potential revenue upside offset by SPT, of course? Timing is of course "questionable" but what can be said, apart from that of course, considering all the possibilities behind that decision?
All IMHO.

[flyinghorse1] 09/5/2024 08:51

I think this is a dangerous deal for TXP to consider as it contain risk elements that caused Trinity big problems.
1)One of the TXP attractions was the implication that they had large reserves , but critically on land, and gas / condensate mainly.
Trinity are the opposite- reserves/ resources offshore all oil, but largely stranded due to development costs / roi and technical development issues ( Galeota very very shallow)- ie not commercial.
2)Old offshore assets that need a lot of investment to keep running ( pipelines, infrastructure. I recall this was a big consumer of $$ for Trinity when they bought Bayfield.Abandonment carries a large cost.
4)I have concerns over TXP ability to do proper due diligence on offshore assets. I don’t recall ever reading about there skill set when it comes to offshore field management and development

I’m not clear if TXP share holders get to vote on this ( like it appears TRIN holders do, but I certainly would vote against this proposed acquisition.

[king suarez] 09/5/2024 08:12

Most of us post on the Discord, buffy, including DB..

[buffythebuffoon] 08/5/2024 14:45

P.S. Carly Simon only named Warren Beatty of the three she said she was thinking of when she wrote the lyrics.

Buffy

[buffythebuffoon] 08/5/2024 14:42

Spangle, I think my email blockers have a mind of their own. Whatever happened to David Black by the way? It was he that gave me the heads up on the ‘Calgary type’. How right he seems to have been. He was still hyper enthusiastic about TXP though..

As for the message, I’ll reply over there shortly.


Regards,

Buffythebuffoon 😂

[dunderheed] 08/5/2024 09:19

37269, well you did brilliantly spawny, so congrats on that!

[spawny100] 08/5/2024 09:03

Lol yes dunder. Those increasingly pantwettingly ramptastic claims of untold riches from many here (some rampers like the bull and pro now seem to have left the buulding) were the main sell signal for me so that's what I did - "buy from pessimists and sell to optimists"!

[dunderheed] 08/5/2024 09:00

Mate I know re "those two" but sadly the market appears to be simply waiting for the confidence in Casca to crystallise before "re-valuing" (to about £7.50 a share from memory).
Do you remember the 20 cad a share valuations that used to seriously be thrown around, lol?

[spangle93] 08/5/2024 08:56

Think those lines were (allegedly) aimed at a different James?

Buffster - did you find an email from me last week, or am I just junk to you now?

[buffythebuffoon] 08/5/2024 08:46

I hope so.

Parsons was at the helm of Sound Oil, then he changed it to Sound Energy. I should have jumped ship then, before the iceberg loomed large. He soon jumped himself and moved his hype to another vehicle. In fact he’s spread himself thin what with Coro Energy, Ascent Resources and Echo Energy. Sound, Echo..nice one James. At least we know you focus on something.. noise and wind. Perfect epithets for the man.

The yacht on the Thames, beer and wine flowing, just like the man himself. A man in his pomp. He walked into the party and he was literally walking onto a yacht. He wasn’t wearing a hat, but he definitely had one eye in the mirror*

I’m over it; honestly I am. 😏


* One for the oldies

[dunderheed] 08/5/2024 07:41

I assume you mean harsh and unfair on Parsons and Ritson sleveen?!
Only joking by the way.

[sleveen] 08/5/2024 07:08

Harsh and unfair.

[redartbmud] 07/5/2024 16:40

Dunders
"my only point being I've seen quite a few positive FCF "forecasts" for TXP which never "kind of" reach this finishing line, so am a little nervous to put in my "banked profits" yet?!"

Precisely.
Always on the cusp, but never getting beyond.
Always a hiccup or niggle, then the spotlight is moved elsewhere and reporing on the 'next best thing' is forgotten as it fails to deliver, and a new 'next best thing' becomes the focus.

Bottom line - Revenue generated less costs incurred year on year = success/failure of the company.
BUT don't forget the dark art of forecasting reserves in the ground that can potentially be extracted - or not - as the case may be. Those 'reserves' should be a big part of the valuation ascribed to the company.

kaos makesc a good point on geology. There may well be oil in the ground but it is only when it it extracted successfully that you have a result.

red

[kaos3] 07/5/2024 11:28

Ok - i will tell you my angst. I am afraid we are just drilling pockets with high decline rate.

Or is the problem with sand moving. What is the standard industry solution and why not used?

Just im gardening universe thinking

Would appreciate some expert comments on the topics regarding geology and production obstacles

I sense clear established pattern along both companies experiencing similar happenings

[kaos3] 07/5/2024 10:51

To me the biggest q is geology. We got as a rule (trin similar experiences) good sands with excellent pressures.

But

Then allways problems. First with drilling it.. many side drills needed.

Then low production. Then redoing the well with larger production profile - not working.

Similar with trin. They at least informed us what the problem was. Sand production stopped the gas flow and the equipment.

So how to read all this in a simplistic way i can understand - good sand, good pressure... but can not produce as estimated. And after the redoing it - not improving.

