Touchstone Exploration Inc (PBEGF)

[pro_s2009]

Feb 2022 figures added.

A bigger increase in February, with 160K additional shares borrowed and short sold.

TXP Stock on Loan (Shorts) from Euroclear (% borrowed from CREST holdings - average)

Jan 2021____0.52%
Feb 2021____1.23%
Mar 2021____7.14%
Apr 2021____8.65%
May 2021____8.79%
Jun 2021____8.74%
Jul 2021____8.49%
Aug 2021____8.45%
Sep 2021____8.39%
Oct 2021____8.37%
Nov 2021____8.37%
Dec 2021____8.72%
Jan 2022____8.49%
Feb 2022____8.64% (9.02 million short - up from 8.84 million in Jan 21)

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Canadian Market shows the short position as of 15th February 2022 has increased by 159,733, so the total Canada short as of 15th Feb 2022 was 706,746

So plenty of downward price suppression pressure is being applied in both London and Toronto.

[pro_s2009]

OTC top three likes



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[pro_s2009]

TXP Presentation on 20th January 2022

Presentation is planned, details and how to sign up on the below link :

https://tinyurl.com/y6e4e2ux

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[pro_s2009]

SeekingAlpha article on TXP

Link below :

https://seekingalpha.com/instablog/41272106-activeeurope/5674359-touchstone-amazing-upside-still-to-come


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[pro_s2009]

WD8 development well drilling is underway

Drone footage in the tweet link below :

Star Valley Rig 205 in action at WD-8, where we are drilling two development wells off a single pad. #Trinidad #Drilling #OilandGas pic.twitter.com/F5YFUA1NWm

— Touchstone Explor. (@TouchstoneExp) December 2, 2021

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[pro_s2009]

First page, for reference.



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[pro_s2009]

Cormark boosted the Target Price for TXP from 4 CAD to 4.5 CAD on 9th Nov following the Royston-1 light oil discovery.

4.5 CAD is 2.64 GBP a share.

https://www.marketbeat.com/stocks/TSE/TXP/price-target/

If Royston-1 gas zone comes in good, we might see Cormark going up to 6 CAD a share target price imo.

Tick tock............

[pro_s2009]

Canaccord raise target price to 200p

https://www.sharecast.com/news/broker-recommendations/canaccord-genuity-raises-target-price-on-touchstone-exploration--8623926.html

..............Canaccord said following Touchstone's analyst presentation and third-quarter results, it was now possible to add "a little more flesh to the bones" of the well test result.

The Canadian bank said its initial view that the oil discovery was "an important step forward" had been confirmed, though it also recognised that there was still "plenty to be done" to fully evaluate the scope of the commercial potential at Royston and the surrounding Ortoire licence.

Canaccord, which reiterated its 'speculative buy' rating on the stock, said the tested zone, the first and deepest of three planned, looked the least promising in terms of reservoir rock properties, yet the test also produced light sweet crude despite the equipment used being designed for gas flow.

"We think the information provided so far provides the foundation for thinking that Royston could be both a gas/wet gas (to be confirmed following two tests expected to be completed before YE21) and an oil development. Furthermore, the discovery of oil in the deepest levels of Royston-1 adds support to the possibility of oil in the nearby but deeper Krakken prospect," said Canaccord..................

[pro_s2009]

Oil migration in Trinidad is West to East.

So in very simple terms, oil at Royston proves oil has not only migrated this far East (good for Krakken) but also its migrated through Chinook area, and so any updip areas of Chinook above the OWC are full of oil (and gas if a gas cap).

This is really what DYOR is all about. Looking at depth into things, what they potentially mean and seeing potential upsides before the rest of the market catches on.

Royston oil is in the Herrera 7bc. Chinook water (with some oil) was in the Herrera 7bc.

Royston oil had about 3% water cut, so at that depth its near the OWC, but still some way away from it.

Chinook water had some oil in it, so its some way below the OWC.

Simple 2+2=4 therefore that Chinook, having areas 1000 feet uppdip, if you allow for an OWC say 300 feet higher in the 7bc than where Chinook-1 drilled, means at the top of that 1000 feet vertically updip location you might have around 700 feet of oil pay.

Same for Royston, if at 10,700 feet they have slght water traces they are quite close to the OWC, but then if a lot of the 7bc is 10,000 feet, that means for a vast area of the Intermediate sheet at Royston area you have up to 700 feet of oil pay.

Chinook will be very commercial imo, being an onshore discovery with circa 30 to 50 million barrels recoverable - that is equivalent of an offshore discovery of 150 to 250 million barrels recoverable - given cost of development means onshore is worth 5 times offshore size.

Royston, looks vast, looks big. Could well be a 100+ million recoverable barrel size discovery, but it will need an appraisal well to open that up - which is of course Krakken-1 which will appraise the Royston intermediate sheet before going down to the potentially jumbo size Cretaceous below.

While everyone wants everything as fast as possible, here, you are going to have to wait.

Most important for TXP now is to get Coho online and then Cascadura online. Coho will provide a step change in revenue, adding 500K per month with 10mmscf/day.

When Coho-2 is drilled that pretty instantly moves up to 1,000K per month with another 10mmscf/day. I believe Coho-2 will be drilled in Q1 2022. Got to add more cashflow.

