REG - Touchstone Explrtn. - Touchstone Exploration Operational Update

Touchstone ExplorationAnnouncement

Mon 07:00

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RNS Number : 5970Y  Touchstone Exploration Inc.  30 March 2026

 

OPERATIONAL UPDATE

 

CALGARY, ALBERTA (March 30, 2026) - Touchstone Exploration Inc. ("Touchstone",
"we", "our" or the "Company") (TSX, LSE: TXP) provides an update on its recent
operational activities in the Republic of Trinidad and Tobago.

 

Highlights

·      Carapal Ridge 3 onstream: The Carapal Ridge 3 ("CR-3") well was
successfully tied into the Central block natural gas facility and brought
onstream on March 28, 2026. The well is currently flowing natural gas and
condensate as it continues to recover drilling and completion fluids.

·      Central block throughput growth: Since the Central block
acquisition, gross natural gas throughput (excluding Coho-1 volumes) has
increased from approximately 16 MMcf/d to 19 MMcf/d through optimization,
rising further to approximately 21.5 MMcf/d following the startup of CR-3.
During the current cleanup phase, CR-3 has demonstrated intermittent peak
rates of up to 5.7 MMcf/d during liquid offloading.

·      Cascadura compressor progress: The Cascadura facility booster
compressor successfully completed run testing in Houston. The unit is
currently in transit to Trinidad, with arrival at port expected in April 2026
and commissioning targeted for May 2026.

·      Oil block drilling: The Company successfully drilled the FR-1835
well on the WD-8 block, encountering approximately 290 feet of net pay. The
drilling rig has since spudded the second well in a four-well campaign.

·      Production update: Average net sales volumes for January and
February 2026 were 4,778 boe/d, consisting of approximately 20.5 MMcf/d of
natural gas and 1,357 bbls/d of crude oil and liquids.

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

 

"Our current strategy is twofold: maximizing the utilization of existing
excess capacity in our processing facilities through targeted drilling and
deploying capital toward our highest-priced sales contracts to optimize
project returns. The CR-3 well achieves both objectives, adding immediate
production while allowing us to benefit from strengthening LNG market
fundamentals and improved pricing.

 

As the first new well in the field in over 17 years, our team was successful
in bringing CR-3 online and into the plant. In line with the performance of
historical wells in this field, the cleanup process is expected to take
several weeks, and we will provide further updates as stabilized rates are
established.

 

The Central block acquisition has successfully marked our entry into the LNG
market. By increasing throughput without incurring additional incremental
operating costs, we are leveraging our infrastructure to capture higher-value
sales. Simultaneously, our legacy crude oil blocks continue to provide
low-risk production growth, funded by the strategic disposition of non-core
assets last year. Finally, the upcoming Cascadura compressor installation is a
vital investment that is expected to stabilize short-term production and
extend the long-term economic life of the field."

 

Central Block

 

The CR-3 well commenced production on March 28, 2026, and is currently flowing
natural gas, 58-degree API condensate, and drilling and completion fluids.
While initial deliverability is currently being impacted by mud losses and
liquids in the wellbore, the well continues to clean up drilling and
completion fluids to the facility. Increased production from CR-3 is expected
to accelerate the fulfillment of gas volumes committed under "deliver or pay"
requirements, enabling a strategic shift toward the Company's higher-priced
LNG sales contracts.

 

Since the May 2025 acquisition, Touchstone has executed an active optimization
program focused on reducing facility operating costs and increasing plant
throughput. Average natural gas throughput volumes for the Central block
during January and February 2026 were approximately 3,435 boe/d (net 2,233
boe/d).

Realized LNG pricing (prior to fees) for the period was $6.74/MMbtu in January
and an estimated $3.98/MMbtu in February, supported by strong Henry Hub
pricing early in the year. We expect continued pricing strength in March,
driven by international LNG market dynamics and geopolitical supply
disruptions. In contrast to the variable LNG market, Ortoire volumes,
including Cascadura and Coho production, continue to receive a fixed natural
gas price of $2.33/MMbtu.

 

Cascadura Compressor

 

The Cascadura booster compressor successfully completed a two-day run test in
Houston, Texas during February 2026 and is currently in transit to Trinidad.
Upon its expected arrival in April, the unit will be transported to the
Cascadura facility for installation, with commissioning targeted for May 2026.

 

The unit is designed to mitigate elevated sales pipeline pressures, which
currently range from 650 to 750 psi and constrain production. By reducing
wellhead backpressure, the compressor is expected to improve both production
rates and overall operational stability at the facility.

 

Oil Blocks

 

Following the December 2025 asset swap of the non-core Fyzabad property for
three turnkey development wells, the Company began a four-well drilling
campaign on the WD-8 and WD-4 blocks in early March 2026.

 

The first well, FR-1835, was spud on March 7, 2026 and reached total depth on
March 16, 2026. Wireline logs indicate approximately 290 feet of net
hydrocarbon pay. This well was drilled ahead of schedule, with all turnkey
drilling costs covered by the operator, apart from certain ancillary drilling
equipment costs. The second well, FR-1836, was spud on March 26, 2026, and is
currently drilling. Upon reaching total depth on FR-1836, the drilling rig
will demobilize, and completion and tie-in operations will proceed for both
wells. The rig is then expected to move to the WD-4 block in the third quarter
of 2026 to drill two additional wells.

