Touchstone Exploration Share Discussion Threads

[che7win] 19/12/2024 11:27

Nice, everything I've been saying.And he's clearly holding back what he can say until he can get the deal over the line.I bet the tin eared and naysayers will still say it's not completely debt funded, but some people just can't be helped.

[captainfatcat] 19/12/2024 11:27

Thanks for the heads up. Shared on discord now also.

[lauders] 19/12/2024 11:05

I see a new interview has been released:

[che7win] 19/12/2024 10:34

Dunder,
Your comment “Thanks KS but I initially inferred it would be free cash flow not tied up in never ending drilling to eventually, say in 2030 (??!!), leave something for "us"?!”

You seem to be inferring that we should take a different path from every other company on the market and not grow revenues from here?
Just ignore the 229 targets identified and return the current cashflow to shareholders via dividends?

You don’t put any weight to the value added by growing revenues and cashflow each year?
By continuing to increase revenues which have doubled in past 9 months?
Or funds flow doubling?

Would you not be better buying in a stalwart if you want income?

[king suarez] 19/12/2024 10:24

1) Forecasted accordingly in the sense of more conservative production rates
2) 2 drills in Q1, 2 drills in Q3 - I suppose they could say exact months etc?
3) Cascadura is still early days - they got surprised by an oil find in the last well - there is also great variability in the production profile of the limited wells drilled to date, so makes sense to provide a wider range of forecast at this early stage?

I'm not sure what you want exactly? Precise dates and rates that they fail to hit so you can beat them with a stick for missing?

If they don't become more reliable over time with forecasts/dates then you have a good point, but it's v early days in exploiting the assets - yes you will lol at 'early' as it's already years behind schedule, and yes I will agree with that comeback, so I pre-empt it.

The management aint the best, but the assets are good. It's why I'm here.

[dunderheed] 19/12/2024 10:15

Forecast accordingly?! Lol. Why haven't they supplied us with the timings that drove their estimated average rates for 2025 then?
They've forecast such wide average profiles it personally indicates to me they don't have confidence in the well productions or timings and still allows for "obfuscation", IMHO.

[king suarez] 19/12/2024 10:03

You won't get 'free' cash flow at this stage in the company's plans unless you want zero growth?

"So......basically, Gonzo is going to (or already has) sunk the company in debt."

Nah, disagree. The debt roughly equals the cost of infrastructure that is generating the $23m of cashflow for next year. It's at a relatively low level ratio compared to cash generation now.

Yes, they got it wrong on long-term flow test results. This has been gone over a million times - thus the wall of cash has been smaller and not comes as quick. Again, this has been gone over a million times.

NOW they have more reliable data on decline rates etc and have forecasted accordingly. It is what it is. PB was 'optimistic' and 'naive' or a total bullshiner - probably somewhere in between.

[11_percent] 19/12/2024 09:55

So......basically, Gonzo is going to (or already has) sunk the company in debt.

[dunderheed] 19/12/2024 09:50

Thanks KS but I initially inferred it would be free cash flow not tied up in never ending drilling to eventually, say in 2030 (??!!), leave something for "us"?!
No matter what can be "said" here, justifying previous laughable forecasts, most investors who took notice of these "wall of cash" comments will be desperately disappointed, yet some on here still happy clap the "caliber" of the (obfuscating?) management team, lol!! All IMHO.

[redartbmud] 19/12/2024 09:47

KS

That is the script.
Regrettably the CEO no longer has any street cred.
He hasn't stuck to the scrpit before, will he now?

red

[king suarez] 19/12/2024 09:40

"With all the talk about debt, I’m just wondering just when this wall of cash will come flooding in that covers all of this, what about the revenue from our production?"

Current production is both paying down the debt (at $1.5m per qtr) AND providing the $23m to fund next years capex budget in addition.

