Touchstone Exploration Share Discussion Threads

[dunderheed] 05/6/2021 08:04

Thanks Pro.

[pro_s2009] 05/6/2021 08:03

DH, I dont know, but next time I am in comms with Paul I will ask that question for you.

Alternatively you might like to email to Stacey and ask her as she deal with the PR side.

I will send you her email by private message.

[pro_s2009] 05/6/2021 08:01

thebull8 - which is what is making me think.

Surely a hedge fund is not really going to short TXP for 9% (18 million shares) at the risk of Royston coming in and they will then lose 18 million GBP or more as the share price rockets on good news.........

The risk reward is just not there really.

So why else would someone open a large short and keep drip adding to the short to suppress the share price.


The obvious one is of course a hostile bid is being lined up. TXP would never have been taken over before Royston, simply as Royston completes the license commitment on Ortoire. Once Royston is drilled (along with the seismic) license obligations are done.

At this point - before the wall of cash - is imo the most likely time a hostile bid will be made.

Why have Shell played hardball over Coho ? Suppress the share price ?

Why has a hedge fund taken out a 9% short position on TXP when they dont need a placing ? Suppress the share price ?

If they can keep the share price low and suppress further, then post Royston they can make an offer which will be well above the "3 month weighted average share price".......because of course, they have been suppressing it down for months.

Someone tries to pick it up cheap with an agreement already in place to sell to Shell in 12 months time for a certain profit ?

Who knows......but its the most logical explanation I can see for why someone would be short 9% of a company that does not need money and has massive cash flows going to commence in 2022.

[thebull8] 05/6/2021 07:34

If you have a considerable sum of money to invest I suggest you do some proper research before investing - this isn't AMC. 1st quarter results show TXP have cash on hand of $15.4million and $12.5million to drawdown on existing debt facilities. CEO Paul Baay stated in the last presentation they have scope to increase this if needed. TXP currently produce around 1300bopd with a netback of $22 (based on $59 oil) which gives $10.4million in free cash flow. The Ortoire block is where TXP differs from most small cap oilers. We've already had huge exploration success here. TXP signed a contract with NGC to provide all of the gas from the Ortoire block for a fixed fee of around $2.50 per mcf. As part of this deal NCG pay for all the pipe work which means, unlike other small O&G companies, we don't need a huge amount of CAPEX to get the project up and running. As soon as NCG hook up the pope work and the gas starts flowing the money basically goes straight into the bank account - it's almost like a royalty company in that respect. Some numbers - $2.50 minus 12.5% royalty for government and $0.05 capex costs gives around $2.15 per mcf. Coho will flow at around 10mmcf per day(or 10,000mcf per day) so this is $21,500 or $7.8million per year EBITDA. Cascadura will flow at around 60mmcf per day (or 60,000mcf per day) to start so this is $129k per day or $47million per year EBITDA. Once more infill wells are added production will be 200MMCF per day which is $430k per day or $156million EBITDA. Then you have condensate oil produced as a byproduct from Cascadura. At 60mmcf we should get around 1300barrel of condensates per day. These achieve a higher netback at around $44 per barrel which gives $21million EBITDA. At 200mmcf you're looking around 4200barrels which is $67million EBITDA So we have free cash flow of around $86million with the CONFIRMED drilling that we have already done. Add in a few more infill drills at Cascadura and you have $241m EBIDTA. Placing or no placing I'm sticking around for the real value. Even if there was a placing and this short was closed with placing shares...would mean all the placing shares instantly churned and no more selling to hold it down

[dunderheed] 05/6/2021 07:21

Can someone confirm for me please?
When does the fixed price period start for "gas sales" to NGC, date of signature of contract, a pre agreed date within contract or start up at pre agreed minimum volumes?
Thanks for any inputs.

[pro_s2009] 05/6/2021 03:56

FlanGold.

What you do is up to you - you make your own choices and live and die by them.

The company has cash inflow - around 1300 bopd current production.

The company has cash in the bank.

The company has a debt facility which is mostly unused - and can be expanded up to 50 million US$.


So no, they dont need to raise any money.

They plan to drill around 4 wells in the South West in Q4 2021. These will add around 200bopd each.....plan is to end the year at 2000bopd oil production. Each well will be 1 million dollars a go, and will be funded from cash and or debt facility.

The company is having ongoing discussion with the NGC about the routing of the Coho gas line. Once agreed pipe will be laid and production on tap in around 60 days. This will add around 500K US$ a month to revenues.

The company is currently working on an all encompassing Cascadura development approval, which when complete will allow them to drill and develop Cascadura with no further delays or approvals needed. Cascadura is a monster and will start with around 60mmscf per day gas flows and by year end 2022 will be 200mmscf/d. That is the wall of cash coming in. Likely online Q1 or Q2 2022.

The company has said they are fully funded to production from Coho and Cascadura and will chop and change their exploration drilling to suit, depending on cash inflow. This is why currently the exploration drilling at Steelhead and Gaubine and Krakken is now planned into H2 2022.

The company has said they will use their debt facility - which has considerable room for expansion - to fund development drilling at Coho / Cascadura and the South West oil fields if needed.

The company has said, they are not in discussion with anyone about raising funds and forecast their existing cash, cash from operations and debt facility will fund them through to Coho and Cascadura being online.


So......the shorter who currently has I expect over 9% of the companies stock short, is gambling on a placing.

