REG - Touchstone Explrtn. - 2024 YEAR-END RESERVES
06/03/2025 07:15
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RNS Number : 6174Z Touchstone Exploration Inc. 06 March 2025
2024 YEAR-END RESERVES
CALGARY, ALBERTA (March 6, 2025) - Touchstone Exploration Inc. ("Touchstone",
"we", "our" or the "Company") (TSX, LSE: TXP) announces 2024 year-end
reserves.
Touchstone's independent reserves evaluation was prepared by GLJ Ltd. ("GLJ")
with an effective date of December 31, 2024 (the "Reserves Report").
Highlights of our total proved developed producing ("PDP"), total proved
("1P"), and total proved plus probable ("2P") reserves from the Reserves
Report are provided below. Unless otherwise stated, all financial amounts
referenced herein are stated in United States dollars. Readers are further
cautioned to read the applicable advisories contained herein.
Paul Baay, President and Chief Executive Officer, commented:
"Our year-end 2024 reserves report highlights the substantial potential of our
asset base in Trinidad with the NPV10 of future net revenues of 2P reserves
valued at approximately $671 million and $309 million on a before tax and
after-tax basis, respectively. The combination of our base crude oil
production and the early-stage development of our natural gas properties
supports our ongoing transition from an exploration-driven company to one
focused on predictable production growth.
The reserve estimates for this year reflect a material balance assessment
approach based on the data collected at Cascadura. This revised methodology,
compared to the previous volumetric interpretation, aligns reserve estimates
with our forecasted production curves.
The addition of light oil reserves from the Cascadura-3ST1 discovery
underscores the significant potential of this emerging play. While the current
reserves include a limited number of future crude oil drilling locations, we
plan to expand this potential through further delineation and development in
the Rio Claro block.
A key highlight of the year is the previously announced acquisition of Shell
Trinidad Central Block Limited, which provides access to the lucrative
Trinidad liquefied natural gas market. Notably, our year-end 2024 reserves
report does not reflect any additional reserves from the proposed acquisition.
An independent evaluation of the acquired reserves will be provided following
the expected completion of the proposed transaction."
2024 Operational Highlights
· Successfully completed the Cascadura C pipeline and facility expansion,
increasing processing capacity and supporting future production growth.
· Drilled and brought onstream the Cascadura-2ST1 and Cascadura-3ST1
wells.
· Advanced the development of the CO-1 crude oil block with the drilling
and production commencement of the CO-374 and CO-375 wells.
· Delivered strong performance from our CO-1, WD-4 and WD-8 blocks through
targeted infill drilling, optimization programs, and recompletion activities,
resulting in notable increases in light and medium crude oil reserves.
· Fourth quarter production was strengthened by the successful startup of
the Cascadura-2ST1 and Cascadura-3ST1 development wells, resulting in average
quarterly net production of 5,287 boe/d and 2024 annual average net production
of 5,734 boe/d.
Year-end 2024 Reserves Overview and Highlights
Touchstone's year-end reserves highlight the successful addition of crude oil
reserves from the Cascadura-3ST1 discovery, located east of Fault-C, alongside
a revision to the natural gas and NGL reserves west of Fault-C at Cascadura.
Comprehensive data from the Cascadura field underscores the need for further
development drilling to fully realize the natural gas potential. With an
established pipeline network and infrastructure in place, the Company is
positioned for efficient and cost-effective future development.
· The net present value of future net revenues discounted at 10 percent
("NPV10") on a before tax 1P basis decreased by 5 percent to $354.4 million
and declined by 8 percent to $671 million on a 2P basis from the prior year.
· Realized after tax 1P NPV10 of $178.8 million represented a decrease
of 7 percent from the prior year and after tax 2P NPV10 declined by 10 percent
from year-end 2023 to $308.5 million.
· Relative to year-end 2023 and after 2024 production, gross 1P
reserves declined by 14 percent to 29,070 Mboe and gross 2P reserves decreased
by 26 percent to 50,063 Mboe in 2024.
