Touchstone Exploration Share Discussion Threads

[ileeman] 12/10/2018 14:27

Bought some today looks very very cheap, can see 30p fairly quickly here.

[walter walcarpets] 12/10/2018 09:45

ta sleveen.

[sleveen] 12/10/2018 08:32

proactive interview and presentation now in header.

[captainfatcat] 12/10/2018 07:47

Spangle thanks for the heads up on the presentation.

[highly geared] 12/10/2018 07:32

Brent back up over 1% overnight,now around $81.30.
Will be interesting to see if the main markets bounce later today after the 1000 + point fall on the DOW over 2 days.
Oil over $80 seems here to stay...

[spangle93] 12/10/2018 01:31

Corporate presentation update/evolution.

No radical departures from previous month, and some slides could do with an update, e.g. slide 13 still only shows production to the end of June, slide 9 doesn't update share price movements. The RNS this morning already supersedes this presentation.
I didn't go through all the end notes but at a glance they looked pretty similar

Changes from september presentation

Slide 3 (corporate summary) and slide 4 (board and executive) are new

Slide 6 - one new employee, clarification of working interest, rather than net, acreage (Presumably cos someone pointed out it was a different figure to that showing the same information on slide 11)

Slide 7 - net debt information repositioned
Slide 15 - updated with new well footage information
[the data source they refer to is available here, updated to June 2018 which is ahead of this slide. Maybe one for the header?]



Main change is that more information on the Ortoire block Coroson West targets is provided.
slide 21 - (vs previous slide 19). Now 120ft hydrocarbon thickness (previously 94ft), plus shallow seismic anomaly mentioned.
Suggestion of a deeper target below the previous one, at 9,200ft, which I believe is new information, and would indeed indicate why a well could cost up to $5MM, though unclear whether the well (TD 7,500ft stated) would try to target it.

[spangle93] 11/10/2018 23:44

Mount T - thanks again for sharing your research - it certainly isn't straightforward.
I think we know where the advisers to the UK government on tax matters go for their holidays. :-(

[mount teide] 11/10/2018 23:35

Spangle - as a rough guide it would appear at $80 oil and 2000 - 2500 bopd in 2019, if TXP drills 4 wells a quarter the drilling of one of them could be funded from savings made in reduced SPT - because the actual production figure that would be used for SPT purposes under the rules would range from 1,500 up to 2,000 bopd during the year.

[highly geared] 11/10/2018 23:08

The great thing here is TXP is materially undervalued based on where it is now and the 2019 existing field programme.
Ortoire is pure upside but that upside could be multiples of current production..
About as good a risk/reward play as you can get....

[mount teide] 11/10/2018 23:01

Thanks CFC - so 14 production development wells in 2018 followed by up to 15 production development wells and up to 5 Ortoire exploration wells in 2019.

In less than two years Paul Baay is looking to drill 29 production development wells and up to 5 ultra high impact Ortoire 'low risk' exploration wells.

The guy certainly knows how to 'sweat the assets' in the early years of a new oil market cyclical recovery stage when $80 Brent is on offer. Looks like he is replicating the successful MO he used during the previous oil market recovery stage in 2000-2008 to take a new company from scratch to 20,000 bopd.

I hope the managers of my TRIN investment watch this lastest TXP video - TRIN are giving us 12 production development wells in the same 24 month timeframe. Perhaps they can explain why they can't offer a similar level of production development drilling as Paul Baay(never mind the exploration drilling)considering how cash rich many of us have helped them become this year.

[spangle93] 11/10/2018 22:49

Thanks CFC, very interesting as always to hear him explain the background.

Compared to the header from September's conference notes, they are now talking 4-5 wells on Ortoire next year, still starting in Q2, with the intent of twinning (i.e. drilling close to) existing exploration discoveries to reduce risk.

I was starting to become concerned that they were running out of time to deliver another 6 wells this year, but drilling is planned to start next week, and based on their experience of 50 wells, they are confident in having them all drilled and completed by Xmas, although not all will be brought on line this year.

There was one gurgle at a critical place. I heard that the "combined targets were 300 MMbbl oil in place @&$*& gas". Did anyone make sense of this?


Mount T - ref 3159 - thanks for the explanation. Does this mean we're more likely to pay SPT if we've only drilled 1 well in Q3. Or is SPT small enough at 2,000 bbl/day that one well's capex allowance will cover it?

[novicetrade68] 11/10/2018 22:07

Two delayed 50k trades were paying 20.90p, and a 45k at 20.90 published late too, sometimes very difficult to get a feel for this share when trades are systematically being delayed.

[mr. t] 11/10/2018 21:31

Thanks captainfatcat. Paul Baay, competent and confident as ever. I might buy some more shares if we get a share price drop.

[captainfatcat] 11/10/2018 20:50

New interview with Paul Baay from Proactive investor, just seen it posted on the lse site

[highly geared] 11/10/2018 20:01

With a healthy POO environment ( Brent at $80) and assuming a 9 month increase to 3000Bopd and with net backs $40-$50, gross profits will be pushing £30 million annualised. Even with the modest debt and reinvestment into gdrilling, the market cap is ludicrous.

If Ortoire comes up trumps, what value then?
It’s hard to see why we’re below £50 million market cap on the back of today’s update. We have accelerated and proven production, operational excellence, great management, a buoyant oil price market and healthy P2 reserves.

