TIDMTXP
RNS Number : 3295K
Touchstone Exploration Inc.
24 August 2023
TOUCHSTONE ANNOUNCES ORTOIRE OPERATIONAL UPDATE
CALGARY, ALBERTA (August 24, 2023) - Touchstone Exploration Inc.
("Touchstone", "we", "our", "us" or the "Company") (TSX, LSE: TXP)
provides an update on Royston-1X well production testing,
commissioning of the Cascadura natural gas and liquids facility,
and operations at Coho. Touchstone has an 80 percent operating
working interest in the Royston-1X sidetrack well and the Cascadura
and Coho fields, all of which are located on the Ortoire block
onshore in the Republic of Trinidad and Tobago. Heritage Petroleum
Company Limited ("Heritage") holds the remaining 20 percent working
interest.
Royston-1X
The Company has completed its program of five production test
intervals at Royston-1X. Touchstone is currently evaluating the
uppermost prospective intervals in the Herrera and Karamat
formations. The well is shut-in while awaiting the arrival of a
service rig which will be used to put the well on pump to
facilitate further testing.
As previously reported, the lowermost section of the Royston-1X
well in the subthrust sheet of the Herrera Formation was initially
completed at depths between 11,102 and 11,168 feet. Swabbed oil
volumes were analyzed by a third party confirming between 34.1 to
40.0 degrees API gravity formation crude oil, representing the
deepest oil encountered on the Ortoire block to date. The maximum
shut-in pressure observed at surface was 2,534 psi, however, this
section of the formation was interpreted to have a low permeability
reservoir.
The second production test evaluated the subthurst sheet of the
Herrera Formation at depths between 10,604 and 11,020 feet. Light,
sweet oil was recovered measuring 35.4 degree API gravity. The
maximum shut-in pressure observed at surface was 2,450 psi. Similar
to the first testing interval, the formation exhibited a low
permeability reservoir with minimal natural oil flow to surface.
Touchstone suspended the first two intervals with a retrievable
plug, allowing us the opportunity to reevaluate the subthrust sheet
at a further date for potential fracture stimulation.
The third production test evaluated the intermediate sheet in
the Herrera Formation at depths between 10,220 and 10,314 feet.
38.3 degree API gravity crude oil was encountered, with a maximum
shut-in pressure observed at surface of 2,331 psi.
The fourth production test evaluated the overthrust sheet in the
upper Herrera X Formation at depths between 9,591 and 9,662 feet.
38.1 degree API gravity oil was encountered, with a maximum shut-in
pressure of 2,438 psi.
The final production test targeted the Karamat Formation at
depths between 9,318 and 9,346 feet. Once again, light, sweet oil
was recovered with a maximum shut-in pressure observed at surface
of 2,230 psi.
Royston commerciality
Although high reservoir pressures were observed during each of
the production tests, minimal natural flow to surface was observed,
indicating low permeability. As a result, Touchstone has now
comingled the three uppermost prospective intervals and is waiting
for a service rig to place the well on pump. We expect that once
the well is pumping, the hydrostatic pressure on the reservoir will
be reduced, allowing the formation fluid to produce at increased
rates. A further update will be provided following completion of
the final evaluation of the three uppermost prospective
intervals.
Cascadura
The Cascadura facility has been designed for a maximum gross
production capacity of approximately 200 MMcf/d and 5,000 bbls/d of
associated liquids, with a current gross production capacity of 90
MMcf/d and 2,250 bbls/d of associated liquids (17,250 boe/d).
The facility is currently undergoing final commissioning with
natural gas from the Cascadura-1ST1 well being used for the initial
systems start-up and equipment testing. Upon completion of the
commissioning of the Cascadura facility, the Company will begin to
introduce natural gas and associated liquids from both the
Cascadura-1ST1 and Cascadura Deep-1 wells.
The current commissioning status of the Cascadura facility is as
follows:
-- testing of the flare system has been successfully completed;
-- introduction of fuel gas to the recycle compressors has occurred;
-- introduction of fuel gas for the generators to provide power
to the site has been established;
-- all safety devices and equipment have been tested and are functioning; and
-- testing of all electronics, alarms, and systems at the
facility to ensure full functionality is 99 percent complete.
Touchstone anticipates initial sales volumes during the week of
August 28, 2023.
Coho
Since the Coho facility commenced commercial production in
October 2022, the Coho-1 well has produced a total of approximately
2 Bcf of gross natural gas and generated over US$4 million in gross
natural gas sales. The Coho facility has achieved 99.9% uptime
performance with the majority of the downtime associated with
third-party processing issues. The Coho-1 well is currently being
restricted on a 34/64-inch choke to manage flowing pressures. In
May 2023, the Company performed a downhole production test that
indicated the well could be optimized by reconfiguring the
producing reservoir intervals. The Company will commence this
operation once the Cascadura facility comes onstream. Additionally,
Touchstone has been approved to drill two additional wells from the
existing Coho location with the intent to fill the facility to its
maximum gross operating capacity of approximately 24 MMcf/d of
natural gas (4,000 boe/d).
