ANNUAL 2023 FINANCIAL AND
OPERATING RESULTS
CALGARY, ALBERTA (March 21, 2024) -
Touchstone Exploration Inc. ("Touchstone",
"we", "our" or the "Company") (TSX, LSE: TXP) reports its operating and condensed financial results for the
three months and year ended December 31, 2023. Selected financial information is outlined below and should be
read in conjunction with our December 31, 2023 audited consolidated
financial statements and related Management's discussion and
analysis, both of which will be available under our profile on
SEDAR+ (www.sedarplus.ca) and on our website (www.touchstoneexploration.com).
Unless otherwise stated, all financial amounts presented
herein are rounded to thousands of
United States dollars, and
all production volumes disclosed herein are
sales volumes based on Company working interest before royalty
burdens.
Paul Baay, President and Chief Executive Officer,
commented:
"The transformational increase in production
through the final months of 2023 reflects the commencement of
production at our Cascadura field. The associated growth in cash
from operations combined with our anticipated increase in borrowing
capacity, will enable us to pursue our previously announced 2024
capital budget focused on driving further growth. Since year-end we
have made substantial progress on our 2024 capital program, with
one well successfully drilled and cased, and two further wells
currently drilling. We continue to expect to bring the additional
Cascadura wells on stream late in the third quarter of 2024 once
the tie-in pipeline to our production facilities is completed. We
are confident that 2024 will be another period of significant
operational development and we look forward to updating our
stakeholders on our progress."
Fourth Quarter
2023 Financial and Operating Highlights
·
Average quarterly production
increased 151 percent to 8,504 boe/d (79 percent natural gas)
relative to 3,391 boe/d produced in the third quarter of 2023,
reflecting a full quarter of Cascadura production
volumes.
·
Realized petroleum and natural gas sales of
$20,759,000 compared to $11,682,000 in the third quarter of 2023,
mainly attributed to incremental Cascadura natural gas and
associated liquids sales.
- Cascadura field
production volumes in the quarter contributed $8,437,000 of net
natural gas sales at an average realized price of $2.45 per Mcf and
$4,170,000 of net NGL sales at an average realized price of $72.92
per barrel.
- Natural gas
production from the Coho-1 well averaged net volumes of 3.1 MMcf/d
(517 boe/d) in the quarter and contributed $617,000 of net natural
gas sales at an average realized price of $2.16 per Mcf.
·
Generated an operating netback
of $13,731,000, a 128 percent increase from the third quarter of
2023, benefiting from a full quarter of production from our
Cascadura field. Operating netbacks were $17.54 per boe,
representing a 9 percent decrease from the $19.27 per boe reported
in the third quarter of 2023, attributed to an increased weighting
of natural gas volumes to total production.
·
Achieved quarterly record funds
flow from operations of $10,489,000 in the fourth quarter compared
to $2,432,000 in the preceding quarter, primarily driven by the
$7,720,000 quarter-over-quarter increase in operating
netback.
·
$1,186,000 in quarterly capital investments
primarily focused on expenditures directed to Royston-1X production
testing, final Cascadura facility commissioning and pre-drill
expenditures relating to the Cascadura-2 well.
·
Reduced net debt by 25 percent in the quarter,
exiting the year with a cash balance of $8,186,000, a working
capital deficit of $7,581,000 and a bank loan principal balance of
$28,000,000, resulting in a net debt position of
$22,581,000.
Annual 2023 Financial and Operating
Highlights
·
Commissioned and achieved first
natural gas and associated liquids production from our Cascadura
facility on September 6, 2023.
·
Delivered average daily production volumes of
3,981 boe/d (65 percent natural gas), an increase of 152 percent
year-over-year.
·
Realized petroleum and natural gas sales of
$48,098,000 compared to $42,944,000 in the prior year, as
$15,742,000 of incremental Cascadura natural gas and associated
liquids sales were partially offset by a $12,598,000 decrease in
crude oil sales, reflecting a 21 percent decline in realized crude
oil pricing and a 12 percent reduction in crude oil
production.