· Reductions in our year-end reserves balances from 2023 reflected
technical revisions to the natural gas reserves and NGL yields at Cascadura,
reserve discoveries at Cascadura-3ST1, positive technical revisions at our
crude oil blocks, acquisition and development activities, and increased annual
production volumes in 2024.
· We continue to maintain an extensive producing reserve life index of
8.7 years 1P and 12.9 years 2P, reflecting the long producing life of our
asset base.
2024 Year-end Reserves Report Summary
Touchstone's year-end light and medium crude oil, heavy crude oil,
conventional natural gas and natural gas liquid reserves in Trinidad were
evaluated by an independent reserves evaluator, GLJ, in accordance with
definitions, standards, and procedures contained in the Canadian Oil and Gas
Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 -
Standards of Disclosure for Oil and Gas Activities ("NI 51-101").
The reserve estimates set forth below are based upon GLJ's Reserves Report
dated March 5, 2025, with an effective date of December 31, 2024. The Reserves
Report uses the average price forecasts of the three leading Canadian oil and
gas evaluation consultants (GLJ, McDaniel & Associates Consultants Ltd.,
and Sproule Associates Ltd. (collectively, the "Consultants")). All values in
this announcement are based on the three Consultants' average forecast pricing
and GLJ's estimates of future operating and capital costs as of December 31,
2024.
Additional reserves information as required under NI 51-101 will be included
in the Company's Annual Information Form, which will be filed on SEDAR+
(www.sedarplus.ca (http://www.sedarplus.ca/) ) on or before March 31, 2025.
Please refer to "Advisories: Reserves Disclosure" for further information. In
certain tables set forth below, the columns may not add due to rounding.
2024 Reserves Summary by Category
PDP 1P 2P
Total gross reserves((1)) (Mboe) 6,836 29,070 50,063
Reserve reductions((2)) (Mboe) 4,614 2,529 15,219
NPV10 before income tax((3)) ($000's) 79,380 354,425 670,965
NPV10 after income tax((3)) ($000's) 66,444 178,841 308,536
Notes:
(1) Gross reserves are the Company's working interest share before
deduction of royalty obligations.
(2) Reserve reductions exclude 2024 annual production. See "Advisories:
Oil and Gas Metrics".
(3) Based on the Consultants' average December 31, 2024 forecast prices
and costs. See "Forecast Prices and Costs" herein.
Summary of Crude Oil and Natural Gas Reserves by Product Type
Company Gross((1)) Reserves Light and Medium Crude Oil (Mbbl) Heavy Crude Oil Conventional Natural Gas (MMcf) Natural Gas Liquids (Mbbl)((2)) Total Oil Equivalent (Mboe)
(Mbbl)
Proved
Developed producing 3,661 276 17,158 40 6,836
Developed non-producing 1,232 - - - 1,232
Undeveloped 4,468 - 96,219 498 21,002
Total Proved 9,360 276 113,377 537 29,070
Probable 8,889 56 70,750 257 20,993
Total Proved plus Probable 18,249 332 184,127 794 50,063
Company Net((3)) Reserves Light and Medium Crude Oil (Mbbl) Heavy Crude Oil Conventional Natural Gas (MMcf) Natural Gas Liquids (Mbbl)((2)) Total Oil Equivalent (Mboe)
(Mbbl)
Proved
Developed producing 2,206 246 15,013 35 4,989
Developed non-producing 847 - - - 847
Undeveloped 3,318 - 84,192 435 17,785
Total Proved 6,371 246 99,205 470 23,621
Probable 6,762 50 61,906 225 17,354
Total Proved plus Probable 13,133 295 161,111 695 40,975
Notes:
(1) Gross reserves are the Company's working interest share before
deduction of royalty obligations.
(2) NGLs are comprised of 100% condensate.
(3) Net reserves are the Company's working interest share after the
deduction of royalty obligations.
