Touchstone Exploration Share Discussion Threads

[buffythebuffoon] 16/3/2018 14:38

rossannan,

I don’t think anyone is focusing on reserves. People seem pretty centred on the BOPD figure. In reality, both are important.

The oil price is at a reasonable level. Most of the big players are happy around the $70 dollar level, so I think we’ll see it dance around that figure in the medium to longer term.

I see TXP as a well run company, led by a man who has done it before.

To me, it’s as much a certainty to make good money as anything I own, and it will do it with far less drama, aka volatility, than my other holdings.

Seriously, what’s not to like?

Buffy

[che7win] 16/3/2018 11:07

Zengas, 2000 bopd is only the start and I agree achievable on the next 4 wells.The company is adamant that this is only the start, they have big ambitions.

[zengas] 16/3/2018 10:07

As it is, the reserves grew and stand at 18.5 mmbls P2.

You have to value a company on it's reserves. No point in valuing 2k production if it only had 3 mmbls. It's nothing to do with an increased oil price. You value it relative to where the oil price is, so to say you can't value it on the basis of reserves because of where the price is now is frankly wrong.

£16.5m m/cap only values those reserves at $1.24/b and with the loan 81 cents.
The company is generating more and more cash.

If it proves up another 10-20 mmbls that can't be ignored in the value equasion nor the lessining/paying off the loan. So still profoundly cheap imo.

[zengas] 16/3/2018 08:54

Yes, but it shows the sheer amount of money increasing that wasn't there before over the relatively static G&A and that's the point.

Hopefully we will also see a growing increase in reserves which significantly ups the value level.

[zengas] 16/3/2018 08:31

The $15m loan runs to 31st Oct 2021 (3.5 years). Interest is compounded annually and they start to pay it down from Jan 1 2019 when they pay $810k/quarter. At the end of the term under that payment schedule there should roughly be $11.5m to pay at 31/10/21.

Also the decommissioning libailities are covered yearly and spread over a 25 year term.

Production profile and net backs have been getting stronger each quarter.
Q1 2017 = 1280 bopd and $18.96/b net back.
Q2 2017 = 1335 bopd and $19.56/b n/b.
Q3 2017 = 1437 bopd and $24.46/b n/b.
Q4 2017 = due in the results in 11 days time.

Interesting clue in the Wednesday update which for Q1 2018 saw 1521 bopd for Jan and 1552 bopd for February and 1705 bopd for the preceeding 7 days to 14th March on account of the new production from the latest wells. Imo at least 1625 bopd average for this month of March which may indicate Q1 average production of 1566 for the quarter.

Production has reached 1705 bopd and with 4 wells due to complete by end of next month (see my previous post of circa 400+ bopd expectations) - if successful we might break and maintain the 2,000 bopd level.

Just 1 of the 10 well campaign completed. 4 complete around the end of next month and then a further 5 to drill.

At 2,000 bopd and if net backs similar at $24.46 as in Q3 = $17.8m net back/yr.

The drilling and completion costs including equipment are showing circa $175 per ft/drilled in the latest presentation.

The 'average' well drilled is circa 4,250 feet and using the presentation guidance is circa $750k/well. (12 new wells over 1 year = circa $9m). If oil price/net backs remains stable then the company can really ramp up on those numerous drilling locations and put 3-4k bopd in sight (ie add 1-2k of further production and potentially double reserves).

Despite production, P2 went up 18% to 18.5 mmbo. Presentation states this 'remains conservatively booked from only 43% of the drilling locations' so potentially the reserve level could more than double in addition to the upside from the exploration properties.

129m shares @ 12.5p = £16m m/cap. As progress continues, worth comparing to my post in the header of 6 months ago.

[sleveen] 15/3/2018 16:09

Let's see the cash flow to make the $15m loan appear to be a mere bagatelle

[buffythebuffoon] 15/3/2018 08:55

Good move Mr T. Far better than buying yet more gold neckchains.

Buffy

[mr. t] 14/3/2018 19:17

I bought TXP in my SIPP today. Thanks for the posts on this thread - I've found them helpful.

[grannyboy] 14/3/2018 11:40

Looks like the market is digesting the news today, which was very encouraging...I should think over the next few days we will see some appreciation in the share price .

[mount teide] 14/3/2018 11:08

Highly encouraging update - exceeded expectations by some margin.

Some 9-10 months after drilling, the 400 bbls/d current field estimated production from the four 2017 wells is outstanding.

Current field estimated production of circa 1,705 bbls/d (based on the previous seven-day average) up from 1,500 bbls/d in H2/2017, gives a glimpse of the transformational upside potential of the 2018 10 well drilling and 24 well re-completion programmes.

[zengas] 14/3/2018 09:57

The upcoming 4 wells should all be done imo by the end of next month before we start the next batch.

Looking at the figures from the other wells listed could these immediate 4 wells add over 400 bopd by end of next month and break the 2,000 bopd figure from the current average of last 7 days of 1705 bopd?

Only took 11 days to drill the 5,383 ft PS-602 well from 3rd - 14th Feb and put on pump production 1st March ie three and a half weeks.

The WD-8 well (4700 ft) is spudding in the next 2 days - if successful should be also on production in a similar 3 and a half weeks from now.

That rig then moves from WD-8 to a second well location on the WD-8 block. If same depth then could be on production in 7 weeks from now.

First of 2 wells on the Coora 2 block spuds 3rd week March which must be at the latest around end of next week - 3800 feet - so again possibly on production if successful some 3 and a half weeks later and then a second well from the same location.

The CO-368 with 41ft pay in the Cruse has been producing for 271 days and is currently doing 41 bopd (average high was 52 bopd over that period).
CO-369 from 71ft pay in the Cruse formation had 188 bopd over the first 262 days and is currently above that average.

This year could we also get an almost net 1/5th rise in P2 as December 2017 ?

[sleveen] 14/3/2018 09:03

Q4 2017 financials should be released soon.

That should give a handle on the cash generation v debt.

[captainfatcat] 14/3/2018 09:00

rossanna I think you nailed it on the head. The second rigs impact on the numbers is yet to be felt.

[che7win] 14/3/2018 08:33

Rossannan, Yes, spot on.I see these going into the 20's at some stage. The company doesn't market itself or bombard the market with news either.It's flying under the radar.