·
Generated funds flow from
operations of $13,730,000 (2022 - $3,540,000) and an annual
operating netback of $26,220,000 or $18.04 per boe (2022 -
$19,281,000 and $33.42 per boe).
·
Executed an incident-free $18,949,000 capital
program, primarily focused on completing the Cascadura natural gas
facility and drilling and testing the Royston-1X exploration
well.
·
December 31, 2023 net debt was $22,581,000,
resulting in a reduced net debt to annual funds flow from
operations ratio of 1.64 times.
·
Responsible operations remained a top priority
throughout 2023, as Touchstone had one lost time injury and
released its third environmental, social and governance report
encompassing the 2022 year.
We recorded exploration and
evaluation asset impairment expenses of $32,649,000 related to the
Chinook and Royston areas of our Ortoire block, as the carrying
value of the assets exceeded the estimated recoverable amount based
on forecasted allocation of future capital spending and the
previously announced results of production tests which deemed the
Royston-1X sidetrack well uneconomic. The impairment expense was
partially offset by an aggregate pre-tax net impairment reversal of
$11,452,000 on three petroleum and natural gas development asset
cash generating-units ($3,896,000 after-tax) and increased fourth
quarter 2024 funds flow from operations. This resulted in a net
loss of $21,236,000 ($0.09 per basic share) recognized in the
fourth quarter of 2023 and $20,598,000 ($0.09 per basic share)
reported in 2023. Excluding net impairment
expenses recognized in each period, fourth quarter net earnings
were $7,662,000 ($0.03 per basic and diluted share) and annual 2023
net earnings were $8,347,000 ($0.04 per basic and diluted
share).
Post Year-End Highlights
·
We safely and successfully drilled and cased our
Cascadura-2 delineation well on the Ortoire block.
·
Spudded the CO-374 well on the CO-1 block on
February 28, 2024 and spudded the Cascadura-3 well on March 1,
2024, with drilling operations currently underway at both
locations.
·
We executed a binding term sheet providing for $13
million of additional borrowing capacity from our existing
Trinidad-based lender, with the parties currently documenting an
amended loan agreement.
·
In February 2024, we achieved average net sales
volumes of 7,081 boe/d as follows:
- Cascadura
contributed net sales volumes of 5,440 boe/d consisting
of:
- net natural gas
sales volumes of 31.1 MMcf/d or 5,179 boe/d with a realized price
of $2.49 per Mcf; and
- net natural gas
liquids volumes of 261 bbls/d with an average realized price of
$69.85 per barrel;
- Coho net average
natural gas sales volumes were 2.8 MMcf/d or 469 boe/d at a
realized price of $2.28 per Mcf (excluding third party processing
fees); and
- average net daily
crude oil sales volumes were 1,172 bbls/d per day with an average
realized price of $69.85 per barrel.
Outlook and Guidance
Our first quarter 2024 capital
program is progressing as planned with a primary focus on Cascadura
field drilling, CO-1 infill well drilling and road and pipeline
construction to tie-in our Cascadura development wells to our
natural gas facility. The majority of the estimated production from
our current capital activity is expected to be weighted to the
fourth quarter of 2024. We currently forecast to maintain our
preliminary 2024 guidance announced on December 19,
2024.