Cascadura adds initially at 90mmscf/day around 4,500K per month which is a massive change and then allows TXP to self fund everything going forward.

So TXP holders need a little patience to see us through to Coho-1 online, then Coho-2 online, then Cascadura ST1 and Deep1 online.

Then its all systems go for as much drilling as they can do.

I dont know what order they will drill.

For me, Guabine is last, this one would be tied into Chinook development, so its not really a rush, I would guess exploration drill number 3.

Steelhead, could be integrated into Royston development, so perhaps they might want to drill this first before submitting the EIA for Royston ?

However, with this very exciting oil discovery and the current very high oil prices they might want to drill Krakken-1 first ?

So whether its Steelhead-1 first or Krakken-1 first I dont know, all I surmise currently is that Coho-2 will be the first new well of 2022 in the Ortoire license area - with an additional 500K per month and it can be tied straight into production from discovery - thats a no brainer.

Get Coho-2 done by end of March 2022 and then :

Coho-1 + Coho-2 = 20mmscf/day production
March 2022 will see the new reserves report for year end 2021 (which will now include Cascadura Deep and Royston)

So by April 2022 very easy to go to the bank and increase the credit facility from 20m dollars to 50m dollars which then pays for Royston development and sees them through to Cascadura online.

Thats the path to zero dilution and maximized shareholder returns imo. Short term traders wont like it, but tough, they are not investing only trading.

[pro_s2009]

Q3 MDA has been released (as well as the Q3 results). Well worth reading the MDA for full details.

https://touchstoneexploration.com/wp-content/uploads/2021/11/TXP-MDA-September-30-2021-FINAL.pdf



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[pro_s2009]

A snippet from Shore Cap.

Shore Cap maintain that TXP are fully funded to Cascadura coming on line and dont need any extra money.

I dont agree with his 25,000 boepd year end 2023. I forecast 30,000 to 50,000 boepd year end 2023.

If Krakken-1 is duster in the Cretaceous next year I expect share price around 500p Dec 2022. If Krakken-1 strikes oil in the Cretaceous then I expect 1000p a share Dec 2022. The game is well and truly on now.

Krakken-1 is now a 2 in 1 well, so it can be designed as an oil production well into the Intermediate sheet to appraise this oil discovery, and also designed as a poke into the Cretaceous below. So the development well cost for Royston oil is paid for by the planned exploration costs of Krakken-1. Lovely.

And a valid point, the Royston area is vast, and currently they have only poked the top of the Intermediate sheet. There might be 100 million OIP, or 200 million OIP or indeed 500+ million barrels OIP. We will not know until the appraisal happens and the Krakken-1 well goes all the way through the Intermediate sheet on its way down to the Cretaceous.



https://www.sharesmagazine.co.uk/news/shares/the-discovery-which-has-sent-touchstone-exploration-17-higher

.......‘MATERIAL UPSIDE SURPRISE’

Shore Capital analyst Craig Howie commented: ‘The discovery reported today has been made in a separate and previously unidentified new pool and therefore, in our opinion, provides a material upside surprise beyond the previously-announced discovery of liquids-rich natural gas in Royston.’

Howie added: ‘Ahead of the full set of Royston test results, we continue to believe that an FY22 exit production rate of 15,000 boepd (barrels of oil equivalent per day) is readily achievable and happily maintain our 7,000 boepd average daily production forecast for next year.

‘We continue to believe that 25,000 boepd appears perfectly achievable by the end of FY23. We also remain confident that Touchstone’s liquidity is ample and sufficient to see the company all the way through to commercial production from Cascadura – which we fully expect to provide substantial liquids-rich gas production and operating cash flow.’...........

[pro_s2009]

Interview with Paul Baay

https://www.proactiveinvestors.co.uk/companies/news/965529/touchstone-exploration-announces-as-good-as-it-gets-new-light-oil-discovery-in-trinidad-965529.html

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[pro_s2009]

100 millions barrels, or more....like more.........like more more more.

More news as well after tomorrows meetings with TXP management.

You can see the Finncap note 1st page on the picture link below. Open the link to read it.

https://i.ibb.co/kgnLVwW/TXP-Finncap-Nov-21.jpg

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Top

[pro_s2009]

Fantastic news for TXP.

Bottom section now confirmed flowing light oil. Big upside. Two main gas targets now to be tested. This is significant upside for TXP as they were still in pay at TD and so this oil section goes deeper and is thicker. Also good for de risking the deeper Krakken target.

Its all upside as this was not even a target pre-drill, only the two sections testing next for gas were the targets.



https://www.londonstockexchange.com/news-article/TXP/light-oil-discovery-in-first-of-3-royston-1-tests/15202662?showDisclaimer=true

"Paul Baay, President and Chief Executive Officer, commented:

"We are excited to discover a promising new light oil pool in the deepest test section of the Royston well, adding further potential to the future development opportunity in the Royston area, as light oil can be easily and economically developed alongside any gas development. The initial test confirms the large hydrocarbon column in the well, and we interpret the following two primary testing targets to be liquids rich natural gas. These results exceed pre-test expectations, as a flowing light oil opportunity with significant development potential from the bottom 100 feet of the wellbore is a major addition to the Royston area opportunity. We have the potential to further evaluate the intermediate Herrera in future drilling programs by penetrating the intermediate sheet when we drill and assess the underlying Cretaceous prospect. These results further amplify our onshore opportunities in Trinidad.""