Both companies same experience. So geology not the people imho

[dunderheed] 07/5/2024 10:25

Redact thanks for your reply, my only point being I've seen quite a few positive FCF "forecasts" for TXP which never "kind of" reach this finishing line, so am a little nervous to put in my "banked profits" yet?!
S93, RE sturm yes early yesterday and the "stuff" highlighted was exactly what I didn't agree with, for exactly the same reasons as you so better eloquently put but, hopefully that "meaning" was there is some of my "jumbled" words, ahem.
Re extra wells for Casca, yes was concerned regarding the real cpr expert assumptions as well and how this may impact the NPV, which was my "in one hand, out of the other remark" (ahem) and probably not the best way of description.
Either way I'm still excitedly awaiting for the £7.50 share price predictions thrown around like confetti elsewhere, in about 12 months to crystallise?!
Lol re point 6, methinks there are some reasonable opportunities there?!
On phone so apologies for typos, grammar etc and as ever all IMHO plus DYOR!!

[spangle93] 07/5/2024 08:51

Dunders - well argued post. Is the post you responded to by Sturn the one timed at 08:14?

I believe my mum would disagree with "everybody and their mom knows that TXP ressources on the other hand will grow a lot this year. TXP could/should be rated 3+ times higher from the 2 wells that are drilled but waiting to be tested". But then she disagrees with most things on principle.

I think she has some grounds though. First, because while these 2 new Casca wells have some appraisal element, they are effectively exploiting a known field. Second, because TXP has an increasingly dismal record of turning wonderful drilling results into actual production. And third because the decline of these wells could well be faster than would have been assumed in a the annual reserves report - it's certainly more than the company experts on another platform were posting about before production start up.


As for your point 6 - dream on!

[redartbmud] 06/5/2024 22:30

Dunderheed

Good points and a well structured and reasoned piece.
As ever, with Txp there are a multitude of options and possible outcomes going forward.
Taking on the Trin portfolio adds another dimension to the chaotic world of the Clown.
Only time will tell us the impact on the success to the business resulting from 'merger', but I can't help questioning the timing of the move. Txp has its' hands more than full with ongoing operations that have been mired in delays and underperformance that have fundamentally reduced the value of the company and resulted in two unplanned fundraisings.

Egg's financial appraisal gives a more confident summary of possible cash inflows that present a much better financil picture, if we can totter and lurch to 2025 without a catastrophic update in the interim.

What is undeniable is the ongoing weakness in the share price that seems to indicate the jury remains very much with a negative bias.

red

[dunderheed] 06/5/2024 21:27

I agree with a good post from Sturm over on LSE earlier today and excuse me replying here - but LSE reduce amount of words in posts so I'd have to write multiple entries and on phone - so not easy. I think Sturm posts here as well, so thought I'd reply here! I'm personally not sure about the “expected̶1; increase in resources for TXP versus TRIN (in a non cash constrained environment) and let's wait and see how testing and plateau production profiles impact this for current wells at Casca? It could be a case of, in one hand, out of the other (I certainly do not hope this is the case but we simply do not know, "considering" other history - but I personally believe Casca will always be a "winner" size wise)?!
I think it is questionable how much further TRIN price may have dropped but think there is certainly room for TXP share price to increase over the months ahead so am a "little" confused (but not "that" concerned) as to "Why Now"?
That is not to say it is an absolutely obvious deal to be done - at some point with obvious benefits and nothing genius in this - just like obtaining contiguous acreage to discovered resources - purported by some to be "genius", ahem.
Possible "reasoning" (?) could be :
1. We dont know sod all about sod all regarding TXP current production profiles going ahead but, I'd have thought this "deal" was certainly “mooted” at least 6-9 (probably nearer the 9?) months ago when perhaps Clown expected much higher Casca profiles would be expected hence, thought share price would be higher anyway?
2. It could be that TRIN have now intimated there are other "interested parties" which led to this being upgraded more quickly than was the preference (I personally do not give this much credence however - either genuine interested parties or "bullied" into making "quick" offer by TRIN management with the "threat" of this - could have prompted now)?
3. We do not know if there was any high level "external" influence - encouraging such a deal to TXP as well?
4. Aligned with above - perhaps this deal is "linked" to other ongoing strategy we are also not aware of? To be clear we have "paid" for this with some form of perceived "dilution" had we potentially "waited" for higher TXP share price but, I really would not want Shell onshore assets at all - definitely with no further "dilution" - unless they paid us to take them or unless it could lead to some form of negotiated gas price increase (but the less said about that already publicly discussed item, the better, ahem!) - as I personally think we have far too much to be getting on with, at this time already!
4. It could be the case of Clown getting the timing strategically wrong again (surely always best to have just got Casca done and producing in first place - then do the Rosyton Chinook higher risk stuff later, IMHO)?
5. It could be the case that Casca wells coming on-stream aren't the greatest wells ever seen and the TXP share price continues to "struggle" and this prompted some "corporate actions now - rather than "later"" (I don't personally think this as I would already have sold but it is a "risk") but saying that, it would be a pretty catastrophic scenario anyway and dwarf this current perceived "dilution"!
From the above, I also don’t take much encouragement that TRIN have been “convincedR21; of the robustness of Casca current production profiles to "recommend" the offer, as to be really honest, how else are the TRIN management going to conjure up such a large short-term increase in share price and allow them to exit in the short term so “easily”?
6. So who knows - it really could be any of the above or none - but one thing is for sure I would like to see some "sacrifice" within TXP senior "management" as well as TRINs for "G&A reduction efficiencies", as see this as a good opportunity to potentially clear out dead wood on BOTH sides?
As ever - absolutely all IMHO and DYOR of course.