2023 Financial and Operating Results
Overview
|
Three months ended December
31,
|
%
change
(4)
|
Year ended December
31,
|
%
change
(4)
|
2023
|
2022
|
2023
|
2022
|
|
|
|
|
|
|
|
Operational
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily production
|
|
|
|
|
|
|
Crude oil(1)
(bbls/d)
|
1,133
|
1,274
|
(11)
|
1,181
|
1,340
|
(12)
|
NGLs(1)
(bbls/d)
|
622
|
-
|
n/a
|
201
|
-
|
n/a
|
Crude oil and
liquids(1) (bbls/d)
|
1,755
|
1,274
|
38
|
1,382
|
1,340
|
3
|
Natural gas(1)
(Mcf/d)
|
40,491
|
5,729
|
100
|
15,593
|
1,444
|
100
|
Average daily production
(boe/d)(2)
|
8,504
|
2,229
|
100
|
3,981
|
1,581
|
100
|
|
|
|
|
|
|
|
Average realized
prices(3)
|
|
|
|
|
|
|
Crude oil(1)
($/bbl)
|
72.26
|
75.10
|
(4)
|
67.80
|
85.52
|
(21)
|
NGLs(1)
($/bbl)
|
72.92
|
-
|
n/a
|
74.07
|
-
|
n/a
|
Crude oil and
liquids(1) ($/bbl)
|
72.49
|
75.10
|
(3)
|
68.72
|
85.52
|
(20)
|
Natural gas(1)
($/Mcf)
|
2.43
|
2.11
|
15
|
2.36
|
2.11
|
12
|
Realized commodity price
($/boe)(2)
|
26.53
|
48.36
|
(45)
|
33.10
|
74.43
|
(56)
|
|
|
|
|
|
|
|
Production mix (% of
production)
|
|
|
|
|
|
|
Crude oil and
liquids(1)
|
21
|
57
|
|
35
|
85
|
|
Natural gas(1)
|
79
|
43
|
|
65
|
15
|
|
|
|
|
|
|
|
|
Operating netback
($/boe)(2)
|
|
|
|
|
|
|
Realized commodity
price(3)
|
26.53
|
48.36
|
(45)
|
33.10
|
74.43
|
(56)
|
Royalties(3)
|
(5.53)
|
(15.24)
|
(64)
|
(8.38)
|
(25.37)
|
(67)
|
Operating
expenses(3)
|
(3.46)
|
(12.07)
|
(71)
|
(6.68)
|
(15.64)
|
(57)
|
Operating
netback(3)
|
17.54
|
21.05
|
(17)
|
18.04
|
33.42
|
(46)
|
|
|
|
|
|
|
|
Financial
|
|
|
|
|
|
|
($000's except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Petroleum and natural gas
sales
|
20,759
|
9,919
|
100
|
48,098
|
42,944
|
12
|
|
|
|
|
|
|
|
Cash from (used in) operating
activities
|
8,512
|
(1,189)
|
n/a
|
12,743
|
5,752
|
100
|
|
|
|
|
|
|
|
Funds flow from
operations
|
10,489
|
691
|
100
|
13,730
|
3,540
|
100
|
|
|
|
|
|
|
|
Net loss
|
(21,236)
|
(1,921)
|
100
|
(20,598)
|
(3,197)
|
100
|
Per share - basic and
diluted
|
(0.09)
|
(0.01)
|
100
|
(0.09)
|
(0.01)
|
100
|
|
|
|
|
|
|
|
Exploration capital
expenditures
|
595
|
2,290
|
(74)
|
17,638
|
9,788
|
80
|
Development capital
expenditures
|
591
|
219
|
100
|
1,311
|
1,542
|
(15)
|
Capital
expenditures(3)
|
1,186
|
2,509
|
(53)
|
18,949
|
11,330
|
67
|
|
|
|
|
|
|
|
Working capital deficit
(surplus)(3)
|
|
|
|
7,581
|
(4,992)
|
n/a
|
Principal long-term bank
debt
|
|
|
|
15,000
|
21,000
|
(29)
|
Net debt(3) - end of
period
|
|
|
|
22,581
|
16,008
|
41
|
|
|
|
|
|
|
|
Share Information (000's)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted avg. shares
outstanding:
|
|
|
|
|
|
|
Basic and diluted
|
234,213
|
217,106
|
8
|
233,487
|
213,211
|
10
|
Outstanding shares - end of
period
|
|
|
|
234,213
|
233,037
|
1
|
|
|
|
|
|
|
|
Notes:
(1) Refer to the
"Advisories - Product Type Disclosures" for further
information.
(2) In the table above and
elsewhere in this announcement, references to "boe" mean barrels of
oil equivalent that are calculated using the energy equivalent
conversion method. Refer to the "Advisories - Oil and Natural Gas Measures" for
further information.