[pro_s2009]

October 2021 figures added.

A small increase (62K) in the actual short level (percentage down as more stock on CREST). Price being suppressed is ongoing.

TXP Stock on Loan (Shorts) from Euroclear (% borrowed from CREST holdings - average)

Jan 2021____0.52%
Feb 2021____1.23%
Mar 2021____7.14%
Apr 2021____8.65%
May 2021____8.79%
Jun 2021____8.74%
Jul 2021____8.49%
Aug 2021____8.45%
Sep 2021____8.39%

Oct 2021.....8.37% (Loaned 8.870 million up from 8.808 million in September)

[pro_s2009]

30th Oct satellite image suggests some extra equipment now on site at Royston. Might mean that testing may commence this coming week, or soon after.

https://apps.sentinel-hub.com/eo-browser/?zoom=18&lat=10.25059&lng=-61.10933&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2021-10-30T00%3A00%3A00.000Z&toTime=2021-10-30T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR

[pro_s2009]

Coho pipeline work starts.........Coho will be on line before year end.

[pro_s2009]

As its a Sunday and I have some free time I thought well, why not lets get more into this "Cretaceous" below Royston, or indeed, below Ortoire.

If you care to chat to TXP's geos, they will tell you they are massively excited as the Cretaceous below Royston appears to be very very thick and also unbroken. Guyana "Liza" sized potential, but onshore Trinidad???????

Why are some people who are looking past the trees (Cascadura, Royston, Coho, Steelhead, Gaubine, Chinook etc..) to see the big fat Wood excited about something that is currently not drilled yet.

Why is a highly successful investment guru holding near 3% of TXP and talking about TXP and Ortoire being the next Guyana potentially ? Why is XM so very very excited about the Cretaceous below Ortoire.

Well, there is a trend, which with latest drilling results is proven, running down from Trinidad to Guyana to Suriname........potential big fat full of oil Cretaceous reservoirs.

Just like all the dry holes put into Guyana and Suriname and in the past Trinidad - its taken a long time to work out the keys to the geology and where to drill to find these Cretaceous reservoirs. The North Sea had dusters galore before they found oil.

Its been a long held theory that they exist in Trinidad, just like they have been found offshore Guyana and offshore Suriname and could be onshore Trinidad.

But as is said - anything found onshore is worth 5 times the same if offshore due to the costs of offshore. So a billion onshore recoverable barrels has the value of five billion offshore recoverable barrels in very simple terms.

Here is a research paper, written in 2014, on the potential for these massive oil bearing Cretaceous reservoirs being in Trinidad.

And you will note, in the summary findings - where the writer thinks they are - which happens to be Ortoire license area. The overlapping of the red and green areas.


https://www.searchanddiscovery.com/pdfz/documents/2014/30373thomas/ndx_thomas.pdf.html


And now, here we are, seven years later, with the very latest seismic showing that the Krakken, despite all best efforts to rule it out and say "its not the mythical multi billion barrel Cretaceous reservoirs that everyone has looked for for decades onshore".............now appears to be even stronger than ever based on the latest seismic and now also the Royston drilling results being hydrocarbon bearing.

So yes, I am looking far ahead. Looking to what might be, and that might be worth tens or hundreds of todays share price.

In the meantime, its all about delivering a successful production and exploration company, and with Coho and Cascadura on line soon, with lots of development and appraisal to be done on Cascadura, Coho, Chinook and Royston......and with lots of exploration to come with Steelhead and Guabine among 20 others, as well as South West legacy drilling and the deep Herrera there....... and that alone should see the share price north of 5 pounds before the end of 2022.

BUT.......there is something very much bigger potentially, which could be utterly transformational for the company and the share price. That is the onshore Ortoire license area Cretaceous.

And thats why I have a lot of TXP and am very happy holding and waiting to see what 2022 and 2023 brings for us shareholders. No trading, no profit taking, just keep on accumulating.

Roll on the Krakken drill in 2022, which will happen 8 years after that research paper was written - finally we may see what the enormous Ortoire Cretaceous holds......

And if anyone thinks this has not been planned.........why do you think a new rig capable of drilling into the Cretaceous is now in Trinidad and under contract to TXP for three years at least. Its all quietly ticking along without highlighting it too much - as its so big - most people would think its ludicrous to talk about it......they will scoff at it and laugh.........but they may all end up with egg on their faces if Krakken delivers.........and I want to be holding the golden tickets, lots of them, when the drill happens.

[pro_s2009]

Cascadura - Production online April/May 2022

Plan still in place, this from the Ministers speech a few days ago. Listen from 23 minutes in, he says about Touchstone becoming the largest onshore gas producer within a few months.

