REG - Touchstone Explrtn. - TOUCHSTONE ANNOUNCES ORTOIRE OPERATIONAL UPDATE

Touchstone ExplorationAnnouncement

24/08/2023 07:15

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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 (mailto: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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