(3) Non-GAAP financial
measure. See the "Advisories -
Non-GAAP Financial Measures" for further
information.
(4) Percentages have been
rounded to the nearest whole number and limited to increases or
decreases of 100 percent.
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
Scott Budau, Chief Financial
Officer
James Shipka, Chief Operating
Officer
|
Tel: +1 (403) 750-4487
|
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 / Ana
Ercegovic
|
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
The information provided in this
announcement contains certain 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 "expect", "plan", "anticipate",
"believe", "intend", "maintain", "continue to", "pursue", "design",
"result in", "sustain" "estimate", "potential", "growth",
"near-term", "long-term", "forecast", "contingent" 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 hereof 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 business plans, strategies, priorities
and development plans; the focus of Touchstone's 2024 capital plan,
including driving future growth, pursuing developmental drilling
activities and optimizing existing natural gas and liquids
infrastructure capacity; the intended use of proceeds and expected
timing of closing the loan agreement contemplated in the binding
term sheet; the Company's expectation that the proceeds from the
additional borrowing capacity contemplated in the binding term
sheet will fully fund the Company's 2024 capital program; the
anticipated increase in 2024 annual average production from 2024
capital spending and the cash flows therefrom; anticipated timing
of developmental and exploration drilling production; expected
drilling activities, including locations and the timing thereof;
anticipated timing of well tie-in operations and production coming
online; and Touchstone's
current and future financial position, including
the sufficiency of resources to fund future capital expenditures
and maintain financial liquidity. The Company's actual decisions,
activities, results, performance, or achievement could differ
materially from those expressed in, or implied by, such
forward-looking statements and accordingly, no assurances can be
given that any of the events anticipated by the forward-looking
statements will transpire or occur or, if any of them do, what
benefits that Touchstone will derive from them.
For further information regarding the Company's
2024 preliminary guidance and the related advisories, refer to the
announcement dated December 19, 2023 entitled "Touchstone Announces 2024 Capital Budget,
Preliminary 2024 Guidance and an Operational Update" which
is available online on our SEDAR+ profile
(www.sedarplus.ca)
and website (www.touchstoneexploration.com).
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 2023 Annual
Information Form dated March 20, 2024 which will be available under
the Company's profile on SEDAR+ (www.sedarplus.ca) 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.
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.
Non-GAAP Financial
Measures
This announcement references various
non-GAAP financial measures, non-GAAP ratios, capital management
measures and supplementary financial measures as such terms are
defined in National Instrument 52-112 Non-GAAP and Other Financial Measures
Disclosure. Such measures are not recognized measures under
Canadian Generally Accepted Accounting Principles ("GAAP") and do
not have a standardized meaning prescribed by International
Financial Reporting Accounting Standards ("IFRS") and therefore may
not be comparable to similar financial measures disclosed by other
issuers. Readers are cautioned that the non-GAAP financial measures
referred to herein should not be construed as alternatives to, or
more meaningful than, measures prescribed by IFRS, and they are not
meant to enhance the Company's reported financial performance or
position. These are complementary measures that are commonly used
in the oil and natural gas industry and by the Company to provide
shareholders and potential investors with additional information
regarding the Company's performance. Below is a description of the
non-GAAP financial measures, non-GAAP ratios, capital management
measures and supplementary financial measures disclosed
herein.
Funds flow from operations
Funds flow from operations is
included in the Company's consolidated statements of cash flows.
Touchstone considers funds flow from operations to be a key measure
of operating performance as it demonstrates the Company's ability
to generate the funds necessary to finance capital expenditures and
repay debt. Management believes that by
excluding the temporary impact of changes in non-cash operating
working capital, funds flow from operations provides a useful
measure of the Company's ability to generate cash that is not
subject to short-term movements in non-cash operating working
capital.
