REG - Touchstone Explrtn. - Execution of Rio Claro Licence

Touchstone ExplorationAnnouncement

05/11/2024 07:00

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RNS Number : 9660K  Touchstone Exploration Inc.  05 November 2024

EXECUTION OF LICENCE FOR RIO CLARO BLOCK

 

CALGARY, ALBERTA (November 5, 2024) - Touchstone Exploration Inc.
("Touchstone", "we", "our" or the "Company") (TSX, LSE: TXP) announces that
Primera Oil and Gas Limited ("POGL"), our wholly owned Trinidadian subsidiary,
executed an Exploration and Production (Public Petroleum Rights) licence for
the Rio Claro block (the "Rio Claro Licence") on November 4, 2024.

 

The Rio Claro Licence has been formally entered into by POGL, the Government
of Trinidad and Tobago, the Trinidad and Tobago Ministry of Energy and Energy
Industries ("MEEI"), and a subsidiary of the National Gas Company of Trinidad
and Tobago ("NGC"). POGL holds an 80 percent operating working interest in the
Rio Claro Licence, while NGC retains the remaining 20 percent. Like the
Company's Charuma, Cipero and Ortoire licences, the Rio Claro Licence
initially has a six-year exploration term, with the possibility of a 19-year
extension for areas where commercial discoveries are approved by the MEEI.

 

Strategically located adjacent to the Company's Ortoire block, the Rio Claro
Licence acreage surrounds the recently acquired Balata East field, marking a
vital extension of Touchstone's exploration and development focus within the
Herrera Formation fairway. Proprietary seismic data highlights several
promising Herrera Formation anomalies, which extend from the Ortoire block
into the Rio Claro Licence acreage, situated in structurally favorable up-dip
positions. Notably, Touchstone's Cascadura-3ST1 discovery within the Ortoire
block appears to extend into the Rio Claro block. Furthermore, seismic
interpretation reveals that both the Royston anomaly in the Herrera Formation
and the Kraken anomaly in the Cretaceous Formation extend into the Rio Claro
Licence acreage.

 

With existing sales infrastructure at Ortoire and Balata East, any future
discoveries of liquid hydrocarbons or natural gas within the Rio Claro block
can be seamlessly integrated into production.

 

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

 

"The issuance of the Rio Claro License aligns with the commencement of
production from the Cascadura C well pad. 3D seismic data indicates that a
substantial portion of the Cascadura structure extends into the Rio Claro
License area. This creates a significant opportunity, as any potential natural
gas discoveries on this block can seamlessly integrate into our newly
commissioned gathering system at the Cascadura C location, situated near the
western boundary of the Rio Claro acreage. Notably, these resources will be
marketed under a distinct natural gas arrangement, separate from our existing
Ortoire agreement.

 

Subject to regulatory approvals, we anticipate drilling the first commitment
well on this block originating from the Cascadura pad C surface location and
targeting a bottom-hole location within the new Rio Claro License.

 

Beyond its strategic alignment with the Cascadura field, the Rio Claro
property adds considerable value by granting us full control over the Kraken
Cretaceous prospect. Additionally, it enhances our position on the highly
prospective Herrera fairway, with updip closures on several promising
prospects."

 

In January 2023, POGL entered into an asset exchange agreement with a
privately held Trinidadian entity, involving the exchange of specific onshore
assets in Trinidad with no cash consideration. Under the terms of the initial
agreement, POGL agreed to transfer its 100 percent working interests in the
Fyzabad, San Francique, and Barrackpore producing blocks in exchange for the
counterparty's working interests in the Rio Claro Licence, Balata East, and
Balata East Deep Horizons blocks.

 

The asset swap was contingent upon the counterparty obtaining an extension of
the Rio Claro Licence. However, due to regulatory delays in securing the
extension, the parties amended the agreement in October 2023. This
supplemental agreement divided the asset swap into two potential exchanges.
The first exchange, involving POGL's 100 percent working interest in the
privately leased San Francique field for the counterparty's 100 percent
working interest in the Balata East block, was completed effective June 1,
2024. As POGL directly negotiated the Rio Claro Licence with the MEEI, the
completion of this negotiation marked the conclusion of the transaction, and
the second asset exchange, which lapsed on August 31, 2024, will no longer be
pursued by Touchstone.

 

 Summary of the Rio Claro Licence

 Gross acreage                                                             31,983
 POGL operating working interest                                           80 percent
 NGC working interest                                                      20 percent
 Minimum work commitments:((1))
 Geological studies                                                        Conduct five studies
 Reprocess 3D seismic                                                      130 square kilometres
 Exploration drilling                                                      Three wells
 Financial obligations over the six-year initial licence term((1)(2))      US$2.4 million
 Notes:

 (1)    Gross reserves are the Company's working interest share before
 deduction of royalties.

 (2)    Reserve additions exclude period production. See "Advisories: Oil
 and Gas Metrics".

 (3)    Based on the three Consultants' average December 31, 2022 forecast
 prices and costs. See "Forecast prices and costs".

 

Notes:

(1)   POGL is responsible for 100 percent of the exploration minimum work
commitments and financial obligations over the initial six-year exploration
term of the Rio Claro Licence.

(2)   Financial obligations represent estimated amounts payable pursuant to
the Rio Claro License, which include bonuses, lease payments and surface
rental costs over the initial six year licence term.

 

For further details, including updated 3D mapping of the Rio Claro Licence
acreage, Touchstone's latest corporate presentation is available on our
website: www.touchstoneexploration.com (http://www.touchstoneexploration.com)
.

 

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
(https://url.avanan.click/v2/___http:/www.touchstoneexploration.com/___.YXAxZTpzaG9yZWNhcDphOm86NjhmMTNlYmU3ZjdlZDY3NWJjYWUxOWVmYTQ1NDRiZWY6NjozZTEzOjE1YmU5NzYwODE4MjE4YzI5YzY4ZDVjMGMzYTI2YzMwZTZjZGI1N2QzMmYwY2MxOThkYmVjMWVkMTFlMmMzZGI6cDpG)
or contact:

 

Touchstone Exploration Inc.

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

James Shipka, Executive Vice President Asset Development and HSE

 

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)

 

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.

 

Advisory Regarding 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 prospectivity of the Rio
Claro Licence and the potential of identifying natural gas prospects; and the
anticipated exploration activities to be conducted in connection with the Rio
Claro Licence including future drilling activities, locations and ultimate
production therefrom.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
(https://url.avanan.click/v2/___http:/www.sedarplus.ca/___.YXAxZTpzaG9yZWNhcDphOm86NjhmMTNlYmU3ZjdlZDY3NWJjYWUxOWVmYTQ1NDRiZWY6Njo4MzU3OmMxMDY0ZGE0NzgzZjQ1N2I1YmM5Y2FlZGEwYWUzNTMzZjMzMDllMDc2M2E1NjY3YmRkMWYwMDI2N2JhM2I3MTc6cDpG)
) and on the Company's website (www.touchstoneexploration.com
(https://url.avanan.click/v2/___http:/www.touchstoneexploration.com/___.YXAxZTpzaG9yZWNhcDphOm86NjhmMTNlYmU3ZjdlZDY3NWJjYWUxOWVmYTQ1NDRiZWY6NjozZTEzOjE1YmU5NzYwODE4MjE4YzI5YzY4ZDVjMGMzYTI2YzMwZTZjZGI1N2QzMmYwY2MxOThkYmVjMWVkMTFlMmMzZGI6cDpG)
). 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.

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