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[pro_s2009]

The new 1domus estimated timeline :


2021

Week 39 - TD Royston + log

Week 43 - first Legacy well WD4 (25th to 31st Oct)
Week 43/44 first test results Royston (25th to 7th Nov)

Week 44 - Coho pipeline en route (1st to 7th Nov)
Week 46 - second Legacy well WD8 (15th to 21st Nov)
Week 49 - third Legacy well Coora
Week 49 - start pipeline Cascadura ?? NGC
Week 51 - fourth Legacy well
Week 51 - Coho online

2022

Week 3 - new well - Legacy deep or Ortoire…
Week 7/8 2022 EIA + start casca facility
Week 15 - Casca online

[pro_s2009]

Paul must be planning to do some presentations after the Q3 results are released in November, and so a new presentation has been put out.

https://www.touchstoneexploration.com/wp-content/uploads/2021/10/October-2021-Corporate-Presentation.pdf

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[pro_s2009]

Anyone wanting to set up a Fire Alert in Trinidad the link is below :

https://firms.modaps.eosdis.nasa.gov/alerts/

You can select to choose a custom area, zoom into Trinidad and then make a box around Royston.....so the moment any Fire or of course flare is detected you will get an email alert.

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[pro_s2009]

For those who want to watch for Flaring, you may use this link below :

https://www.arcgis.com/apps/mapviewer/index.html?layers=dece90af1a0242dcbf0ca36d30276aa3

It is set to look for fires and thermal activity, and updates every 15 minutes. A flare from a gas flow test will also show up on here as an accidental forest fire trigger/thermal event.

Zoom into Trinidad and then to Ortoire and then keep a watch in the weeks ahead. Someone might spot a big red spot over Royston at some point.

[pro_s2009]

Done some detective work and found the following - which if Royston is analogous to the Carapal Ridge gas discovery - we should expect to similar porosity, condensates etc... from the Royston Herrera test results.

What makes me excited now is that at Carapal Ridge the 7bc was oil bearing..............which means, we might see the lower Herrera 7bc at Royston being oil bearing, with the upper Herrera 7a being gas/condensate. Mmmmmmm I am even more excited now - might we have oil down below in the 7bc and gas condensate upper 7a.

Lets not forget the drill stopped in the 7bc in pay.........which means we might have the 1TCF of gas in the upper 7a and then a few hundred millions of barrels of oil in the lower 7bc........with the potential billion barrel Krakken still to be drilled below that. Also note BG never found a water/gas contact or oil/water contact. This all bodes extremely well and exciting.

So we are looking for around 17% (0.17) (plus or minus a couple of points) porosity from Royston-1.


The Carapal Ridge field was discovered by the Carapal Ridge-1 well, the first well to penetrate the Carapal Ridge thrust sheet. The Carapal Ridge-1 exploration well is currently the only well within the field and has been completed as a producer. The well is producing 20mmscfd from a 678ft interval (6568ft - 7246ft) within the Herrera Member sandstones of Mid Miocene age.

The Carapal Ridge-1 well encountered a 937ft continuous column of gas condensate pay within a single thrust sheet of good quality Herrera Member sandstones. Herrera sandstones have an average porosity of 17% and a net-to-gross of 58% within the pay interval. The sands consist predominantly of stacked upwards fining and blocky proximal turbidite channels and lobes. FMI and dipmeter data confirm low angle amalgamated sand bodies.

The Carapal Ridge fluid is a rich retrograde / gas condensate with an initial CGR variable from 50 to 22 bbl/mmscf. Top Herrera sandstone is at a depth of 6568ft. A gas water contact was not encountered in the well. The proven gas column is down to 7505ft and is based on log and test data and coincides with a complex basal imbricate thrust system. Below the basal imbricate thrust system the well penetrated a lower Herrera thrust sheet, referred to as the underthrust play. DST 1 encountered oil in the underthrust play. The well drilled to a total depth of 8829ft within the Herrera Member sandstones.

[pro_s2009]

Very nice news, progress marches forwards. Cascadura online mid Q2 2022........

[pro_s2009]

Trinidad and Tobago budget highlights released in news by TRIN, worth read for #TXP holders.

https://www.investegate.co.uk/trinity-exploration--trin-/rns/trinidad-and-tobago-budget-highlights/202110110700105748O/

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[pro_s2009]

Stifel with 2.75 CAD target on 1st October and Cormark with 4.0 CAD target on 4th. Latest two broker price target increases in the below link.

https://www.marketbeat.com/stocks/TSE/TXP/price-target/

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[pro_s2009]

WTI now at 80$ a barrel. Wonder what the netback is for TXP now on their oil production ?

Absolutely perfect time to be drilling 4 additional producers in the South West, make the most.

If those 4 producers come out good, could be adding half a million dollars in netbacks per month from January. Coho being on line year end, could mean a million dollars a month extra coming in in total - additional oil plus gas.

The world has an LNG shortage, Trinidad has a gas shortage also cutting down LNG produced.......and TXP has loads of gas.

If that circa 9 million share short is still present on the next update early November - then I am getting more than suspicious that a hostile bid will be coming in in Q1 2022 once Royston testing is complete and figures known.

[pro_s2009]

Cormark upgrade TXP price target to 4 Canadian dollars.


Touchstone Exploration (TSE:TXP) Given New C$4.00 Price Target at Cormark - Watch List News


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[pro_s2009]

WD4 well has spud.

We are pleased to announce that Star Valley Rig #205 has passed all inspections and today we were able to commence drilling at WD-4. #DrillingRig #OilandGas #Trinidad pic.twitter.com/DeGKOrvcZw

— Touchstone Explor. (@TouchstoneExp) October 6, 2021

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[pro_s2009]

Shorts update for TXP

September 2021 figures added.

A tiny decrease in the actual short level (percentage down as more stock on CREST). Price being suppressed is ongoing.