 

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 R. Baay, President and Chief Executive
Officer                   Tel: +1 (403) 750-4487

Brian Hollingshead, EVP Engineering and Business Development

 

Canaccord Genuity (Nominated Advisor and Joint Broker)

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

 

Cavendish Capital Markets Limited (Joint Broker)

Neil McDonald / Derrick Lee / Graham
Hall                                  Tel:
+44 (0) 131 220 6939

 

FTI Consulting (Financial PR)

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

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

 

Advisories

 

Certain information contained in this announcement would have been deemed
inside information as stipulated under the UK version of the EU Market Abuse
Regulation (2014/596) which is part of UK law by virtue of the European Union
(Withdrawal) Act 2018, as amended and supplemented from time to time, until
the release of this announcement.

 

Working Interest

 

Touchstone holds a 65 percent operating working interest in the Central block,
with Heritage Petroleum Company Limited ("Heritage") holding the remaining 35
percent participating interest. Unless otherwise noted, all Central block
natural gas throughput volumes referenced herein are reported as gross
volumes.

 

The Company also holds an 80 percent working interest in the Cascadura field,
located on the Ortoire block, with Heritage holding the remaining 20 percent
working interest. Additionally, Touchstone has a 100 percent working interest
in the WD-8 block via a Lease Operatorship Agreement with Heritage.

 

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",
"estimate", "potential", "anticipate", "forecast", "pursue", "aim", "intends",
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; expected and field estimated
Central block natural gas throughput and production rates following the tie-in
of the CR-3 well, including the timing and success of well cleanup operations;
the timing of the delivery, installation, and commissioning of the Cascadura
booster compressor and its anticipated impact on production stability and
wellhead backpressures; the success of the ongoing four-well drilling campaign
on the WD-8 and WD-4 blocks, including the timing of drilling, completions and
tie-ins; the estimated hydrocarbon net pay of FR-1835 based on internal
interpretations of wireline logs, which may not be indicative of ultimate
production or reserves; the potential for gas sales under specific LNG
contracts, including the Company's expectation that realized pricing will be
higher than current pricing and the impact of international benchmarks and
geopolitical disruptions on future pricing; future drilling opportunities
within the Ortoire and Central blocks; the Company's expectation of improved
LNG market fundamentals; and Touchstone's current and future financial
position, including the Company's liquidity and the sufficiency of resources
to fund future capital expenditures. 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 2024
Annual Information Form dated March 19, 2025 which is available on the
Company's profile on SEDAR+ (www.sedarplus.ca (http://www.sedarplus.ca/) ) and
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 Gas Measures

 

To provide a single unit of production for analytical purposes, natural gas
production has been converted mathematically to barrels of oil equivalent. The
Company uses the industry-accepted standard conversion of six thousand cubic
feet of natural gas to one barrel of oil (6 Mcf = 1 bbl). The 6:1 boe ratio is
based on an energy equivalent conversion method primarily applicable at the
burner tip. It does not represent a value equivalency at the wellhead and is
not based on either energy content or current prices. While the boe ratio is
useful for comparative measures and observing trends, it does not accurately
reflect individual product values and may be misleading, particularly if used
in isolation, as the value ratio between crude oil and natural gas based on
current commodity prices may differ significantly from the 6:1 energy
equivalency ratio.

 

Product Type Disclosures

 

This announcement includes references to January 2026 and February 2026
average daily production. In accordance with NI 51-101 Standards of Disclosure
for Oil and Gas Activities ("NI 51-101"), disclosure of production volumes
must include segmentation by product type as defined in the instrument. In
this announcement, references to "crude oil and liquids" include the combined
product types light and medium crude oil, condensate and propane, and
references to "natural gas" refer to conventional natural gas, all as defined
in the instrument.

 

The Company's average production for January and February 2026 consist of the
following product types as defined in NI 51-101 using a conversion of 6 Mcf to
1 boe where applicable.

 

 Period         Light and Medium Crude Oil (bbls/d)  Condensate (bbls/d)  Other NGLs (bbls/d)  Conventional Natural Gas (Mcf/d)  Total Oil Equivalent (boe/d)

 January 2026   887                                  134                  299                  20,877                            4,800
 February 2026  950                                  137                  311                  20,145                            4,755
 Average        917                                  136                  304                  20,529                            4,778

 

Competent Persons Statement

 

In accordance with the AIM Rules for Companies, the technical information
contained in this announcement has been reviewed and approved by Brian
Hollingshead, Executive Vice President, Engineering and Business Development
of Touchstone Exploration Inc. Mr. Hollingshead is a qualified person as
defined in the London Stock Exchange's Guidance Note for Mining and Oil and
Gas Companies and is a member of the Association of Professional Engineers and
Geoscientists of Alberta. Mr. Hollingshead holds a Bachelor of Science in
Electrical Engineering from the University of Alberta and has over 20 years of
oil and gas exploration and development experience. For the purposes of UK MAR
and Article 2 of the binding technical standards published by the Financial
Conduct Authority in relation to MAR as regards Commission Implementing
Regulation (EU) 2016/1055, the person responsible for the release of this
announcement is Paul Baay, President and Chief Executive Officer.

 

Abbreviations

 

The following abbreviations are referenced in this announcement:

 

bbls/d               barrels per day

MMcf/d             million cubic feet per day

boe/d               barrel of oil equivalent per day

psi                    pounds per square inch

LNG                  liquefied natural gas

MMbtu              million British thermal units

API                   American Petroleum Institute

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