Touchstone Exploration Share Discussion Threads

[homebrewruss] 05/3/2021 10:26

We'll probably find out on Tuesday but I'm leaning towards the 'structurally up-dip' section to be laterally from Chinook and we know that Cascadura is about 1km from Chinook.

Edit: actually just read it again and maybe it's both 1000ft laterally and vertically :)

Look at slide 10 and 11 here from a previous presenation with the structural high for the deep beneath Cascadura:


This from today's RNS sounds exciting 'Future targets structurally up-dip from Chinook-1 hold tremendous potential.'..

It's interesting reading the RNS again. I did ask a question on here a while back on what people were expecting from the tests and this isn't exactly it (at least at this stage) so people are a bit thrown.

[lazarus2010] 05/3/2021 10:20

Seems to me a number of posters here are either unable to read or have selective eyesight.

The zone with water is not one of the expected gas play zones, it's in the previously unknown zone, likewise the zone being put on an EWT is not one of the expected gas zones. Coming updip by 1000' may result in additional pay. My take here is that the strata dives down deep and they intersected the deepest part, filled with water, they will therefore track along the formation as it rises (ie updip) and target the same formation at a shallower level where the oil should/might have migrated to. This would be based on that particular formation having a trap and seal all the way along.

The test equipment in now in Trinidad and will be getting set up now all approvals are in place. Testing set-up to commence in 10 days at Cascadura once equipment arrives on site. They are unlikely to flip flop between Casc and Chinook and will carry out all testing at Casc, leave Chinook on EWT and then move test rig to Chinook after Casc complete and that should mean maybe 30-40 days EWT. That's just my guess, maybe the EWT will go very well and they decide to change strategy and use rig on Chinook between testing different zones at Casc...time will tell.

If they complete the Casc testing, then there's no reason not to rns the result, whereas if testing both Casc and Chinook at same time we might have had to wait much longer.

Permits for connections to Casc and Chinook are not being delayed by this, so the basic timeline to first production is still Q4 2021 (will probably slip to Q1/2022 but that was always my expectation based on delays to Coho and general Covid delays on all such projects).

Basically yes the test equipment and testing have been delayed (which I think should have been rns'd) but there is no overall delay to initial production and we potentially have additional light oil to be targeted. What's not to like in terms of the expected long term share price??
aimho, comments / corrections welcome, it's just my take on things.
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-- Equipment has arrived in Trinidad to enable testing of the main gas bearing zones in the Cascadura Deep-1 well, where significant hydrocarbon accumulations were reported in December based on drilling and wireline logging data.

-- Testing of the potential gas bearing sands in the Chinook-1 well will commence following the extended crude oil test.

-- We continue to target the second quarter of 2021 for initial Ortoire gas commercialization, with final regulatory approvals for the tie-in of our Coho-1 well received and construction underway.

-- Working with the National Gas Company of Trinidad and Tobago to commence regulatory applications to tie-in Cascadura and any potential Chinook production volumes, with the objective of achieving initial production prior to the end of 2021.



Operational Update

Well Testing

Touchstone has yet to test the targeted gas bearing zones in the Chinook-1 and Cascadura Deep-1 exploration wells due to unavoidable delays associated with third-party equipment including the natural gas testing unit. However, we are pleased to report that all required equipment has now been cleared through the various levels of government organizations in Trinidad and is expected to be on location within the next ten days.

Touchstone has tested two low resistivity zones in the Chinook-1 well. The first test interval was in the lower sub-thrust sheet, which was a previously unknown thrust-sheet where we identified 68 net feet of potential pay based on wireline logging data. During this test, the well recovered trace amounts of 41 degrees API sweet oil along with significant high pressure and high temperature water, which was indicative of encountering a fracture at the base of the formation. With the high volume of water, the zone is considered uneconomic; however, indications of light oil prove the concept of hydrocarbons in the sub-thrust sheet. Based on 3D seismic data, future development locations are anticipated to be positioned structurally up-dip by as much as 1,000 feet from the Chinook-1 well to evaluate the sub-thrust sheet in an optimal structural position. The Company has permanently abandoned this lowermost zone and completed a second zone in the Herrera formation which encountered 35 degrees API sweet oil and is currently being configured for an extended oil production test. We anticipate conducting the first natural gas test at the Cascadura Deep-1 well while the Chinook-1 well is on the extended oil production test.

