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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...'
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.........
Video interview with the CEO following the Royston well results.
Massive Royston discovery !
Double expectations !!
https://www.londonstockexchange.com/news-article/TXP/touchstone-announces-royston-1-drilling-results/15147498
,
Video link below to the presentation Paul Baay just did at the AAPG E&P Summit
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.
.
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.
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
.
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.
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)
A good interview with Paul. Youtube link below :
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,
&&&&
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.........
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. “
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.
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
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
Shorts update for TXP on London AIM
July 2021 figures added. A small amount of short closing over July - as seen below and also from the share price rise of late.
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% (Loaned 8.792 million down from 9.032 million shares in June)
So still nearly 9 million shares shorted on London and still need to buy back and close.
Just some quick thoughts on production, so excuse any errors.....
Given the 15,000 BOEPD 2022 production target on Xaviers presentation, I thought I would run through the figures and of course, the upsides.
Assuming the 4 news wells in the South West oil licenses commencing in Q4 21 deliver us with a total oil production of 2000 bopd in 2022.
2022 Production
2000 BOPD OIL (South West license areas)
+
3450 BOEPD GAS (Cascadura Deep 1) based on initial 20mmscf/d (can rise to 25)
+
400 BOPD LIQUIDS (Cascadura Deep 1)
+
6900 BOEPD GAS (Cascadura 1 ST) based on initial 40mmscf/d (can rise to 50)
+
1100 BOPD LIQUIDS (Cascadura 1 ST)
+
1700 BOEPD GAS (Coho-1)
Total = 15,550 BOEPD from when Cascadura is online.
However.....there is potential upside by year end !
Chinook-1 Cruse tie in
Possible extra 350 BOEPD to 500 BOEPD GAS
Royston-1 success case
Possible extra 5000 BOEPD GAS by year end
Casca-1 and Casca-Deep-1 continue cleaning up and finished 2022 year end +15mmscf/d which is extra 2550 BOEPD
So base case :
TXP will be producing circa
3700 BOEPD average in H1 2022
and
15,500 BOEPD average in H2 2022
And if Royston-1 succeeds, TXP should exit 2022 with circa 20,000 BOEPD production (or even 22,500 BOEPD if the Casca wells clean up more)
It should be noted that, apart from Royston-1 and Chinook-1 Cruse - ALL THE WELLS ARE DRILLED, PROVEN AND FLOW TESTED and behind pipe waiting to produce. Basically zero risk.
The upsides - Chinook-1 Cruse is on pressure test after flowing. Royston is to be drilled soon.
The thing that suddenly strikes is that there will be no infill drilling at Cascadura in H1 2022. TXP will utilise the new rig to drill the 4 oil production wells in the South West starting Q4 2021 and then will likely not use the new rig until we get into H2 2022, where they might use it for around 200 days drilling Guabine, then Steelhead then Krakken. I believe the rig contract is they only have to use it for 120 days per year minimum.
If they infill drill at Cascadura, year end 2022 production could hit 30,000 BOEPD.
If you want to crystal ball 2023
Infill drilling at Cascadura 200,000mmscf/d = 34,000 BOEPD
3 producing wells on Coho averaging 10mmscf/d = 5,000 BOEPD
Infill drilling at Royston 200,000mmscf/d = 34,000 BOEPD
South west oil license area production
Plus Guabine+Steelhead+Krakken.......... so TXP ends 2023 with say minimum 73,000 BOEPD or maybe anything up to 100,000 BOEPD. And thats excluding drilling the oil targets updip at Chinook.
Damn exciting if you ask me :) Thats a company literally throwing cash out and yet, still over 200 locations to drill in the South West and nearly 20 more new additional targets to drill at Ortoire, and some deep Herrera prospects in the South West on top of all that.
Massive production and yet still, very exciting upside from exploration.
There may be a boring 6 to 8 months between Royston-1 completing and the next "big" exploration well, as TXP complete the production infrastructure of Cascadura and hopefully start on the Royston production EIA and then production infrastructure - but my oh my......H2 2022 onwards this is going to be a wall of cash generating beast, drilling big upside exploration wells (over 21 targets), self funded and paying lovely dividends. During that boring 6 to 8 months there will be a move away by the hot short term money and more long tern investing money will come in taking a position ahead of the big production increases and then dividends from 2023 onwards.
I think I have just talked myself into buying some more........LOL :)
TXP official video of the Ministers visit now on Youtube :
Xavier did a presentation to the AAPG Young Professionals T&T yesterday, introducing Touchstone to them.
