REG - Touchstone Explrtn. - Cascadura Well Test Results

Touchstone ExplorationAnnouncement

11/11/2024 07:00

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RNS Number : 6453L  Touchstone Exploration Inc.  11 November 2024

CASCADURA WELL TEST RESULTS

 

CALGARY, ALBERTA (November 11, 2024) - Touchstone Exploration Inc.
("Touchstone", "we", "our" or the "Company") (TSX, LSE: TXP) announces the
completion of Cascadura-2ST1 and Cascadura-3ST1 well testing.

 

Highlights

·    Cascadura-2ST1 Well: during an extended 48-hour test, Cascadura-2ST1
produced an average rate of approximately 4,950 boe/d, consisting of 26.4
MMcf/d of natural gas and 547 bbls/d of NGLs.

·    Fluid Analysis for Cascadura-2ST1: initial field analysis shows the
presence of liquids-rich natural gas with no produced water, similar to the
characteristics of the Cascadura-1ST1 well.

·    Cascadura-3ST1 Well: over a 68-hour testing period, Cascadura-3ST1
achieved an average production rate of approximately 1,100 boe/d, including
786 bbls/d of crude oil and 1.9 MMcf/d of natural gas.

·    Fluid Analysis for Cascadura-3ST1: field assessments indicate medium
API gravity crude oil with a 2 percent water cut, along with liquids-rich
natural gas.

·   Production Status: the Cascadura-2ST1 well is currently on continuous
production to the Cascadura natural gas processing facility, and the
Cascadura-3ST1 well is scheduled to commence permanent production within the
next two days.

Paul R. Baay, President and Chief Executive Officer, commented:

 

"These encouraging well test results not only validate our geological models
but also underscore the potential of the Cascadura field. With critical
infrastructure in place between the wells, we are well-positioned to drill
additional wells to further develop the field.

 

The Cascadura-2ST1 well test results are similar to those of Cascadura-1ST1,
and the well is located at the boundary of our reserves booking. The
Cascadura-3ST1 well test results are exceptionally promising, as they unlock a
new oil and natural gas play on the eastern side of Fault C, extending into
the recently acquired Rio Claro block. On a per barrel equivalent basis, oil
currently generates nearly five times the revenue of natural gas, and with a
12.5 percent royalty on the block and anticipated operating expenses below our
corporate average, the play offers strong cash flow generating capabilities.

 

Together, these wells represent a material increase to our base production,
reinforce our development strategy and open the door to a new oil play."

 

Cascadura-2ST1 Testing

 

Cascadura-2ST1 production testing commenced on November 2, 2024, with flow
tests spanning a total of 82 hours, comprised of an initial clean-up flow
period, followed by an initial shut-in period and a four-step rate test,
including a 48-hour extended flow test. All production accumulated during well
testing was processed for sales at the Cascadura natural gas processing
facility.

 

During the 48-hour extended portion of the flow test, the well produced at an
average rate of approximately 4,950 boe/d (89 percent natural gas), including
26.4 MMcf/d of natural gas and an estimated 547 bbls/d of NGLs. The bottom
hole flowing pressure of the well during this stage of testing averaged 3,497
psi through a 64 percent choke, representing a 15 percent reservoir pressure
drawdown.

 

During testing, Cascadura-2ST1 yielded 44-degree API gravity NGLs at an
average ratio of approximately 21 barrels of NGLs per MMcf of natural gas
produced. Field analysis of the produced gas indicated liquids rich natural
gas. Additional testing of fluid samples will be conducted to accurately
assess the natural gas and associated liquids composition as well as the phase
behaviour of the fluids within the reservoir.

 

The well was shut-in for a pressure build-up survey between November 6, 2024
and November 9, 2024 with further analysis to be conducted in identifying
reservoir continuity.

 

On November 9, 2024 the Cascadura-2ST1 well was placed on continuous
production at a choke restricted initial natural gas rate of approximately 20
MMcf/d and associated NGLs. This initial choke setting was selected based on
well test analysis and is designed to maximize the ultimate recovery of both
natural gas and NGLs from this section of the reservoir, ensuring optimal
long-term performance.