Operating netback
Touchstone uses operating netback as
a key performance indicator of field results. The Company considers
operating netback to be a key measure as it demonstrates
Touchstone's profitability relative to current commodity prices and
assists Management and investors with evaluating operating results
on a historical basis. Operating netback is a non-GAAP financial
measure calculated by deducting royalties and operating expenses
from petroleum and natural gas sales. The most directly comparable
financial measure to operating netback disclosed in the Company's
consolidated financial statements is petroleum and natural gas
revenue net of royalties. Operating netback per boe is a non-GAAP
ratio calculated by dividing the operating netback by total
production volumes for the period. Presenting operating netback on
a per boe basis allows Management to better analyze performance
against prior periods on a comparable basis.
Capital expenditures
Capital expenditures is a non-GAAP
financial measure that is calculated as the sum of exploration and
evaluation asset expenditures and property, plant and equipment
expenditures included in the Company's consolidated statements of
cash flows and is most directly comparable
to cash used in investing activities. Touchstone considers capital
expenditures to be a useful measure of its investment in its asset
base.
Working capital and net debt
Working capital and net debt are
capital management measures used by Management to monitor the
Company's capital structure to evaluate its true debt and liquidity
position and to manage capital and liquidity risk. Working capital
is calculated by subtracting current liabilities from current
assets as they appear on the applicable consolidated balance
sheet. Net debt is calculated by summing
the Company's working capital and the principal (undiscounted)
long-term amount of senior secured debt and is most directly comparable to total liabilities.
Net debt to funds flow from operations ratio
The Company monitors its capital
structure using a net debt to funds flow from operations ratio,
which is a non-GAAP ratio and a capital management measure
calculated as the ratio of the Company's net debt to trailing
twelve months funds flow from operations for any given
period.
Supplementary Financial Measures
Realized commodity price per boe - is comprised of petroleum and natural gas sales as
determined in accordance with IFRS, divided by the Company's total
production volumes for the period.
Royalties per boe - is
comprised of royalties as determined in accordance with IFRS,
divided by the Company's total production volumes for the
period.
Operating expenses per boe - is
comprised of operating expenses as determined in accordance with
IFRS, divided by the Company's total production volumes for the
period.
For further information, please
refer to the "Advisories - Non-GAAP Financial Measures"
section of the Company's most recent
Management's discussion and analysis for the three
months and year ended December 31, 2023 accompanying our
December 31, 2023 audited consolidated
financial statements, both of which will
be available on our
website (www.touchstoneexploration.com)
and under our SEDAR+ profile
(www.sedarplus.ca).
Oil and Natural Gas
Measures
Where applicable, natural gas has
been converted to barrels of oil equivalent (boe) based on six
thousand cubic feet (Mcf) to one barrel (bbl) 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. This conversion factor is
an industry accepted norm and is not based on either energy content
or prices.
Product Type
Disclosures
This announcement includes references
to crude oil, NGLs, natural gas, and average daily production
volumes. Under National Instrument 51-101 -
Standards of Disclosure for Oil
and Gas Activities ("NI 51-101"), disclosure of production
volumes should include segmentation by product type as defined in
the instrument. In this MD&A, references to "crude oil" refer
to "light crude oil and medium crude oil" and "heavy crude oil"
combined product types; references to "NGLs" refer to condensate;
and references to "natural gas" refer to the "conventional natural
gas" product type, all as defined in the instrument. In addition,
references to "crude oil and liquids" herein include crude oil and
NGLs.
For information regarding specific
product disclosures in accordance with NI 51-101, please refer to
the "Advisories -
Product Type Disclosures"
section in the Company's most recent Management's discussion and
analysis for the three months and year ended December 31, 2023
accompanying our December 31, 2023 audited
consolidated financial statements, both of which will be available
on our website (www.touchstoneexploration.com)
and under our SEDAR+ profile
(www.sedarplus.ca).
Abbreviations
The following abbreviations are
referenced in this announcement:
bbls/d
barrels per day
Mcf
thousand cubic
feet
boe
barrels of oil equivalent
Mcf/d
thousand cubic feet per day
boe/d
barrels of oil equivalent per day
MMcf
million cubic feet
NGLs
natural gas liquids
MMcf/d
million cubic feet per day
Touchstone Exploration Inc.