[mr. t] 11/10/2018 19:10

Mount Teide, ZENGAS, thank you for sharing your insight.

Amongst all the positives of today's announcement there was one thing that caught my eye:

"FR-1792 and FR-1793 continue to be optimized following their initial May 2018 completions. FR-1792 was placed on pump on October 2, 2018 and is producing at a field estimated rate of 85 bbls/d. The well has averaged 110 bbls/day and produced approximately 16,900 barrels of crude oil since being placed on production in early May. FR-1793 was placed on pump on July 26, 2018. "

In 9 August's update, TXP said:

"FR-1792 is currently flowing up casing at a field estimated rate of 92 bbls/d. The well had an initial 10-day average production rate of 220 bbls/d and a 30-day rate of 193 bbls/d. When the rate and pressure in the well allow, the Company will run tubing and if necessary, place on pump. FR-1792 has produced approximately 12,560 barrels of oil since being brought on production in early May, averaging 140 bbls/d since completion."

Production at FR-1792 had reduced to a respectable 85 bbls/day after 92 bbls/day in August and an excellent > 193 bbls/day in the first 30 days back in May. Is this typical - high initial volume followed by a quick decline and then more gentle production reductions?

[captainfatcat] 11/10/2018 18:58

MT thanks the info about STP being based quarterly and credits not being carried over was indeed helpful.

[mount teide] 11/10/2018 18:31

Going back over my notes, i'm reminded that the two wells on the Coora 2 Block mentioned in today's update that found the Upper Cruse Formation uneconomic were part of a minimum work license obligation to investigate the potential of this Formation - the primary target was the Lower Forest Formation for which an application to move to the Forest formation in both wells has been submitted and operations will commence on receipt of the customary regulatory approvals.

RNS - Nov 2017 Operations Update:
'Two wells will be drilled on the Coora 2 block from a single surface location with downhole targets in two separate fault blocks. The primary target in both wells are oil sands in the Lower Forest Formation, however both wells will be drilled to investigate potential reserves identified in the Upper Cruse Formation at depths of less than 4,000 feet. These two wells will complete the Company’s minimum work obligations on the Coora 2 block for the period ending December 31, 2020.


So, the estimated current production figure of 2,015 bopd is largely being generated as a result of new production from the six of the fourteen 2018 wells since the contribution currently from the Coora 2 wells is negligible(less than 20 bopd) until the primary Lower Forest Formation is brought into production. Effectively, the current production figure has further contributions to come from the two Coora 2 Lower Forest Formations in wells co-370&371, together with a further six 2018 wells still to be drilled before year end.

[mount teide] 11/10/2018 17:24

cfc - 'Focusing on using cash to build revenue rather than pay off debt looks to minimise the effects of STP (still don't fully understand how actually this is implemented).'

Understand(please correct me if anyone knows this not to be the case), SPT is calculated and billed quarterly - and can be offset by credits given to any new capex for drilling that commenced in that quarter only.

So, an annual programme of 12 wells spread out evenly throughout the year would attract a much lower SPT annual bill(if any) than being completed over say 1-3 quarters - since once the drilling credits in any one quarter are greater than the SPT any further credits from additional drilling are worthless, since they can't be carried over.

Hence, Paul Baay's preference for a 3-5 well a quarter continuous drilling programme to minimise SPT.

[zengas] 11/10/2018 15:36

MT re 3155

With the higher level of production achieved in the space of 10 months and using a similar no of wells going forward on the existing P2 development locations(not the expanded programme the CEO is talking about) we should be closer to 3,000 bopd in a similar time frame.

[tektonik] 11/10/2018 15:23

Wonderful RNS this morning, withstood the sell off this morning and now looking to push on as a result. Excellent news for all shareholders.

[mount teide] 11/10/2018 15:07

L2: 2 v 5 / 19.0p v 21.0p

Four out of 5 MM's have moved up on both bid and offer this afternoon.

[mount teide] 11/10/2018 14:58

To give today's Operational Update some further perspective - during the last 10 months TXP has increased estimated field production by 36.9% from 1,472 bbls/d to 2,015 bbls/day.

28th Nov 2017 - Production Update
Touchstone’s September and October 2017 crude oil production averaged 1,421 bbls/d. The Company’s current field estimated production is approximately 1,472 bbls/d.

Today's Update:
Delivered average field estimated crude oil production for the first nine days of October 2018 of 2,015 barrels per day.


"With the majority of our drilling obligations satisfied, the advantage of having our large diversified asset base allows us to focus on the assets that provide the greatest shareholder returns. We continue to refine exploration prospects on our Ortoire property and are very excited about its future developmental potential." Paul Baay

Reading between the lines of the above statement it would not surprise if one of the two high impact oil prospects known as Ortoire East targeting Gros Morne and Forest Formations were under consideration for drilling in 2019 possibly in lieu of one production development well next year.

Since the prospects have 2,000 bopd potential and estimated terminal depths of 5,000ft - 6,000ft and, may well be similar in cost to the current average cost for infill wells - all drilled in the range of 4,500ft - 6,500ft.

These Ortoire East oil targets are defined in part by oil bearing legacy wells and are analogous structures to offsetting pools - the 60mmbls Navette oil field is nearby.

[awise355] 11/10/2018 14:36

Buys are creeping in, could be a good finish to the year, also the detail on each particular well is impressive, full transparency, it feels as though Paul is trying to spell out to us the optimisation techniques and how the bopd will improve