 

Cascadura-3ST1 Testing

 

Cascadura-3ST1 flow testing commenced on November 6, 2024, with all production
accumulated during testing processed for sales at the Cascadura natural gas
processing facility.

 

During the 68-hour flow test, the well produced at an average rate of
approximately 1,100 boe/d (71 percent oil), including an estimated 786 bbls/d
of oil and 1.9 MMcf/d of natural gas. The wellhead flowing pressure during the
flow test averaged 1,122 psi through choke settings of 25 percent to 35
percent, representing a 65 percent wellhead pressure drawdown.

 

During testing, Cascadura-3ST1 yielded 29-degree API gravity oil with a 2
percent water cut, as well as liquids rich natural gas. Additional testing of
fluid samples will be conducted to accurately assess the liquids and natural
gas compositions.

 

The well is currently shut-in for a pressure build-up survey with further
analysis to be conducted in identifying reservoir parameters and bottom hole
reservoir performance. Touchstone intends to place the Cascadura-3ST1 on
continuous production over the next two days at a choke restricted initial
rate of approximately 600 to 700 bbls/d of oil in order to optimize the well's
long-term production potential.

 

Cascadura-3ST1 openhole wireline logs also indicate an additional unperforated
sand with over 24 feet of net hydrocarbon pay. This sand is located at depths
between 5,816 to 5,840 feet in the well, uphole of the current production
zone. Given the strong flow test results from the well, this interval offers a
potential future development opportunity for the Company to pursue.

 

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
(http://www.touchstoneexploration.com/) or contact:

 

Touchstone Exploration Inc.

Paul Baay, President and Chief Executive
Officer                       Tel: +1 (403) 750-4405

Brian Hollingshead, Executive Vice President Engineering and Business
Development

 

Shore Capital (Nominated Advisor and Joint Broker)

Daniel Bush / Toby Gibbs / Tom
Knibbs
Tel: +44 (0) 207 408 4090

 

Canaccord Genuity (Joint Broker)

Adam James / Charlie
Hammond
Tel: +44 (0) 207 523 8000

 

FTI Consulting (Financial PR)

Nick Hennis / Ben Brewerton
 
Tel: +44 (0) 203 727 1000

Email: touchstone@fticonsulting.com (mailto:touchstone@fticonsulting.com)

Advisories

 

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.

 

Working Interest

 

Touchstone has an 80 percent operating working interest in the Cascadura
field, which is located on the Ortoire block onshore in the Republic of
Trinidad and Tobago. Heritage Petroleum Company Limited holds the remaining 20
percent working interest. All production figures disclosed herein are gross
volumes.

 

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", "believe",
"intend", "estimate", "potential", "growth", "long-term", "anticipate",
"forecast" and similar expressions, or are events or conditions that "will",
"would", "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; expectations of future
production rates from the Cascadura-2ST1 and Cascadura-3ST1 wells and the
timing thereof; the quality and quantity of prospective hydrocarbon
accumulations based on openhole wireline logs, including the potential uphole
zone in Cascadura-3ST1; the Company's expectation of drilling additional wells
in the Casacdura field, including the locations and timing thereof;
anticipated liquids operating expenses from Cascadura-3ST1; and the Company's
expectation of a new oil play, including its ability to generate future cash
flows. 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.

 

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 is available under the
Company's profile on SEDAR+ (www.sedarplus.ca (http://www.sedarplus.ca/) ) and
on the Company's website (www.touchstoneexploration.com
(http://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 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.

 

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,
Executive Vice President Asset Development and HSE 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.

 

Abbreviations

 

The following abbreviations are referenced in this announcement:

 

bbls(s)              barrel(s)

bbls/d               barrels per day

boe                  barrels of oil equivalent

boe/d               barrels of oil equivalent per day

MMcf                million cubic feet

MMcf/d             million cubic feet per day

NGL(s)              natural gas liquid(s)

psi                    ponds per square inch

API                   American Petroleum Institute

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