James Shipka, Chief Operating Officer, commenting on the Chinook-1 well tests, said:

"This is an encouraging start to the production testing program as it confirms the presence of hydrocarbons in the sub-thrust sheet and will allow for further up-dip drilling targets based on available 3D seismic data. The sub-thrust sheet was not one of the original Chinook-1 well targets, so the confirmation of hydrocarbons in the deep section is very positive. Although the lower zone was considered uneconomic given the high water cuts, the reservoir displayed potential as fluid flowed to surface at over 2,200 bbls/d. Future targets structurally up-dip from Chinook-1 hold tremendous potential.

The second production test is also very exciting and could result in numerous development locations. The presence of oil in the intermediate section reaffirms that the hydrocarbon system in the Herrera is extensive and variable. Our extended production test will determine if this zone is commercial in Chinook-1 before we move up in the wellbore to our next test which we anticipate being a natural gas zone immediately above the oil. It is unfortunate that due to third-party issues beyond our control we have had to wait on the gas test equipment; nevertheless, valuable data has been collected in the interim period.

The multi-target project at Ortoire is still in the early stages. The oil discovery at Chinook-1 adds another layer of opportunity that we have not previously forecasted. For reference, the offsetting Barrackpore oil pool has over 60 wells that have produced approximately 18.7 million barrels, averaging 300,000 barrels per well with oil ranging from 27 to 30 degrees API. "

[buffythebuffoon] 05/3/2021 10:18

Hi ngms27,

“ Has anyone also noticed that the previous communications around Chinook do not mention Gas but say Hydrocarbons.

It was my opinion that we were led to believe it was Gas but it's now my opinion the BoD always thought Oil was either likely or a good possibility.”

I know where you are coming from as PB as suggested they maybe shouldn’t predict!

However, did he not say today: “ Our extended production test will determine if this zone is commercial in Chinook-1 before we move up in the wellbore to our next test which we anticipate being a natural gas zone immediately above the oil.”


Buffy

[swanvesta] 05/3/2021 10:17

"there will be no oil laterally from this location unless sealing faults are in play between locations and the water miraculously only affects the single fault block."

Surely that depends on how updip that 1000ft lateral high is? They have a solid water drive below oil, is what I take from the announcement. And they're currently too close to the OWC to produce economically.

[awise355] 05/3/2021 10:15

From memory Chinock was an oil play

[ngms27] 05/3/2021 10:11

Guys, there will be no oil laterally from this location unless sealing faults are in play between locations and the water miraculously only affects the single fault block.

It's clearly 1000ft closer to sea level...i.e. Structurally up-dip

[mount teide] 05/3/2021 10:08

Still feeling groggy from the side effects - headache, muscle cramp, aching joints and mild fever - from vaccination yesterday, so been a little late getting up to speed with the highly encouraging content of today's update.

The news comfortably underpins the current valuation and while the delays to testing at Casca Deep and Chinook are frustrating, changes little in terms of Ortoire's upside potential over a 3-5 year view.

Securing the services of a very high specification drilling rig should have a major positive operational impact going forward, as the existing equipment on T&T is continually working towards/at the limit of its technical capabilities drilling the deeper structures on Ortoire.

Taking Casca and Chinook(assuming commerciality), into early production requires upping the pace of the Ortoire drilling programme substantially, compared to that achieved to date - something this new heavy duty rig will address, with its guaranteed 4 month exclusive period each year.

Overall, if like me, you're taking a 3-5 year investment outlook with TXP's very exciting and highly material Ortoire E&P programme, then today's news is further conformation of the outstanding capital growth potential on offer targeting these massive Herrera Turbidite structures on TXP's sweet spot acreage - as the exploration and production development cost of the discoveries made to date(and any in future), are more than an order of magnitude lower that BP and Shell's T&T offshore O&G E&P programmes targeting similar size prospects/structures, and can/will be funded by cash flow going forward.

Patience is an attribute that is deeply unfashionable today amongst a highly significant section of the equity investment community, despite proving the test of time over many decades in terms of the generation of capital growth.

The Ortoire Herrera Turbidite story remains very much in tact - I for one expect to be here in 2-3 years time, probably at a very much higher s/p, waffling on in a similar way about the next 2-3 years.


AIMHO/DYOR

[ngms27] 05/3/2021 10:08

Has anyone also noticed that the previous communications around Chinook do not mention Gas but say Hydrocarbons.

It was my opinion that we were led to believe it was Gas but it's now my opinion the BoD always thought Oil was either likely or a good possibility.

[swanvesta] 05/3/2021 10:07

A Q for the experts... Looking at the language closely, are they saying they plan to test this sub-thrust as part of Chinook development? Hence they speak of development locations. Which does suggest the 1000ft is lateral distance. OTOH isn't 1000 ft rather close for a gas field with good permeability?