Summary of Net Present Values of Future Net Revenues
Net Present Values Before Income Taxes((1)) ($000's) Undiscounted Discounted at 5% Discounted at 10% Discounted at 15% Discounted at 20%
Proved
Developed producing 107,621 91,031 79,380 70,773 64,166
Developed non-producing 35,598 27,992 23,371 20,155 17,733
Undeveloped 399,971 313,410 251,674 206,219 171,844
Total Proved 543,190 432,432 354,425 297,147 253,743
586,975 420,133 316,540 247,058 197,997
Probable 586,975 420,133 316,540 247,058 197,997
Total Proved plus Probable 1,130,164 852,565 670,965 544,204 451,739
Net Present Values After Income Taxes((1)(2)) ($000's) Undiscounted Discounted at 5% Discounted at 10% Discounted at 15% Discounted at 20%
Proved
Developed producing 76,254 72,452 66,444 60,866 56,103
Developed non-producing 12,725 11,918 11,115 10,407 9,762
Undeveloped 169,089 129,627 101,282 80,492 64,930
Total Proved 258,068 213,997 178,841 151,765 130,794
Probable 237,847 173,085 129,696 99,906 78,732
Total Proved plus Probable 495,915 387,081 308,536 251,671 209,526
Notes:
(1) Based on the three Consultants' average December 31, 2024 forecast
prices and costs. See "Forecast Prices and Costs" herein.
(2) The after-tax net present values prepared by GLJ in the evaluation
of the Company's petroleum and natural gas assets presented herein are
calculated by considering current Trinidad tax regulations and are based on
the Company's estimated tax pools and non-capital losses as of December 31,
2024. The values reflect the expected income tax burden on the assets on a
consolidated basis. Values do not represent an estimate of the value at the
business entity level or consider tax planning, which may be significantly
different. See "Advisories: Unaudited Financial Information".
Reconciliation of Gross Reserves by Product Type
The following table sets forth a reconciliation of the Company's total gross
proved, gross probable, and gross proved plus probable reserves as of December
31, 2024, by product type against such reserves as at December 31, 2023, based
on forecast prices and cost assumptions.
Reserves Category and Factors Light and Medium Crude Oil (Mbbl) Heavy Crude Oil Conventional Natural Gas (MMcf) Natural Gas Liquids (Mbbl)((1)) Total Oil Equivalent (Mboe)
(Mbbl)
Total Proved
December 31, 2023((2)) 8,538 234 140,743 1,467 33,696
Discoveries((3)) 375 - 15 - 378
Extensions and improved recovery((4)) 763 - - - 763
Technical revisions((5)) 552 63 (17,758) (882) (3,227)
Acquisitions((6)) 162 - - - 162
Dispositions((6)) (619) - - - (619)
Economic factors((7)) 15 - (7) - 14
Production (425) (21) (9,616) (48) (2,097)
December 31, 2024 9,360 276 113,377 537 29,070
Total Probable
December 31, 2023((2)) 8,084 58 145,180 1,344 33,683
Discoveries((3)) 609 - - - 609
Extensions and improved recovery((4)) 365 - - - 365
Technical revisions((5)) (108) (10) (74,422) (1,088) (13,609)
Acquisitions((6)) 45 - - - 45
Dispositions((6)) (115) - - - (115)
Economic factors((7)) 8 8 (8) - 15
December 31, 2024 8,889 56 70,750 257 20,993
Total Proved plus Probable
December 31, 2023((2)) 16,622 292 285,923 2,811 67,379
Discoveries((3)) 984 - 15 - 986
Extensions and improved recovery((4)) 1,129 - - - 1,129
Technical revisions((5)) 444 53 (92,180) (1,969) (16,836)
Acquisitions((6)) 207 - - - 207
Dispositions((6)) (734) - - - (734)
Economic factors((7)) 23 8 (15) - 28
Production (425) (21) (9,616) (48) (2,097)
December 31, 2024 18,249 332 184,127 794 50,063
Notes:
(1) NGLs are comprised of 100 percent condensate.
(2) Prior year reserve estimates per GLJ's independent reserves
evaluation dated February 29, 2024 with an effective date of December 31,
2023.
(3) Discoveries are associated with the positive evaluation of
Cascadura-3ST1.
(4) Reserve amounts for Infill Drilling, Extensions and Improved
Recovery are combined and reported as "Extensions and Improved Recovery".
(5) Technical revisions factor includes all changes in reserves due to
well performance and previously booked wells which were drilled in the year.