Consolidated Balance Sheets
Stated in thousands of United States dollars
As
at
|
|
December
31,
2023
|
December
31, 2022
|
|
|
|
|
Assets
|
|
|
|
Current assets
|
|
|
|
Cash
|
|
8,186
|
16,335
|
Accounts receivable
|
|
12,852
|
7,487
|
Inventory
|
|
91
|
129
|
Prepaid expenses
|
|
764
|
1,342
|
Assets held for sale
|
|
677
|
1,122
|
|
|
22,570
|
26,415
|
|
|
|
|
Exploration and evaluation
assets
|
|
5,030
|
51,352
|
Property, plant and
equipment
|
|
108,148
|
67,162
|
Restricted cash
|
|
785
|
1,021
|
Other assets
|
|
334
|
481
|
Abandonment fund
|
|
2,081
|
1,446
|
Total assets
|
|
138,948
|
147,877
|
|
|
|
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Accounts payable and accrued
liabilities
|
|
15,013
|
12,737
|
Income taxes payable
|
|
240
|
1,014
|
Current portion of bank
debt
|
|
13,000
|
6,000
|
Liabilities associated with assets
held for sale
|
|
1,898
|
1,672
|
|
|
30,151
|
21,423
|
|
|
|
|
Lease liabilities
|
|
2,888
|
1,373
|
Bank debt
|
|
14,977
|
20,962
|
Decommissioning
liabilities
|
|
9,733
|
11,182
|
Deferred income taxes
|
|
21,433
|
14,557
|
Total liabilities
|
|
79,182
|
69,497
|
|
|
|
|
Shareholders' equity
|
|
|
|
Shareholders' capital
|
|
114,965
|
114,635
|
Contributed surplus
|
|
6,166
|
4,905
|
Other comprehensive loss
|
|
(13,124)
|
(13,517)
|
Deficit
|
|
(48,241)
|
(27,643)
|
Total shareholders' equity
|
|
59,766
|
78,380
|
|
|
|
|
Total liabilities and shareholders' equity
|
|
138,948
|
147,877
|
Touchstone Exploration Inc.
Consolidated Statements of Loss and Comprehensive
Loss
Stated in thousands of United States dollars (except per share
amounts)
|
|
Year ended December
31,
|
|
|
2023
|
2022
|
|
|
|
|
Revenue
|
|
|
|
Petroleum and natural gas
sales
|
|
48,098
|
42,944
|
Less: royalties
|
|
(12,173)
|
(14,641)
|
Petroleum and natural gas revenue,
net of royalties
|
|
35,925
|
28,303
|
Other revenue
|
|
64
|
42
|
Total revenue
|
|
35,989
|
28,345
|
|
|
|
|
Expenses
|
|
|
|
Operating
|
|
9,705
|
9,022
|
General and
administration
|
|
9,451
|
7,775
|
Net finance
|
|
2,453
|
3,042
|
Net (gain) loss on asset
dispositions
|
|
(800)
|
726
|
Foreign exchange gain
|
|
(196)
|
(333)
|
Equity-based compensation
|
|
1,243
|
1,341
|
Depletion and
depreciation
|
|
6,009
|
4,333
|
Impairment
|
|
21,389
|
195
|
Other
|
|
(552)
|
794
|
Total expenses
|
|
48,702
|
26,895
|
|
|
|
|
(Loss) earnings before income taxes
|
|
(12,713)
|
1,450
|
|
|
|
|
Provision for income taxes
|
|
|
|
Current expense
|
|
1,106
|
4,648
|
Deferred expense
(recovery)
|
|
6,779
|
(1)
|
Total income tax expense
|
|
7,885
|
4,647
|
|
|
|
|
Net
loss
|
|
(20,598)
|
(3,197)
|
Currency translation
adjustments
|
|
393
|
(298)
|
Comprehensive loss
|
|
(20,205)
|
(3,495)
|
|
|
|
|
Net
loss per common share
|
|
|
|
Basic and diluted
|
|
(0.09)
|
(0.01)
|
Touchstone Exploration Inc.