The $23m funds 4 wells at Cascadura that will increase cash flow thereby enabling both accelerated production growth (even more cash for 2026 drilling) whilst continuing to pay down the current debt commitments at $1.5m per quarter. The increased production from the 2026 drilling from the increased cashflow in 2026 from the 2025 drilling will then enable even more drilling in 2027 to increase production even further and continue to pay down the debt. The increased production from 2027 will... etc etc etc.

Brick by brick.

[dunderheed] 19/12/2024 08:49

You're missing the point, never rely on what Gonzo says!!

[eggchaser] 19/12/2024 08:42

Sorry all - playing catch up. With all the talk about debt, I'm just wondering just when this wall of cash will come flooding in that covers all of this, what about the revenue from our production? What am I missing?

[sleveen] 19/12/2024 07:29

Sleepy

Thanks , so $32 +$10m + $23m = $65m, essentially the TXP market cap.

Even worse then.

[sleepy] 18/12/2024 21:37

Their November guidance shows 2024 year end net debt at 32 million and their preliminary 2025 guidance shows 30 million at year end

[sleveen] 18/12/2024 17:30

From Q3 figures that still leaves circa $24m debt on the balance sheet +$10m + $23m.

[john henry] 18/12/2024 16:45

Sleveen you conveniently forget the $7.5M of debt they've paid down hence debt level end of 2025 will be less than end of 2024

[sleveen] 18/12/2024 14:33

Nobodies arguing that the CB isn't beneficial to all concerned.

The scepticism is around TXP's current debt level + $10m + $23m, in total this is close to TXP's market cap.


There must be an equity raise of $7-10m.

[che7win] 18/12/2024 14:25

kaos, King Suarez - post 38823 addresses your question perfectly.Just as Central Block is a derisking purchase, so would TRIN have been in a similar manner.The Central Block deal is very, very advantageous for TXP.It's very, very (very?) advantageous for Heritage.It's very advantageous for Shell.Only because of the caliber of TXP leadership has this deal been possible. It's an absolute gem at a steal.I'll let you work out why.

[king suarez] 18/12/2024 13:45

Agreed 2yr+ debt would make the deal less risky <2yr would be a little suicidal!

[redartbmud] 18/12/2024 13:45

Interesting answers.

The truth will be somewhere in between.

A broader revenue stream. from more than one source, a good percentage of which is steady and reliable obviously stabilises the business.
Debt repayments are fixed monthly.

If the script is anywhere near accurate, and if they are able to stick to it.
BUT past history says they can't and don't.

Cash starvation = inefficiency. Inability to do things that ultimately improve cash inflow.

The fuse is lit.

red

[kaos3] 18/12/2024 13:34

KS - agree if the new debt duration is the suitable
hence I put it into the capital letters

it has to be over 24 months imho
and

thank you for your reply

[king suarez] 18/12/2024 12:43

If they paid for the Central Block entirely from debt, then at $4m a qtr of cashflow on steady production (already declined gas rates) it pays for itself in under 2 years, even including interest on debt. Doing that deal makes the company MORE secure, not less imho given the cash flow to debt cost ratio.

Right now if there were Cascadura problems they would have zero spare cash flow to pay down current debt. With the Central block acquisition, even with additional debt, they would be in a better position to cope financially than without it. It's a cheap and highly accretive deal. They will now have asset diversity and cash flow diversity.

[kaos3] 18/12/2024 12:29

che7 - what would be the margin of safety if we take on additional 20 mil debt - taking into account present and bought production, confirmed decline rates, DEBT DURATION, cost of running the business, replacement drilling, EGS costs and so on

almost none imho
with enough time/duration it gets better
operational and geological execution has to be almost perfect

enter txp leadership, BOD level of excelence

[che7win] 18/12/2024 12:22

Yes, many times.Here, growth is being managed alongside cashflow income, which has tempered expectations.The company however has a good track record of managing the expenditure according to cashflow.And that cashflow on operations is rising. The infrastructure is complete.The Central block brings another 4 million cashflow after projected interest costs per quarter. I'm comfortable with their cash management.