(6) Touchstone completed an asset swap with a third party, exchanging
the Company's interest in the San Francique field for the counterparty's
interest in the Balata East EPSC effective June 1, 2024. Touchstone disposed
its working interest in the CO-2 block effective August 1, 2024.
(7) Economic factors are the change in reserves exclusively due to
changes in pricing.
As of December 31, 2024, gross proved plus probable reserves were 50,063 Mboe,
reflecting a decrease of 17,316 Mboe (26 percent) from the 67,379 Mboe
reported the previous year.
Compared to December 31, 2023, proved plus probable light and medium crude oil
reserves increased by 1,627 Mbbl, driven primarily by oil discoveries at
Cascadura, positive technical revisions, enhanced recovery, and drilling
extensions at the WD-4, WD-8, CO-1, and Balata East blocks. These gains were
partially offset by 2024 annual production and net acquisition and disposition
activities at the San Francique, CO-2, and Balata East blocks. Proved plus
probable heavy crude oil reserves rose by 40 Mbbl year-over-year, reflecting
positive technical revisions at our Fyzabad property, partially offset by 2024
production.
Conversely, proved plus probable conventional natural gas reserves declined by
101,796 MMcf, primarily due to technical revisions at Cascadura and annual
production from the Cascadura and Coho fields.
In addition, proved plus probable NGL reserves fell by 2,017 Mbbl, attributed
to lower forecasted NGL yields at Cascadura and 2024 production.
Future Development Costs
The following table provides information regarding the development costs
deducted in the estimation of the Company's future net revenue using forecast
prices and costs as included in the Reserves Report.
Year ($000's) 1P 2P
2025 20,570 25,875
2026 29,691 46,745
2027 33,462 40,116
2028 22,569 62,905
2029 17,967 27,404
Thereafter - -
Total undiscounted 124,259 203,045
Total discounted at 10% per year 99,373 159,561
The following table sets forth the changes in undiscounted future development
costs ("FDC") included in the Reserves Report against such costs in our
December 31, 2023, reserves report prepared by GLJ dated February 29, 2024.
($000's unless otherwise stated) 1P 2P
Decrease in forecasted well costs (1,660) (2,460)
Increase in forecasted well locations 47,953 64,266
Increase in forecasted facility and pipeline costs 560 563
Total increase in FDC from 2023 46,853 62,369
Total increase in FDC from 2023 (%) 61 44
Forecast Pricing and Costs
Forecast pricing and costs are prices and costs that are generally acceptable,
in the opinion of GLJ, as being a reasonable outlook of the future as of the
evaluation effective date. The forecast cost assumptions consider inflation
with respect to future operating and capital costs. The following table sets
forth the benchmark reference commodity prices and inflation rates reflected
in the Reserves Data as of December 31, 2024. These price assumptions were
provided to the Company by GLJ and represented the average price forecast of
the three Consultants as of the date of the Reserves Report.
Consultants Average Price Forecast
Forecast Year Brent Spot Crude Oil((1)) Henry Hub Natural Gas((1)) Inflation Rate
($/bbl) ($/MMBtu) (% per year)
2025 75.58 3.31 0.0
2026 78.51 3.73 2.0
2027 79.89 3.85 2.0
2028 81.82 3.93 2.0
2029 83.46 4.01 2.0
2030 85.13 4.09 2.0
2031 86.83 4.17 2.0
2032 88.57 4.26 2.0
2033 90.31 4.34 2.0
2034 92.08 4.43 2.0
Thereafter +2.0% / year +2.0% / year 2.0
Note:
(1) This summary table identifies benchmark reference pricing schedules
that might apply to a reporting issuer. Product sales prices will reflect
these reference prices with further adjustments for specific marketing
arrangements, quality differentials and transportation to point of sale.
January 2025 Production Volumes
In January 2025, we attained average net sales volumes of 4,800 boe/d, as the
Cascadura-3ST1 well was shut in for 13 days to accommodate the drilling rig
move to the Cascadura B pad. January 2025 net sales volumes were comprised of:
· average net natural gas sales volumes of 21.3 MMcf/d (3,550
boe/d); and
· average net crude oil and natural gas liquid sales volumes of
1,250 bbls/d.