TXP Stock on Loan (Shorts) from Euroclear (% borrowed from CREST holdings)

Jan 2021____0.52%
Feb 2021____1.23%
Mar 2021____7.14%
Apr 2021____8.65%
May 2021____8.79%
Jun 2021____8.74%
Jul 2021____8.49%
Aug 2021____8.45%
Sep 2021....8.39% (Loaned 8.808 million down from 8.819 million in August)

[pro_s2009]

Good news that the 2021 onshore license nominations and process is now open. The sooner this is done and TXP are awarded whatever they want to win, the sooner that a Deep Well at a Herrera prospect in the South West oil fields can be planned for and carried out.

Currently until the onshore license bid round is done and dusted and completed and awarded, no deep wells will be planned in the South West to avoid giving a competitive advantage to other companies to bid against TXP.

https://www.bnamericas.com/en/news/trinidad-opens-nominations-for-onshore-round

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The map of the areas is here :

https://www.energy.gov.tt/wp-content/uploads/2021/09/Onshore-Competitive-Bid-Round-2021-Nomination-Map.pdf

I am sure TXP will be interested in Guayaguayare (next door to Ortoire) and also perhaps the South West Peninsula areas.

[pro_s2009]

PBCGF moving well today. Still so cheap imo.

https://www.reddit.com/r/TouchstoneTXP/

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[pro_s2009]

Couple of posts made by 'Druid' today on the L-SE site are well worth a read:

'Time for a sermon RE Offset wells and porosity...and the implications for Royston. I'll try to make it as plain as possible, but will be both too simple and too complex.

These Herrera sediments have their provenance in the W/SW predominantly, which means the basin 'youngs' eastward and is more 'distal' eastward (distal=further from provenance or source of sediments)
More distal means more finer grained, more distal means less sand input,....NOT USUALLY GOOD!

For example, as discussed below, Carapal Ridge/Baraka/Baraka East/Catshill to the west are more proximal (i.e. less distal) to the sediment source, and so you'd expect BETTER petrophysics at CR1 et al.. (Not exactly though, because axially deposited turbidites like these, tend to have better poro-perms in the axial trend, than on the margins of the fairway when equidistant from the source....but nevertheless this is a fair general approx.)
So, this means that NO proximal well, i.e. well to the west, can really help deduce likely well performance at Royston...as we would expect them to be better (again, as long as not on basin margins i.e. too far south in this case).

What we need for comfort, is a well the EAST of Royston, so MORE distal....i,e, a well that should be poorer petrophysically than Royston...

And by Jove, we have one!!

This well is both in a more distal location, in a completely different structural setting (as it pinches out stratigraphically on the LS high which is the southern margin of the Miocene turbidite fairway), and..... it WAS TESTED!!

It looked like water on the logs, and it FLOWED A PILE of water from the same stratigraphy.
If it flowed water from the ratty crappy sands as it did at c.500bwpd, then if that same reservoir was filled with gas condensate...it would produce like the clappers!

So there we have a more distal, ratty stringy, low N:G sand reservoir, that performed VERY WELL !!! Halleluiah!!
NOW....
Royston appears to be both on the axis of Ortoire Syncline and more proximal than this well, and so it should have better sand development, better reservoir properties, and if charged with HC, should FLOW LIKE MAD!!

BTW.... that more distal and marginal Herrera well well is GY 614.

...and while we are talking wells, to further wet your whistles....I note that the ubiquitous Karamat sand is also charged.....I refer all to well CO-1, in the same sand to the west, in the same structural position as the Royston footwall....Hard to follow this sand, but with better data and more exploration....it is prolific.

It is rare in this environment to find a structure which is charged with HC in both hanging wall and footwall location, and also in multiple stratigraphic levels (LC, KMT, Herrera....and ???) !! What a kitchen!! TXP have discovered a gem of a structure, which is HC charged in it's most down plunge position, and leaves an entire trend up-plunge NE for the best blue sky exploration!'



'I think XM would scold me for not taking into account possible effects of any local diagenesis, as hydrothermal fluids move through the system depositing (usually carbonate or siliceous) cement like calcite or quartz overgrowths resp ....this can result in highly indurated sediments which can have a huge impact on reservoir quality.

However, I believe he'd forgive me on this occasion, because this is a relatively simple structure, and has therefore endured relatively few phases of tectonism's flushing pore-throat murdering interstitial mineralogy all over the place as it does in the more complex Herrera structures to the north.......and they are oftentimes A OK across the length on the basin.

I like this structure, with it's up-plunge NE wide open acreage in the OB, and it's possible en echelon structures to the E....and now it seems charged with HC in the down plunge region! It's almost a fairy tale in a mature basin actually...

The other blocks in the east are suddenly way more attractive!!! Think about it...'

[pro_s2009]

Malcys update:


https://www.malcysblog.com/2021/09/oil-price-scirocco-touchstone-and-finally/


........Touchstone Exploration

Touchstone reports that the Company has completed drilling the Royston-1 exploration well and has announced that the well encountered ‘substantial hydrocarbon accumulations based on drilling and wireline log data’.

Royston-1 was drilled to a total depth of 10,700 feet and is the deepest exploration well drilled by Touchstone to date, mud logging and wireline logs indicate hydrocarbon accumulations in the Lower Cruse, Karamat and Herrera sections.