Consolidated Statements of Changes in Shareholders'
Equity
Stated in thousands of United States dollars
|
|
Year ended December
31,
|
|
|
2023
|
2022
|
|
|
|
|
Shareholders' capital
|
|
|
|
Balance, beginning of
year
|
|
114,635
|
101,757
|
Private placements, net of
fees
|
|
-
|
12,269
|
Equity-based settlements
|
|
330
|
609
|
Balance, end of year
|
|
114,965
|
114,635
|
|
|
|
|
Contributed surplus
|
|
|
|
Balance, beginning of
year
|
|
4,905
|
3,466
|
Equity-based settlements
|
|
(120)
|
(215)
|
Equity-based compensation
expense
|
|
1,243
|
1,341
|
Equity-based compensation
capitalized
|
|
138
|
313
|
Balance, end of year
|
|
6,166
|
4,905
|
|
|
|
|
Other comprehensive loss
|
|
|
|
Balance, beginning of
year
|
|
(13,517)
|
(13,219)
|
Other comprehensive income
(loss)
|
|
393
|
(298)
|
Balance, end of year
|
|
(13,124)
|
(13,517)
|
|
|
|
|
Deficit
|
|
|
|
Balance, beginning of
year
|
|
(27,643)
|
(24,446)
|
Net loss
|
|
(20,598)
|
(3,197)
|
Balance, end of year
|
|
(48,241)
|
(27,643)
|
Touchstone Exploration Inc.
Consolidated Statements of Cash Flows
Stated in thousands of United States dollars
|
|
Year ended December
31,
|
|
|
2023
|
2022
|
|
|
|
|
Operating activities
|
|
|
|
Net loss
|
|
(20,598)
|
(3,197)
|
Items not involving cash from
operations:
|
|
|
|
Net (gain) loss on asset
dispositions
|
|
(800)
|
726
|
Unrealized foreign exchange
gain
|
|
(194)
|
(288)
|
Equity-based compensation
expense
|
|
1,243
|
1,341
|
Depletion and depreciation
expense
|
|
6,009
|
4,333
|
Impairment expense
|
|
21,389
|
195
|
Other
|
|
(80)
|
561
|
Deferred income tax expense
(recovery)
|
|
6,779
|
(1)
|
Decommissioning
expenditures
|
|
(18)
|
(130)
|
Funds flow from operations
|
|
13,730
|
3,540
|
Net change in non-cash operating
working capital
|
|
(987)
|
2,212
|
Cash from operating activities
|
|
12,743
|
5,752
|
|
|
|
|
Investing activities
|
|
|
|
Exploration and evaluation
expenditures
|
|
(17,638)
|
(9,788)
|
Property, plant and equipment
expenditures
|
|
(1,311)
|
(1,542)
|
Abandonment fund
expenditures
|
|
(626)
|
(160)
|
Proceeds from asset
dispositions
|
|
250
|
1,346
|
Net change in non-cash investing
working capital
|
|
(1,790)
|
(6,332)
|
Cash used in investing activities
|
|
(21,115)
|
(16,476)
|
|
|
|
|
Financing activities
|
|
|
|
Changes in restricted
cash
|
|
236
|
157
|
Net advance (repayment) of bank
debt
|
|
1,000
|
(3,000)
|
Net finance lease
payments
|
|
(692)
|
(206)
|
Issuance of common shares, net of
fees
|
|
210
|
12,663
|
Other liability payments
|
|
(469)
|
(573)
|
Net change in non-cash financing
working capital
|
|
(155)
|
11
|
Cash from financing activities
|
|
130
|
9,052
|
|
|
|
|
Decrease in cash
|
|
(8,242)
|
(1,672)
|
Cash, beginning of year
|
|
16,335
|
17,936
|
Impact of foreign exchange on
foreign denominated cash balances
|
93
|
71
|
Cash, end of year
|
|
8,186
|
16,335
|
|
|
|
|
Supplementary information for cash
from operating activities:
|
|
|
|
Interest paid in cash
|
|
2,241
|
2,273
|
Income taxes paid in cash
|
|
1,880
|
3,886
|