"Based on 3D seismic data, future development locations are anticipated to be positioned structurally up-dip by as much as 1,000 feet from the Chinook-1 well to evaluate the sub-thrust sheet in an optimal structural position. "

[buffythebuffoon] 05/3/2021 10:06

We’re all on the same side DB.

If it’s bad for traders, then tough.

I’m sorry, but they should not be a consideration in my view. Paul’s job is to run the company. We all know he wants what we want, and we all know what that is. The internet has created an information hungry generation, and the pre internet generation are being infected with the same lack of perspective.

Buffett bemoaned the US’ regs requiring quarterly returns, after decades of annual returns, then interims and finals.

Gamblers going to 100% on TXP with IG hoping they get the timing right, people agonising over every phrase in an RNS. Ok, it’s a bulletin board and we have to talk about something, and people like to read about it as they dream about the wealth to come, but let’s keep some perspective.

Many of us know Paul plays some cards closer to his chest than some would like. I take the view that he’s done brilliantly so far, so give the man the benefit of the doubt.

Buffy

[11_percent] 05/3/2021 10:06

Hk,

Everythng I have said about PB and TXP planning has proved to be well founded.

I posted that the well test equipment was still on the BP contracted rig. I was correct.

[swanvesta] 05/3/2021 10:03

DB, lol, you "choose not to be blunt" but actually you're being blunt AF. Have you had a career in politics by any chance?!

[herschel k] 05/3/2021 10:03

KS11p won't care about facts.He talks about PB shooting from the hip but he does it himself constantly on every share he owns and wherever it will help the position he has taken.

[galarse] 05/3/2021 09:59

I remember PB stating that it's all about timings and that there will be a bumps in the ride ahead. I guess this is what he meant.

[11_percent] 05/3/2021 09:58

KS,

Its different test equipment.

I posted way back the test equipment was not available.

I emailed IR, for clarification, but got no reply.

The guy on LSE said the sme thing, although I think he was in contact with PB (not sure if how) and PB said they were using different test equipment. Its also in LSE posts.

[zeusfurla] 05/3/2021 09:56

Whilst I am a little annoyed at Paul for not being more forthcoming with progress and in being somewhat inconsistent with messaging the bigger picture is the assets are still there and will produce, although we have not yet got certainty on their size (which could be much larger). I wouldn't punish myself by selling because I am a little annoyed with Paul. That makes no sense. There are a lot worse ways to be annoyed with an AIM CEO. Frustrated but just move on. By the time we finish next week's webinar I suspect the excitement will be beginning to build again., I am looking forward to it.

[11_percent] 05/3/2021 09:54

Basically...we dont know when will we will get well test results now.

[king suarez] 05/3/2021 09:54

"The test equipment that they were going to use is still on the BP contracted rig. Will be there till May at least."

Huh? We are told in the RNS this morning that it is arriving within the next 10 days, no?

[11_percent] 05/3/2021 09:47

I said this a few times.....PB needs a decent planner.

He shoots from the hip...and throws out time lines that they no chance of achieving.

The test equipment that they were going to use is still on the BP contracted rig. Will be there till May at least.

I am now wondering when Coho will produce.

[bernieman] 05/3/2021 09:46

When they didn't RNS the Coho permit approval, IR said they didn't see it necessary to announce as it was inline with the timings PB had previously given. It was the same q&a he said 1st Feb for testing - so they can't have it both ways. PB had always been straight and frank in the past. Delays happen, but clearly letting shareholders believe everything is on track is misleading and loses trust.

[hiddendepths] 05/3/2021 09:46

Got out of bed the wrong side today DB?

[homebrewruss] 05/3/2021 09:43

On the flip side news has been managed well in the past to enable placings at decent prices for instance initial Cascadura results were released just before a placing with full results released after the placing.

Timing and delays have always been an issue but ultimately execution has been very good to date.

[buffythebuffoon] 05/3/2021 09:41

Good God, some of you like to make things complicated don’t you?

I read it once and took this away:


GAS testing equipment not in place yet.

Hydrocarbons detected in a sub thrust sheet, a zone not previously known to us to have confirmed hydrocarbons.

Oil to surface with lots of water, but assessed at 2,200 barrels per day

Updip 1000ft of a zone that has hydrocarbons is excellent news wherever it is, as long as it’s in our licence.

Giant third rig to be available late 2021.

It’s a Friday RNS and it’s a good one.

Buffy

[davidblack] 05/3/2021 09:38

As I said now becoming economical with the truth. That then begs the question what else might not be what it seems, both good and bad?

[stockport loser] 05/3/2021 09:36

I disagree. Why at start of Feb tell the market its going to be another 6 weeks? Imagine the share price reaction? Do you really want that? PB is savvy and plays the market well. Let him get on with it.