Drilling Update
Drilling operations at Cascadura-4 have been temporarily suspended to
facilitate critical repairs on the drilling rig. During drilling operations,
one of the three mud pumps experienced a mechanical failure, necessitating an
operational pause to ensure safety and efficiency. The well, spudded on
January 19, 2025, had reached a depth of 4,500 feet, and has now been plugged
back to the base of the surface casing at 1,135 feet.
A replacement pump is expected to arrive in Trinidad by mid-March 2025, after
which installation will take place. Drilling will resume once the new pump is
in place, allowing operations to continue as planned.
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, EVP Engineering and Business Development
James Shipka, EVP, 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
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.
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" 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; the potential completion of the
proposed asset acquisition; the Company's expectations to conduct development
activities in the Rio Claro block; the Company's expectation to resume
drilling once the required drilling rig repairs are completed; the Company's
expectation that it is positioned for efficient and cost-effective future
development; estimated crude oil, NGL and natural gas reserves and the net
present values of future net revenue therefrom; and the forecasted future
production, commodity prices, inflation rates and all future costs used by GLJ
in their evaluation. 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.
Information and statements relating to reserves are by their nature
forward-looking statements, as they involve the implied assessment, based on
certain estimates and assumptions, that the reserves described exist in the
quantities predicted or estimated, and can be profitably produced in the
future. The recovery and reserve estimates of Touchstone's reserves provided
herein are estimates only, and there is no guarantee that the estimated
reserves will be recovered. Consequently, actual results may differ materially
from those anticipated in the forward-looking statements (see "Advisories:
Reserves Disclosure").
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.
Reserves Disclosure
The disclosure in this announcement summarizes certain information contained
in the Reserves Report but represents only a portion of the disclosure
required under NI 51-101. Full disclosure with respect to the Company's
reserves as at December 31, 2024 will be contained in the Company's Annual
Information Form for the year ended December 31, 2024 which will be filed on
SEDAR+ (www.sedarplus.ca (http://www.sedarplus.ca/) ) on or before March 31,
2025. All reserves values, future net revenue and ancillary information
contained in this announcement are derived from the Reserves Report unless
otherwise noted. Unless otherwise noted, reserve references in this
announcement are Company "gross reserves". Company gross reserves are the
Company's total working interest reserves before the deduction of any
royalties payable by the Company. Estimates of reserves and future net revenue
for individual properties may not reflect the same level of confidence as
estimates of reserves and future net revenue for all properties, due to the
effect of aggregation. All reserves assigned in the Reserves Report are
located onshore in the Republic of Trinidad and Tobago and presented on a
consolidated basis.
The recovery and reserve estimates of Touchstone's crude oil, NGL and natural
gas reserves provided herein are estimates only, and there is no guarantee
that the estimated reserves will be recovered. Actual reserves may eventually
prove to be greater than or less than the estimates provided herein. There are
numerous uncertainties inherent in estimating quantities of petroleum and
natural gas reserves and the future cash flows attributed to such reserves.
The reserve and associated cash flow information set forth herein are
estimates only. This announcement summarizes the crude oil, NGL and natural
gas reserves of the Company and the net present values of future net revenue
for such reserves using forecast prices and costs as at December 31, 2024
prior to provision for interest and finance costs, general and administration
expenses, and the impact of any financial derivatives. It should not be
assumed that the estimates of future net revenues presented herein represent
the fair market value of the reserves. There is no assurance that the forecast
prices and costs assumptions will be attained, and variances could be
material.
In the Reserves Report, GLJ forecasted reserve volumes and future cash flows
based upon current and historical well performance through to the economic
production limit of individual wells. Notwithstanding established precedence
and contractual options for the continuation and renewal of the Company's
existing licence, sub-licence and marketing agreements, in many cases the
forecasted economic limit of individual wells is beyond the current term of
the relevant agreements. There is no certainty as to any renewal of the
Company's existing exploration, production, and marketing arrangements.