The well encountered a total Herrera turbidite thickness of 1,014 feet (609 feet net sand) in two stacked thrust sheets. An aggregate 393 gross feet of hydrocarbon pay was identified in two unique thrust sheets in the Herrera sands from 9,700 feet to total depth, with wireline logs indicating that the well was in hydrocarbon pay at total depth.

The well is currently being cased and prepared for production testing of the Herrera Formation.

Paul Baay, President and Chief Executive Officer, commented:

“The Royston-1 well was the fifth and final well of the first phase of our exploration drilling program on the Ortoire block, with logging data indicating better than expected results. The amount of identified hydrocarbon pay further verifies the opportunity in the block for our future phase two exploration program. Prior to drilling, we targeted 200 feet of gross sand pay, with results almost doubling our expectations. The team has commenced planning production testing operations in the Herrera Formation using the same equipment that verified the Cascadura discovery. I would also like to commend the team for drilling the well safely and in adherence to all health protocols. With the assistance of the new seismic and upcoming production testing data, we anticipate this to be the largest geological structure identified on the block in the Herrera Formation.”

This looks like a very decent well despite the lower porosity, which incidentally is like other wells in the programme and not markedly different to when Shell was producing. The pay was nearly double the expectations and the whole Ortoire area looks fit for further drilling and has so far more than matched expectations. I don’t normally quote more than one company executive but I think that COO James Shipka provides really important data here as the company look to identify the second exploration phase.

Readers know that I am a big fan of Touchstone whose value is way above the current price even after today’s run up.........

[pro_s2009]

Video interview with the CEO following the Royston well results.

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[pro_s2009]

Massive Royston discovery !

Double expectations !!

https://www.londonstockexchange.com/news-article/TXP/touchstone-announces-royston-1-drilling-results/15147498

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[pro_s2009]

Video link below to the presentation Paul Baay just did at the AAPG E&P Summit

[pro_s2009]

New September 2021 presentation :

https://www.touchstoneexploration.com/wp-content/uploads/2021/09/September-2021-Corp.-Presentation-.pdf


Coho - a development well scheduled. So looks like Coho-2 might be drilled Q1 2022 ?

Cascadura - initial production will be Casca ST1 and Casca Deep-1 - so no development wells planned in Q1 2022 ?

Phase 2 explo is confirmed as Krakken, Steelhead and Guabine - which I still expect in H2 2022 after Cascadura is on line and pumping cash. I believe Bass prospect might be added to this, pending Royston drilling results and further geo work from Royston well logs/seismic.

Krakken is lurking down there on slide 13 under the Top Cretaceous....... :) The billion barrel potential monster.



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[pro_s2009]

Confirmation of the boost to the target price given to TXP recently by Canaccord.

Upgraded price target now 160p. And if Royston strikes and flows, that will be upgraded again considerably.

https://www.marketbeat.com/stocks/LON/TXP/price-target/


In simple terms, add 50p to the share price for each 250BCF of gas potential (if any) from Royston. If it looks like it could deliver an upper estimate of 1TCF - thats 200p on the share price. And if it delivers a duster, expect a kick in the teeth until Cascaudra comes on line Q2 2022 and the share price moves to 150p then as the wall of cash coming in from Cascadura production starts.

For me, fair value at present is 150p (based on the proven and verified reserves) and so any incremental value from any discovery at Royston adds on top of that current proven 150p of reserves.

The 160p target of Canaccord is quite fair imo based on the current situation, current proven and verified reserves with 10p on top of the 150p basic.

[pro_s2009]

If anyone has not read the TXP MDA for Q2/H1 (13th August release), the PDF file is on the link below. Some extra snippets of info are in there.

https://gofile.io/d/mgZRd9

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[pro_s2009]

Thanks to Stanley. From the 3rd of Sept.

Canada Stockwatch Energy Summary for Sept. 3, 2021
2021-09-03 22:05 ET - Market Summary

by Stockwatch Business Reporter

West Texas Intermediate crude for October delivery lost 70 cents to $69.29 on the New York Merc, while Brent for November lost 42 cents to $72.61 (all figures in this para U.S.). Western Canadian Select traded at a discount of $12.05 to WTI, down from a discount of $12.00. Natural gas for October added seven cents to $4.71. The TSX energy index lost a fraction to close at 126.22.

<snip>

Slightly closer to home, Paul Baay's Trinidad-focused Touchstone Exploration Inc. (TXP) lost three cents to $1.37 on 237,700 shares.


The dip came in spite of a glowing analyst write-up. "Touchstone is set for a return to high-impact news," proclaimed Canaccord analyst Charlie Sharp in a research note this morning.

He noted that Touchstone spudded its most recent well on its Ortoire block, the Royston well, on Aug. 12 and will likely have results by the end of this month.

This should be "the most significant market catalyst" in the near term. Yet it will not be the only near-term news;

Mr. Sharp also expects Touchstone to finally achieve production at Ortoire -- from a different well, Coho -- "around the turn of the year." (Touchstone was originally aiming to put Coho on production in early 2020.)

Mr. Sharp concluded by hiking his price target on Touchstone to $2.80 from $2.55 and maintaining his "speculative buy" rating. As usual, the disclaimer at the bottom of the note was at least as interesting as the note itself.

