Touchstone Exploration Share Discussion Threads

[thebull8] 11/3/2021 15:42

https://media.an ADVFN competitor.com/a/2021/03/Touchstone-Exploration-V2.pdfLink to slides from the presentation if anybody wants to readhttps://www.sharesmagazine.co.uk/videosVideo will be posted here when available

[awise355] 11/3/2021 15:41

No, but really what matters is what is said now, and from Directors Talk and last night the picture is confidently upbeat.

[hiddendepths] 11/3/2021 15:40

Obviously "world class" is miles worse than "best well to date."

[zeusfurla] 11/3/2021 15:34

Hi Spawny I only recall him saying Casca was best well to date. Chinook was 'world class' I think.

[spawny100] 11/3/2021 15:30

I think Paul referred yesterday to Cascadura Deep as being the best well they've drilled to date. I seem to remember previously him saying that about Chinook but I may have misremembered. Anyone?

[ngms27] 11/3/2021 15:28

Yes it's technically possible. Whether they do that or not is another matter.

[davidblack] 11/3/2021 15:25

Question for those with an oily background.

At the moment it looks like Cascadura will be tested first as Chinook has the “Interesting” oil discovery on an extended well test.

Once Cascadura testing is finished I assume that Chinook will be tested for gas at which point the extended oil test stops.

Post that gas testing at Chinook might it be possible to resume the extended oil test if it is producing decent volumes?

Of course subject to government approval etc.

[ngms27] 11/3/2021 15:02

Buffy, what you been smoking?

[buffythebuffoon] 11/3/2021 14:57

True APAD, but the real lesson is not so much whether Parsons is a snake oil salesman, but the fact they weren’t properly funded to develop the asset, which is far better than Sound made it look.

Buffy

[apad] 11/3/2021 14:28

"The real danger is that they diversify / empire build. If they do that I'm out."
Thanks for that, ngms27.
It took me a while to realise that Parsons of SOU was extending glittering promises into the distant future.
So, I have a mantra for TXP. As long as Baay is focussing on taking the present story to a successful completion I can stay with it.
apad

[king suarez] 11/3/2021 14:19

Dividends would be nice, but I will have to change brokers to avoid the 25% withholding tax, unless the company can change to a UK incorporated parent entity, like JSE are doing.

[king suarez] 11/3/2021 14:13

I don't see them looking to Empire build - there are years and years of low cost exploration drilling targets in this highly prospective block, that they know well, and are increasing knowledge of - what other targets are comparable? I think this acreage is best 'bang for your buck' the company are likely to find. PB has given no indications at all that they will look to diversify or take on additional licences nearby - in fact he's stated the opposite on a couple of occassions?

I would have no problem with them taking on $30m - $50m of debt, hypothetically, to provide a bit of a buffer and ensure development drilling is done as fast and optimally as possible and I do expect something like that will probably happen - it would be all be repaid within a year quite easily I think. PTAL just raised $100m to fast-track development, for example, albeit they have higher CAPEX requirements than TXP.

[captainfatcat] 11/3/2021 14:09

Certainly love to see a dividend announced maybe in 2022 after the wall of cash arrives. But my gut feeling is they will have sold the company before we see the first dividend.

I would however be very happy if that gut feeling turned out to be wrong.

[davidblack] 11/3/2021 14:05

Even if that’s just optioning the neighbours ground?

Royston for one looks like it goes over the northern boundary.

[ngms27] 11/3/2021 13:56

The real danger is that they diversify / empire build. If they do that I'm out.

[junky monkey] 11/3/2021 13:49

Bull, that's why I did the finger in air math. The 69 ish million is more than the finger in air math by quite a bit so this covers other contingencies like well pads, roads, and top side equipment, so I think we are far enough in front of the curve not to worry about it too much. If there is a need, we can take some debt, or slow down a bit to let the curve catch up again. Paul is the right man for these balances, has shown to be decent player at this game. As the other production comes online it will be as Paul stated earlier - difficult to spend all that cash, and so this is where the dividends can really get kicking off. I seriously hope we can manage to do this without selling out too early or at all even.

[homebrewruss] 11/3/2021 13:44

ngms27 I meant start producing any gas once the gas pipeline is in place but until then just oil

[thebull8] 11/3/2021 13:38

Cash flow is easy. $6million per year for every 10mmcf of gas. Condensates probably around $15-$20 per barrel (25% discount to Brent) Coho will flow at 10mmcf per day - $6million Casa should start with two zones at around 60mmcf per day combined - $36million Condensates at around 5k barrels per day - $27millionCombined $69million per annum without oil or Chinook or Royston or additional development wells

[homebrewruss] 11/3/2021 13:38

@ngms27 yes if that's doable once the pipeline is connected up.

[ngms27] 11/3/2021 13:32

Why not dual produce?

[homebrewruss] 11/3/2021 13:30

From Chinook I'm hoping for a gas result that could sustain 25-30mmcf/d production(plus maybe liquids) and hopefully commercial oil from the extended well test.

If they can produce a reasonable amount of oil from this Chinook well then that gives them a lot of flexibility and they could put another well or two into Chinook potentially for earlier cashflow from the oil, test the subthrust at the same time and then maybe convert those wells to gas producers further down the line.

[ngms27] 11/3/2021 13:28

Highly Geared agreed, but bet they don't...

[buffythebuffoon] 11/3/2021 13:27

Paul won’t fund exploration with more equity, but he’s clearly open to using debt.

Obviously, limiting us to two rigs will limit the rate at which we progress.

I’d love to know when he envisages selling out. I’m sure he has a view of the likely window.

We’ll get better at predicting the timing of events the more we drill; but you need to spend the money to improve the visibility, as any project manager knows.

Buffy

[highly geared] 11/3/2021 13:16

They need to start monetising the assets to generate substantial free cash flow to fund the broader 5-10 year plan rather than piling on more debt. Priority is to get Coho on production and get Cascadura on stream this year from the 2 wells drilled.

Chinook a bit of an unknown , but ditto , if oil/gas commercial at scale.

If , as expected , Royston, hits commercial gas, then multiple drills to fund out of cash flow from early 2022 with infrastructure tie ins to Cascadura, Chinook and Royston.

No need until 2023 to drill elsewhere and if they do, fund it from cash flow rather than more debt.

[junky monkey] 11/3/2021 12:46

Finger in air math .... 4 mil usd well takes 2 months so 2 mil/mo and the west side drilling was 1 mil usd and maybe 14 days to drill and a week to move so 1.3 mil/mo for a total of 3.3 mil per month or 40 mil per year.

Other capital to keep company running is coming from current production plus a bit of profit.

We are cashed up and have debt facilities that can be drawn on. So I think with the funding and the wall of cash coming this will be self funding, or adjusted to be self funding.

Paul did say in interview that 3 simultaneous rigs was too much on the island, and that the CFO would also stick his head in the door and say that we don't have the money for that.

Don't have the projected production figures in my head for Casc and we don't know about Chinook yet, Chinook is 0,5 mil USD a month, so we need 2.8 mil / month and that should be within limits in the finger in air math. Production will increase with more drilling so I think we are ahead of the curve and have full control over the curve so as Paul said in the interview, don't need any institutional money from capital raises. We don't need any more capital raises, and shouldn't do them either. Rather go a bit slower at times if need be and not dilute anymore.

Some of you who like to play with numbers and have sharp pencils should take a crack at the cash flow situation through the end of the year and 2022.