The company is saying they are fine, even if Coho and Cascadura delayed in 2022 it matters not, they will use the debt facility.

So its now a battle of attrition - if the company stick to their guns, preserve cash and deliver shareholder value (which means using the debt facility until Coho and Casca are on line - the shorter will have to buy back 9% of the companies shares in the open market - which will create a superspike (provided Royston comes in good).

Whether you buy or not is your choice.

Personally I hope you dont, because I am being greedy and am constantly buying the weakness and building my stake further, and if you start buying it means the stock I buy gets more expensive.

Your money, your choice, do with it as you wish.

[flangold] 05/6/2021 03:12

Still no clear answer to my question...I have a considerable sum to invest - is now a good time to invest or is it better to wait until after any upcoming placing?I know some think a placing isn't coming but I can't see how a company with no material cash inflow can fund the activities it wants, in the timescales it wants, without cash from somewhere.

[pro_s2009] 05/6/2021 02:28

Article on the need for more and more exploration in T&T. Highlights how important Cascadura and Royston (if Royyton hits gas) are going to be short term and how, once Covid is no longer causing delays - we should see much faster progress getting things on line.

I think this is already being addressed by the "one approval for all of Cascadura" approach......so that once approved they can go ahead with all the infill drilling they want and its all pre-approved. Same process would apply to Royston then if Royston hits gas.

Fast progress might sound weird given all the current delays due to Covid, State of Emergency, permitting approvals as nobody done permitting for new gas onshore for decades etc....... but all of those will be going away in the months ahead and finally progress should become much faster - basically its in the governments and NGC interest to do so.....TXP will be just riding on their backs then and it will be the NGC chasing up TXP to get a move on.





.

[pro_s2009] 04/6/2021 21:41

HG, the shorter is controlling the price. But they have to close at some point.

For those like me who are long term buy and hold, it makes no difference where the share price is today, next month, January 2022 or June 2022.

This is all about getting the cashflow going, getting the dividend flowing and then drilling the Krakken in Q4 2022.

I have been merrily adding and will continue to add more, let em sell, I will just keep on buying more and adding to the lump that I hold (which is considerable now, I will be catching MT up soon)

[thebull8] 04/6/2021 20:53

I don't think it surprising that we have such a large short in London and the share price struggles until 4:30pm but then does OK once London in closed.... can't fathom why somebody is short 18million shares here and will be so difficult to close that position based on the daily volume here

[highly geared] 04/6/2021 20:46

It looks like the market has decided it will no longer value TXP on future deliverables , as the deliverables ( wall of cash) keep sitting on the horizon and are now perceived as late. The Chinook fiasco hasn’t helped along with the 6 month gap between drilling and test results.

TXP now have it all to do to:
- hook up Cascadura and start delivering the wall of cash
- sort out Coho
- deliver a credible Royston drill and test program

Value will return but I anticipate summer malaise as I cannot see Royston drilling logs before September and test results before October.

[loafingchard] 04/6/2021 20:36

News vacuum? We had an update less than two weeks ago .

Pro , give him Pauls number , this chap needs his hand holding...

[davidblack] 04/6/2021 19:59

Royston shortly and Cruze apparently starting even sooner.

So the news cycle will shortly start again.

A 10 year extension on the legacy licences looks on the cards which might explain why TXP are talking about drilling deeper targets there now.

[leoneobull] 04/6/2021 18:38

I suspect there is some shorter manipulation here. Mind you, the news vacuum doesnt help

[adon30] 04/6/2021 17:21

It’s funny how this placement garbage keeps popping up. Only need to see the finances and oil at a high bringing in regular cash flow to know that is not needed.
TXP would have started on the admin work this week to get the permits for all of cascadura work. Alongside all the other contract work and liaising with NGC. We know the design work is complete.
As Domus has said the work to continue at chinook is ongoing and results will be in a few weeks.
Plus drill about to start at Royston shortly.

Not sure why people need instant completion on everything. It’ll get there when it gets there. T&T suffering its COVID pandemic has not helped TXP but you can’t blame anyone for that. It’ll be a strong stable economy for a long time to come.

[sleveen] 04/6/2021 16:51

1domus

Thanks

[dunderheed] 04/6/2021 16:11

Tb8 thanks for confirming.

[thebull8] 04/6/2021 16:01

No you've posted here for long enough that I know you're genuine whether you've sold or still holding.....it's these new names that have just suddenly started popping up

[1domus] 04/6/2021 15:52

DB, they won’t start testing today. The rig is moved in today. I guess that testing starts next week with results late that week or early the week after.

[dunderheed] 04/6/2021 15:51

tb8 - I hope you're not including me there matey?
I'm long and strong but have my opinions and have a bit of experience on "t'uther side" of o&g world!

[thebull8] 04/6/2021 15:47

Linton doesn't have enough cash to short here! Lost everything on BPC and now expresses his bitterness here against Pro who told him time after time after time after time what was going to happen LOL I do find it strange that we have a 8-9% short float and then people pop up taking about placing etc etc. Wouldn't be the first time on AIM

[lazarus2010] 04/6/2021 15:43

I guess the new posters talking about placings and desperate ramping might be some of those with a vested interest in seeing the share price lower so they can get out of their shorts!!

[thebull8] 04/6/2021 15:39

A lot of "random" people popping up on this thread now with various comment......hmmm

[ballymoss18] 04/6/2021 15:03

Flangold, I really wouldn't base your investments on an bb or a rumour. Stick to the FTSE 100.