[pro_s2009]

Shorts update for TXP

August 2021 figures added. A small increase in the actual short level (percentage down as more stock on CREST). Price being suppressed is ongoing.

TXP Stock on Loan (Shorts) from Euroclear (% borrowed from CREST holdings)

Jan 2021____0.52%
Feb 2021____1.23%
Mar 2021____7.14%
Apr 2021____8.65%
May 2021____8.79%
Jun 2021____8.74%
Jul 2021____8.49%
Aug 2021____8.45% (Loaned 8.819 million up from 8.792 million in July)

[pro_s2009]

A good interview with Paul. Youtube link below :

Looking good if Cascadura can be online by April 2022, thats massive cashflow coming in and opens the door to take on new debt in Q2 2022 to fund development of Cascadura and Royston (in the success case for Royston). Which allows cash from operations to fund phase 2 exploration in H2 2022 (thats Guabine, Steelhead, Bass and Krakken).

Some talk around of a further 2 wells (on top of the planned 4) in the South West oilfields, which would be possible if Coho is on line by December this year.

No equity dilution, thats a big bonus that they are fully funded and planned until Cascadura is online.

The boot now swings on to the other foot. Someone has borrowed 9 million shares from CREST, is paying to borrow them and sold them. They, at some point, have to buy them back and hand those shares back to CREST.

The share price should be around circa 150p at the moment based on the proven reserves and resources only......excluding the potential up to 2000p upside from the over 20 Ortoire prospects that will be drilled in the coming 5 years. Its down where it is thanks to whoever borrowed those 9 millions shares from CREST and sold them, but they do have to buy them back and return to CREST......that will be fun.

[pro_s2009]

Below is a copy of my email to Paul Baay, the CEO, sent today.

To: Paul Baay
Cc: Stacey Gundersen

Dear Paul,

I hope you are well. The world is starting on the path back to normality, its not going to be quick but its underway now and hopefully it continues.

The progress being made continues to be good and I am very happy to see the news that Royston-1 has now spudded and the loan facility has been extended to be able to draw from it until year end.

Royston-1 is a very exciting drill and fingers crossed you can get into and through the 7bc right the way down to the sub-thrust. The 7bc being never drilled into in the past will offer a lot of excitement and potential upside, and so will a poke into the sub-thrust if the drill can make it that far.

To keep you updated (although I am sure you already are), the current large "short" position being held in London continues, this being around the 9 million shares level.

This is seen on Euroclear, being the number of shares loaned from CREST. There are discussions among shareholders about whether this is a short or a hedge, suffice to say that 9 million shares have been borrowed from CREST and someone is paying a recurring fee to borrow those shares, and has sold them into the market creating the share price weakness we see.

A few shareholders have contacted me (and between them and myself this represents a few million shares of Touchstone) and asked me to write to you to express their views, which I will so do below.

This email will likely be posted on public Bulletin Boards so therefore to not distract you or burden you with having to make a reply and to avoid questions of "did he reply" - please do not reply to this email. Its not trying to teach you to suck eggs, its purely some shareholders wanting their voice heard, and asking me to do so in an email.

Their concerns are regarding this "short" position and how, whoever is behind it, may be going to try to influence the board of Touchstone, directly or indirectly via whatever influence, to accept a dilutive placing ahead with the excuse being "fast tracking 2022 exploration (and/or Royston development)".

Whilst I remain confident that Touchstone can progress to Cascadura production being on line without the need for any further dilution by issuing new shares, they have raised their concerns and so wanted these concerns aired to you, therefore I am passing this on.

The company currently has a debt facility of 20 million dollars, and there has been some talk, rightly or wrongly, that this may be extended up to 50 million US dollars, or indeed a new facility may be utilized.

Touchstone now has the 2020 year end reserves report with which to take on additional debt funding and the expectation is that a new upgraded reserves report including Cascadura-Deep-1 for the first time will be coming for 2021 year end reserves report. Pending any Rosyton-1 success this may also include Royston for the first time and on top of that, there may be more oil moved into 1P status following the 4 pending wells in the South West and any positive results from the pressure testing at Chinook-1 will add a little Cruse gas as well, not to be sniffed at, literally.

With a new improved reserves report at the end of 2021, enhanced debt funding seems the obvious non-dilutive way of advancing in 2022 until Cascadura is online and throwing off cash.

So, given the companies current proven reserves and with Cascadura production due to significantly increase the companies incoming cash flow not too long in the future, they would like to express their desire that the board of Touchstone consider the following points:

1/ Exploration be pushed back until after Cascadura is online and generating significant revenues, to H2 2022 if necessary. You cannot lose value by delaying, you can lose value by diluting and then failing with exploration spend. Therefore all focus should be on getting Cascadura online while minimizing other exploration related expenditure to avoid any unnecessary equity dilution. There is no value creation in "fast tracking" exploration. The oil or gas will remain there to be discovered, whether you drill it in March 2022 or December 2022. Its going nowhere if its there, it can wait.

2/ RBL or similar debt facility (or enhanced facility) to be put in place in Q1 2022, as and if required, to fund any development drilling and development requirements until Cascadura is online and generating those significant revenues. Can the 20 million loan facility be extended to 50 million ? With a new 2021 upgraded year end reserves report can a new 50 million facility be put in place where part of it pays back the current 20 million facility and the remainder is used to fund Royston surface facilities (if needed in the success case) and also a couple of Cascadura development wells in H1 2022 ?