Quite interesting, nothing new but very interesting all the same.
https://scontent.fsub5-1.fna.fbcdn.net/v/t66.36281-6/10000000_271123308115938_4544485508296668576_n.mp4?_nc_cat=111&ccb=1-3&_nc_sid=985c63&efg=eyJ2ZW5jb2RlX3RhZyI6Im9lcF9zZCJ9&_nc_ohc=b7xW0NEq4lYAX_t0cBf&tn=8Ofst-2ETbjHoNh0&_nc_ht=scontent.fsub5-1.fna&oh=1b01ba3aa5476a42321396215a4c8288&oe=6107E045
Starts about 5 minutes in.......
All contributes to the strong push to get Coho and Cascadura on line and into production soonest. The gas shortage has been exaggerated by falls in bpTT gas production as highlighted in the article below.
https://www.guardian.co.tt/news/bptt-gas-production-plummets-6.2.1359682.b479a97d5c
.
It is worth following their Facebook page as they are now actively responding to comments where they can and its not price sensitive info.
EG with reference to the deep at Coora their IR team added this comment.
.......Touchstone Exploration Inc.
The Coora Blocks are currently responsible for 30% of our legacy oil production with most new wells targetting depths between 5,000 and 7,000 feet. Our subsurface team has identified a prospective oil fairway in the Herrera at depths approaching 10,000 feet which represent a new exploration opportunity on these outstanding blocks. The future is very bright at Coora for both exploration and development...........
Given the move to updating interested observers with regular social media posts for events which are known to the market and so not price sensitive (eg Royston-1 rig and spud, Coho-1 pipeline building, New rig coming from Canada progress, Seismic progress etc...) I suggest people follow the Official Touchstone Social Media accounts.
I have added them to the Info thread on Reddit :
https://www.reddit.com/r/TouchstoneTXP/comments/on4c1i/company_details_web_site_quotes_info_all_the/
And they are also below :
Facebook : https://www.facebook.com/TouchstoneExploration/
Twitter : https://twitter.com/TouchstoneExp
.
Shell announces first gas from Barracuda........one wonders if the resolution of issues with Barracuda leading to first gas, has also at the same time seen the resolution of issues between Shell and the NGC which will soon see first gas at Coho-1
https://www.shell.com/media/news-and-media-releases/2021/shell-delivers-first-gas-from-barracuda-project.html
.
Excellent thread (series of tweets) by Xavier on Twitter just now.
⚒ Ortoire Lizard 🦎 playground
— Xavier Moonan (@MoonXav) July 21, 2021
🔸️As we gear up for the spud of 🔥🛢Touchstone's 5th Exploration well in Ortoire Block here is a summary of the geology and geophysics of this part of the playground..@TouchstoneExp@AAPGYP_TT@AAPGLA @AAPG pic.twitter.com/WmzEK5pGpP
Looking at the longer term........... all stocks go through the "moving to production" stage of the share price cycle.
This is shown in the picture below and is very common. The initial discovery is sold into as people take profits and the "boring" moving to production phase commences and then the share price rallies again as production nears and then production starts and dividends commence.
The difference with TXP is its not a single asset play........most junior oilers have just 1 or 2 plays. Its win or lose. TXP is quite unique in thats its multi-faceted, there is oil production in the South West. There is Coho discovery and going into production in a couple of months. There is Cascadura going into production next year. There is Royston-1 to be drilled this year. There is Steelhead and Guabine and Krakken to be drilled next year. There are more oil wells to be drilled in Q4 in the South West and a "deep" test well there as well.
It is a mixture of production and BIG exploration targets - for me its the "perfect storm" as you have risk minimised by proven flow tested certified reserves and ongoing production and that is mixed with high impact exploration.
It is always during this "transition" period to production (in this instance the transition to significant Cascadura production cashflow) that people take profits, the company is called all the names under the sun by those that sold - there is an effort to disparage anyone from buying - shorters short the profit taking - but everyone knows, whether they admit it openly or not - they want to be holding this stock before the big rally into the production commencing phase. And in the case of TXP I would expect a big Q2/Q3 rally in 2022 as people take their positions to not only get in for Cascadura big production numbers, but also getting in ahead of Steelhead/Guabine and the massive Krakken exploration wells - which by that time TXP will be throwing off cash left, right and center from Cascadura and moving to paying decent dividends in 2023 - on top of which they will still have around 20 more exploration targets to drill in Ortoire and over 200 well locations to drill in the South West - plus any new "deep" targets at Coora.
The chart below is "standard" for a single asset company, in the case of TXP I expect some similarities but a major "lift off and no looking back" at some point in 2022.