Paul Baay, President and Chief Executive Officer, commented:
"Testing of the Royston-1X well was undertaken in a methodical
manner to provide a comprehensive evaluation of the prospect. The
flow and buildup tests for each interval has provided us with
information that could be used for future stimulation of the well
to optimize recovery and production rates. The fact that we have
recovered light oil and significant pressures on each test is
encouraging. We now need to evaluate the mechanics of how to
produce the well at economically sustainable rates. By putting the
well to pump for an extended period, we will be able to determine
both the economics and viability of future operations, which could
include artificial stimulation of the reservoir.
Looking forward to the commencement of commercial production
from the Cascadura facility, we now have in place the
infrastructure to process and monetize all future potential
drilling successes on the Ortoire block. This has been a long
process, but we have now put in place the building blocks for a
fully funded, full-cycle exploration and production strategy."
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary, Alberta based company
engaged in the business of acquiring interests in petroleum and
natural gas rights and the exploration, development, production and
sale of petroleum and natural gas. Touchstone is currently active
in onshore properties located in the Republic of Trinidad and
Tobago. The Company's common shares are traded on the Toronto Stock
Exchange and the AIM market of the London Stock Exchange under the
symbol "TXP".
For further information about Touchstone, please visit our
website at www.touchstoneexploration.com or contact:
Touchstone Exploration Inc.
Paul Baay, President and Chief Executive Officer Tel: +1 (403) 750-4487
James Shipka, Chief Operating Officer
Shore Capital (Nominated Advisor and Joint Broker)
Daniel Bush / Toby Gibbs / Iain Sexton Tel: +44 (0) 207 408
4090
Canaccord Genuity (Joint Broker)
Adam James / Gordon Hamilton Tel: +44 (0) 207 523 8000
FTI Consulting (Financial PR)
Nick Hennis / Ben Brewerton Tel: +44 (0) 203 727 1000
Email: touchstone@fticonsulting.com
Advisories
Forward-Looking Statements
Certain information provided in this announcement may constitute
forward-looking statements and information (collectively,
"forward-looking statements") within the meaning of applicable
securities laws. Such forward-looking statements include, without
limitation, forecasts, estimates, expectations and objectives for
future operations that are subject to assumptions, risks and
uncertainties, many of which are beyond the control of the Company.
Forward-looking statements are statements that are not historical
facts and are generally, but not always, identified by the words
"expects", "plans", "anticipates", "believes", "intends",
"estimates", "projects", "potential" and similar expressions, or
are events or conditions that "will", "would", "may", "could" or
"should" occur or be achieved. The forward-looking statements
contained in this announcement speak only as of the date thereof
and are expressly qualified by this cautionary statement.
Specifically, this announcement includes, but is not limited to,
forward-looking statements relating to the Company's capital plans
and strategies; Royston-1X production testing results and current
testing operations, including the potential for increased
production rates and future fracture stimulation and the timing
thereof; Cascadura facility construction progress and expected
timing of completion and first production; future Coho well
servicing and drilling operations and the timing thereof; and
Touchstone's expectation of becoming a fully funded, full-cycle
exploration and production Company.
Although the Company believes that the expectations and
assumptions on which the forward-looking statements are based are
reasonable, undue reliance should not be placed on the
forward-looking statements because the Company can give no
assurance that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very
nature they involve inherent risks and uncertainties. Actual
results could differ materially from those currently anticipated
due to a number of factors and risks. Certain of these risks are
set out in more detail in the Company's 2022 Annual Information
Form dated March 23, 2023 which is available under the Company's
profile on SEDAR (www.sedar.com) and on the Company's website
(www.touchstoneexploration.com). The forward-looking statements
contained in this announcement are made as of the date hereof, and
except as may be required by applicable securities laws, the
Company assumes no obligation or intent to update publicly or
revise any forward-looking statements made herein or otherwise,
whether as a result of new information, future events or
otherwise.
Oil and Gas Measures
Where applicable, natural gas has been converted to barrels of
oil equivalent based on six thousand cubic feet to one barrel of
oil. The barrel of oil equivalent rate is based on an energy
equivalent conversion method primarily applicable at the burner
tip, and given that the value ratio based on the current price of
crude oil as compared to natural gas is significantly different
than the energy equivalency of the 6:1 conversion ratio, utilizing
the 6:1 conversion ratio may be misleading as an indication of
value.
Abbreviations
API American petroleum Institute
bbls/d barrels per day
boe/d barrels of oil equivalent per day
MMcf/d million cubic feet per day
Bcf billion cubic feet
psi pounds per square inch
Competent Persons Statement
In accordance with the AIM Rules for Companies, the technical
information contained in this announcement has been reviewed and
approved by James Shipka, Chief Operating Officer of Touchstone
Exploration Inc. Mr. Shipka is a qualified person as defined in the
London Stock Exchange's Guidance Note for Mining and Oil and Gas
Companies and is a Fellow of the Geological Society of London (BGS)
as well as a member of the Canadian Society of Petroleum Geologists
and the Geological Society of Trinidad and Tobago. Mr. Shipka has a
Bachelor of Science in Geology from the University of Calgary and
has over 30 years of oil and gas exploration and development
experience.
This announcement contains inside information for the purposes
of Article 7 of the UK version of the Market Abuse Regulation (EU)
No.596/2014, which forms part of UK law by virtue of the European
Union (Withdrawal) Act 2018.
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