3/ That the board please avoid any temptation to issue shares for cash after any Royston success, when no doubt there may be lots of people "knocking on the door" trying to offer money for new shares. Particularly someone who must get hold of 9 million shares to return them to CREST having borrowed them.

At this juncture in the companies development there is a major cashflow generative development due to be online late in H1 2022 in Cascadura, or as some people jokingly say "CashCowdura". To issue shares to fast track exploration is not creating value and would dilute value in the short term. All future exploration should wait until Cascadura is online and then be generated from cashflow. Any requirement for Royston development (eg surface facilities) again should be funded via debt.


As I said earlier, this is just their thoughts and opinions that they wanted passed on, and so I have done so.

My only personal comment would be that the current share price weakness being seen is in my view completely related to the lack of clarity on future funding given the ongoing delays and further delays to Coho and Cascadura. The short position is obviously suppressing the price and it becomes a "downwards spiral" as people will sell due to a low weak share price, which in turn creates even more weakness, creating even more selling, allowing the share price to be manipulated downwards and held low. Confidence is currently shot and that short position is making sure, at the moment, no confidence can be rebuilt. A new or enhanced credit line announced in 2022 will make everyone "breath" and be confident there is no discounted placing ahead to get cheap shares from.

On another note one thing that will not sit well with people, following Chinook, is any delay to flow testing in the event of any discovery at Royston. One hopes that testing equipment has been reserved and in the event of any success there will be an immediate move to flow testing without any delay.


Fingers crossed for Royston success ahead and stay safe and thank you for your time in reading this. Keep up the good work.

All the very best,
&&&&

[pro_s2009]

Comment from Malcy.

https://www.malcysblog.com/2021/08/oil-price-touchstone-prospex-block-trinity-and-finally/

.......Touchstone has suffered unduly in ratings terms after an incredible start to its drilling campaign in the Ortoire Block in Trinidad. It was as if the market thought that they could go through an extensive drilling campaign without a dry hole although the total project has been an unqualified success. Whatever Royston brings you could double the share price back to the previous high and it would still be a cheap share.........

[pro_s2009]

Thanks che7win, that ties in with what I have been saying and also the replies I have had from the company and that I have posted many times.

They will use debt to fund ongoing requirements until Cascadura is online, so no equity placing is going to happen.

Which leaves the 9 million share short in London a bit of a problem now and how they close it, it was easy to sell it all the way down to 90p, but now they have to buy it all back again from the market which is/was not their plan - they planned on a placing to get cheap stock to close it.

IMO, as below:

Chinook updip oil will be 2023 exploration.

2022 H1 is all out to get Cascadura done and online by end of June 22 latest. NGC build the gas pipeline but TXP has to build the oil pipeline for the liquids.

2022 H1 may also be all the admin work to get Royston online by end of 2022 (in the event of a Royston success). So a Royston license area EIA will be required.

2022 H2 will be phase 2 exploration and infill drilling. So Steelhead, Guabine and Krakken plus infill drilling at Cascadura (and maybe Royston). This waits for Cascadura to be online. TXP could be 200 or 300 mmscf/d by end of 2022. 200 with Cascadura infill wells, 300 if Royston comes in good.

Coho-1, best estimate that is going to be late December 2021 online, any earlier is a bonus.

The 4 wells in the SouthWest oilfields commencing soon with the new Canadian rig are 1 million dollars per well, cheap and quick to drill and payback is very quick at current oil prices.



che7win 13 Aug '21 - 15:08 - 21677 of 21683

I’ve followed up with the company today with some questions I had from todays update:

Without going into specifics, I asked about Coho timelines, Cascadura, Coho and funding.

Answers in quotes are verbatim.

Answers:
1. Clarification on funding - “We will get cas on with cash we have. “
They made it very clear in their reply there will be no equity funding....

2. On Coho - from reply I understand it should be producing November.

3 They will revisit Chinook at a later date “Have much better things to do for the next year. “

[pro_s2009]

Two major headlines. Royston is ongoing and debt will be used.

https://www.londonstockexchange.com/news-article/TXP/second-quarter-2021-results-and-operational-update/15097240


Executed an amendment to our $20 million term loan facility agreement, extending the principal availability period from June 15, 2021 to December 31, 2021, thereby allowing us to access the outstanding $12.5 million available balance prior to the end of the year.

· Spudded our final Ortoire minimum exploration commitment well, Royston-1, on August 12, 2021.

[pro_s2009]

Coho-1 they commence laying pipe around 1st of September. So online before year end.

#Touchstone wishes to advise our local communities in Trinidad that the installation of the COHO pipeline is scheduled to commence on or about September 1, 2021. #Coho pic.twitter.com/3o3Z93zSip

— Touchstone Explor. (@TouchstoneExp) August 11, 2021

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[pro_s2009]

Royston-1 rig is up and now ongoing safety inspection. Spud will be soon.

Amazing aerial footage of the assembled rig at #Royston! Over the past week the #Touchstone team have been busy assembling the rig onsite, which is now ready for government inspection. #TXP #OilandGas #Trinidad pic.twitter.com/jxsTVMbsDy

— Touchstone Explor. (@TouchstoneExp) August 9, 2021

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