Summary of the upcoming Royston-1 well due to spud in a couple of weeks on the link below:
https://www.reddit.com/r/TouchstoneTXP/comments/omh1uk/royston_getting_to_know_the_beast/
.
TXP teasing now, with a tweet about the "deep" at Coora......dont forget, apart from the massive Royston in 2021, decent size Steelhead and decent size Gaubine and of course the ginormous Krakken all to be drilled in 2022, there is then matter of chasing the Herrera big deep prospects on trend with Ortoire down in the South West.
Thats possibly the ONLY thing that would make be accept some fund raising in later 2021, is if they find a massive deep prospect and then propose that one of the four shallow oil well drills in the South West due Q4 2021 becomes a Deep Exploration well as well - so 3 shallow and 1 deep. Which could of course make for a very exciting distraction late 2021......as they say, keep an eye on this "left field" potential.
Touchstone Explor. @TouchstoneExp
#TXP has received 3D Seismic data which covers our Coora Blocks. The seismic data spans approximately seven square kilometres and will be utilized to improve the subsurface understanding and further drive deeper exploration targets. #Seismic #Coora #Trinidad
Minister for Energy, Stuart Young, just tweeted this article. He is really keen and confident that Coho is coming on line quite soon.
https://www.bnamericas.com/en/news/trinidad-set-to-receive-gas-boost-this-quarter
Trinidad set to receive gas boost this quarter
Bnamericas Published: Wednesday, July 14, 2021
Trinidad set to receive gas boost this quarter
Touchstone Exploration’s Coho asset in Trinidad and Tobago is expected to begin natural gas production as early as August.
The energy ministry provided the update following a visit by minister Stuart Young and staff to the field at the company’s Ortoire onshore block.
Production is forecas..............
Another one, much the same. Really looking forward to the Cascadura development plan timeline.
Paul talks below about 200 per day from Cascadura. Well yes, we know that when its "really flowing" in 12 to 16 months time, it will be at 200 per day. But when will that initial 60 per day be flowing ?
Coho - September/October - 10 mmscf/day
Cascadura - initial 60 mmscf/day ????????
Cascaudra 12 to 16 months - 200 mmscf/day
https://newsday.co.tt/2021/07/15/young-welcomes-exploration-strides-by-touchstone/
.........Touchstone Exploration CEO Paul Baay said in the last two years the company has successfully drilled four explorations wells to the Herrera sands in the Ortoire Block, and all were deemed discoveries.
“These are namely Coho-1, Cascadura- 1 ST1, Chinook-1 and Cascadura Deep-1.
"Touchstone has signed a key gas sales agreement with the NGC for the purchase of all gas produced from Ortoire Block. In the coming months Touchstone will bring online our first gas discovery – Coho – at approx 10mmscf/d.”
He said, “We are also working closely with stakeholders to complete the environmental impact assessment for the development of the Cascadura gas discoveries which can see a potential 200mmscf/d liquids rich gas added onto national production, and we are currently completing our testing at Chinook-1 and expect such gas production to be added via pipeline back to the Cascadura facility.”.........
Some nice snippets in here :
https://trinidadexpress.com/press-releases/touchstone-exploration-begins-seismic-survey/article_0ac94cd4-e4c0-11eb-af1c-038f2549aacd.html
...........Speaking at the site of the seismic survey, Minister Young said he spent an educational day touring and was pleased to see the first seismic being performed onshore since 2016, "These are very exciting times with a lot of prospects and a lot of hope for success, especially on the gas side. We at the Ministry of Energy will continue working with Touchstone. The Company is a critical factor in us going forward and providing gas production and showing it can be done."...........
........Paul Baay, Touchsone’s President and Chief Executive Officer, said “in the last two years the Company has successfully drilled four explorations wells to the Herrera sands in the Ortoire Block, and all were deemed discoveries. These are namely Coho-1, Cascadura-1ST1, Chinook-1 and Cascadura Deep-1. Touchstone has signed a key gas sales agreement with the National Gas Company for the purchase of all gas produced from the Ortoire Block. In the coming months, the Company is anticipating to bring online our first gas discovery – Coho-1 at approximately 10 mmscf/d. In addition, we are working closely with stakeholders to complete the Environmental Impact Assessment for the development of the Cascadura gas discoveries, which the Company anticipates initial production of approximately 100 mmscf/d of liquids rich gas and 2,200 bbls/d of condensate. Touchstone is currently completing our testing at Chinook-1 and expect such gas production to be added via pipeline to the Cascadura facility."................