"Proved Developed Producing" reserves are those reserves that are expected to
be recovered from completion intervals open at the time of the
estimate. These reserves may be currently producing, or if shut-in, they must
have previously been on production, and the date of resumption of production
must be known with reasonable certainty.
"Proved" reserves are those reserves that can be estimated with a high degree
of certainty to be recoverable. It is likely that the actual remaining
quantities recovered will exceed the estimated proved reserves.
"Probable" reserves are those additional reserves that are less certain to be
recovered than proved reserves. It is equally likely that the actual
remaining quantities recovered will be greater or less than the sum of the
estimated proved plus probable reserves.
Certain terms used in this announcement but not defined are defined in NI
51-101, CSA Staff Notice 51-324 - Revised Glossary to NI 51-101 Standards of
Disclosure for Oil and Gas Activities ("CSA 51-324") and/or the COGE Handbook
and, unless the context otherwise requires, shall have the same meanings
herein as in NI 51-101, CSA 51-324 and the COGE Handbook, as the case may be.
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 might be misleading, particularly if
used in isolation. As well, given that the value ratio, based on the current
price of crude oil to natural gas, is significantly different from the 6:1
energy equivalency ratio, using a 6:1 conversion ratio may be misleading as an
indication of value.
Oil and Gas Metrics
This announcement contains oil and gas metrics that are commonly used in the
oil and gas industry including reserves additions (reductions) and reserve
life index ("RLI"). These metrics have been prepared by Management and do not
have standardized meanings or standardized methods of calculation, and
therefore such measures may not be comparable to similar measures presented by
other companies and should not be used to make comparisons. Such metrics have
been included herein to provide readers with additional measures to evaluate
the Company's performance; however, such measures are not reliable indicators
of the future performance of the Company, and future performance may not
compare to the performance in prior periods, and therefore such metrics should
not be unduly relied upon. The Company uses these oil and gas metrics for its
own performance measurements and to provide shareholders with measures to
compare the Company's operations over time. Readers are cautioned that the
information provided by these metrics, or that can be derived from the metrics
presented in this announcement, should not be relied upon for investment
purposes.
Reserve additions (reductions) are calculated as the change in reserves from
the beginning to the end of the applicable period excluding period production.
Management uses this measure to determine the relative change of its reserves
base over a period of time.
RLI is calculated by dividing the applicable reserves by forecasted 2025
production volumes derived from the Reserve Report.
Unaudited Financial Information
The Company's estimated income tax pools and non-capital losses as at December
31, 2024 were incorporated into the after-tax net present values prepared by
GLJ in the Reserves Report. These figures are based on unaudited estimated
results and are subject to the same limitations as discussed in the
forward-looking statements advisory disclosed herein. These estimated results
are subject to change upon completion of the Company's audited financial
statements for the year ended December 31, 2024, and changes could be
material. Touchstone anticipates filing its audited consolidated financial
statements and related management's discussion and analysis for the year ended
December 31, 2024 on SEDAR+ (www.sedarplus.ca (http://www.sedarplus.ca/) ) on
March 20, 2025.
Supplemental Information Regarding Product Types
This announcement includes references to fourth quarter 2024, annual 2024 and
January 2025 average daily production. The following table provides production
by product type composition as defined by NI 51-101.
Period Light and Medium Crude Oil (bbls/d) Heavy Crude Oil Conventional Natural Gas (Mcf/d) Natural Gas Liquids (bbls/d) Total Oil Equivalent (boe/d)
(bbls/d)
Fourth quarter of 2024 1,245 65 23,136 121 5,287
Annual 2024 1,161 59 26,290 132 5,734
January 2025 1,140 65 21,298 45 4,800
In this announcement, any 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 NI 51-101. Any
references to "crude oil and liquids" herein include crude oil and NGLs.
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 referenced in this announcement have the meanings
set forth below:
bbl(s) barrel(s)
bbls/d barrels per day
Mbbl thousand barrels
Mcf thousand cubic feet
MMcf million cubic feet
MMBtu million British Thermal Units
NGL(s) natural gas liquid(s)
boe barrels of oil equivalent
boe/d barrels of oil equivalent per day
Mboe thousand barrels of oil equivalent
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