Touchstone Exploration Share Discussion Threads

[che7win] 16/1/2018 14:25

Sold some TRIN to add here.

[brasso3] 16/1/2018 13:57

David & Monique Newlands crossed the 3% threshold. Looks like this was back in December though. :)

[che7win] 16/1/2018 12:10

Buffy,
yes, pretty good for a £16m market cap, should be double that IMHO.

[buffythebuffoon] 16/1/2018 11:54

Why don’t you leave it there rossannan?

You’ve made your point.

You’re bothered, I’m not.

Actually, have a read of the whole RNS, slowly, as though you were reading it for the first time.

Buffy

[buffythebuffoon] 16/1/2018 11:43

Brasso, our netback for the quarter to September 2017 was US$24.46pb

Looking forward.... on current average production of 1492bpd that gives us a profit of over US$13.3m/£9.7m for the year at that rate.

Our current market cap is under £20m.

Of course, that rate will be history by the end of the summer.

Buffy

[phowdo] 16/1/2018 11:23

They state Nov sales as 1536 and Dec sales as 1337 (for a average of 1436 bbls/day)
They state November and December production average is 1435 bbls/day
They state there are now 2800 bbls extra in storage which is 90 bbls/day for December.

How can production equal sales when inventory builds?

Something doesn't quite add up, hence the statement about ambiguity.

Had they presented the production and sales figures for Oct,Nov and Dec in a table it would have been much clearer.

[walter walcarpets] 16/1/2018 11:22

A lot of fuss about very little. Nice solid update. Onwards and upwards to 5000 bopd. :-)

[awise355] 16/1/2018 11:03

Is your realised price a bit high?

[grannyboy] 16/1/2018 11:02

I see no ambiguity in the rns...And I'll be looking to top up, will wait to see when it bottoms out..

[brasso3] 16/1/2018 10:55

At current oil prices TXP will turn over ~$40m - $50m CAD in 2018.

1750 BOPD x 365 x $65 (CAD) = $41.5m

If they can achieve 2200 BOPD by Q2 then $50m is a real possibility.

[brasso3] 16/1/2018 10:54

This shows what a massive improvement we have for Q4 with Q1 2018 likely to show similar gains:-

[che7win] 16/1/2018 10:40

I'm also a very keen buyer after this update.

[brasso3] 16/1/2018 10:32

C7

I think my interpretation (if that is even required) is the same as yours.

I am a buyer at these levels.

[sleveen] 16/1/2018 10:31

Clearly all of the improvement in Jan is due to the recompletions, as there has been no new drilling.

Hence my earlier comment on the significant reliance on recompletions to maintain production

[che7win] 16/1/2018 10:30

TXP

I do agree, the wording could be better, but I'm very happy with this update.

It's as I expected on current production but beating market expectations on the drilling campaign.

My thoughts:

Sales of 1536 and 1337 bbls/d in November and December, which is fine, some sales spilling over into January.
Realized average prices continues to rise, good news.

Initial four wells continuing inline.

Spud of first well this year starts next week.

Current field estimated production is approximately 1,492 bbls/d (based on the previous seven-day average).
This is in line – it is exactly as we have been told to expect – recompletions mitigate current production natural declines – at low cost.
I was expecting current production to be around 1500 bopd, that is exactly what has been stated.

You have to also remember that ¼ of the years recompletions were only done in December. They have said recompletions keep current well production stable, so that is exactly what is happening as shown today. An increase in recompletions this year from 20 to 24 will keep increased production from the new well drills stable. The recompletions cost very little, and give an nice uplift.
They also say this:
“The recompletions were perforated prior to year-end; however, the incremental production impact will not be realized until the end of January once all load fluids have been recovered and production has stabilized. The Company is targeting to perform 24 recompletions in 2018. “
So we can expect a further increase in production by end of January taking us above 1500 bopd once the recompletions have stabilized. So I'm very happy with this.

Accelerated drilling campaign, they have been able to get hold of another rig to drill in parallel this quarter – so production forecasts will be upgraded this year and production increases have been moved forwards.

Compared to TRIN, I think you’ll find TXP are drilling faster and sooner this year and at least 33% uplift in oil production can be expected against 2017.

Valuation wise, these are 1/3rd the price of TRIN but at 2/3rds production levels, TXP is well undervalued at these prices.

I’ve very happy with this update – management are delivering or exceeding on everything they have said so far – and with an increasing oil price.

I think these should be over 20p at this stage, the valuation is compelling.
Any changes in the tax rules would provide a further and immediate uplift.

[brasso3] 16/1/2018 10:21

Phowdo

Can you explain what you mean by that post?

I do not see any ambiguity as clearly the re-completions have impacted production in December by ~100 BOPD. However the January production indicates that we are at record high levels ~1500 BOPD.

[sleveen] 16/1/2018 10:13

Ambiguity rushes in where angels fear to tread.

[phowdo] 16/1/2018 10:10

Certainly some ambiguity in that RNS about December sales/production/inventory.
Comes across as trying to hide something...