REG - Touchstone Explrtn. - 2025 YEAR-END RESERVES

Touchstone ExplorationAnnouncement

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RNS Number : 2463U  Touchstone Exploration Inc.  25 February 2026

2025 YEAR-END RESERVES

 

CALGARY, ALBERTA (February 25, 2026) - Touchstone Exploration Inc.
("Touchstone", "we", "our" or the "Company") (TSX, LSE: TXP) announces 2025
year-end reserves. Touchstone's independent reserves evaluation was prepared
by GLJ Ltd. ("GLJ") with an effective date of December 31, 2025 (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 reserves report highlights the strategic integration of the
Central block into our producing reserve base, establishing a new pillar for
LNG-linked growth alongside our stable oil production and Ortoire natural gas
assets. This year's report also reflects the expansion of our gas marketing
portfolio, underpinned by fixed-price sales at Ortoire and high-value LNG
contracts tied to Central block production.

 

While data from the Cascadura-5 well necessitated a downward revision to our
Block B reserves, Block A remains on forecast and continues to represent a
significant opportunity for production growth, particularly as natural gas
pricing is subject to redetermined in October 2027.

 

This independent evaluation underscores the substantial value of our
Trinidadian portfolio. The NPV10 of future net revenues for our 2P reserves
was estimated at approximately $653 million before tax and approximately $315
million after tax, which represented a 2 percent increase over 2024 despite
our 2025 production.

 

Furthermore, the addition of medium-gravity oil reserves from Cascadura-5
reinforces the potential of our emerging Herrera play. Through low-cost
recompletion opportunities, we are well-positioned to efficiently enhance our
production base by tapping lower-zone oil within our Block B assets.

 

Looking ahead, we remain focused on execution. We look forward to tying in
Carapal Ridge-3 for production in late March 2026, commencing our legacy oil
block drilling program in March, and commissioning the Cascadura compressor in
the second quarter of 2026."

 

2025 Operational Highlights

·    Transformational acquisition: Closed and integrated the acquisition
of a 65 percent working interest in the Central block, successfully adding
base LNG production and significant reserves to the Company's portfolio.

·    Facility optimization: Implemented operational enhancements at the
Central block natural gas processing plant, driving an approximate 20 percent
production increase over acquired levels.

·      Cascadura-4 drilling: While the well successfully encountered
hydrocarbon-bearing zones, the drill string became irretrievably stuck during
operations. Following an assessment of potential completion options, the
Company has determined that the ability to safely and reliably produce from
the current wellbore is unlikely.

·    Cascadura-5 drilling: Drilled and brought onstream the first Block B
well to produce both natural gas and medium-gravity crude oil, diversifying
the Cascadura production stream. The well contributed a field estimated gross
average sales of approximately 1.9 MMcf/d of natural gas and 46 bbls/d of
medium crude oil (approximately 362 boe/d) in December 2025.

·    Carapal Ridge-3 drilling: Drilled the first new well in the Central
block in over 17 years, encountering approximately 1,000 feet of net Herrera
sand pay.

-  Post-year-end progress: Successfully completed the well in the Herrera
formation. Following perforation, cleanup operations recovered natural gas and
associated liquids, confirming hydrocarbon presence. The well is currently
shut-in and is scheduled to be tied into the Central block facility for
production in late March 2026.

·     Base oil stability: Maintained consistent performance across the
CO-1, WD-4, and WD-8 blocks through a disciplined program of optimizations and
workovers, ensuring a stable production foundation throughout 2025.

-   Post-year-end progress: In December 2025, the Company completed the sale
of the non-core Fyzabad property in exchange for three turnkey drilling wells
on the WD-8 and WD-4 blocks. A drilling rig is currently mobilizing to WD-8 to
commence the first of a four well campaign, with spudding anticipated in early
March 2026.

·    Production: Achieved 2025 annual average net production of 4,686
boe/d, with fourth quarter performance climbing to 4,877 boe/d following the
startup of Cascadura-5 and Central block optimizations.

Year-end 2025 Reserves Overview

 

Touchstone's year-end reserves reflect the strategic addition of natural gas
and NGL reserves from the Central block acquisition, alongside a technical
revision to Block B at Cascadura. The Cascadura subsurface model has evolved
with each development well, providing a foundation for full-field development.
The Cascadura compressor is targeted for commissioning in the second quarter
of 2026, which is expected to provide a stable production profile to enhance
future forecasting and well-deliverability modeling. With an established
pipeline network and infrastructure in place, the Company is positioned for
efficient and cost-effective future development.

·   Reserves changes: Relative to year-end 2024 and after accounting for
2025 production, gross PDP reserves increased by 45 percent to 9,933 Mboe.
Gross 1P reserves declined by 5 percent to 27,559 Mboe, and gross 2P reserves
decreased by 1 percent to 49,558 Mboe.

·    Asset base evolution: The increase in year-end 2025 PDP reserves
reflect the acquisition of the Central block and the addition of Cascadura-5
to the producing base, partially offset by the disposition of the Fyzabad
block.

·     Technical revisions: Changes to 1P and 2P reserves reflect
technical revisions to natural gas and NGL reserves at Cascadura Block B and
the Fyzabad disposition, offset by the Central block acquisition and positive
technical revisions to crude oil reserves at CO-1, WD-4, and WD-8.

·    Before tax value: The before-tax NPV10 of future net revenues
increased 35 percent year-over-year to $107 million for PDP. Before-tax NPV10
for 1P reserves was $336 million (down 5 percent from 2024) and $653 million
for 2P reserves (down 3 percent from 2024).

·     After tax Value: Realized after-tax PDP NPV10 reached $89 million,
a 34 percent increase from the prior year. After-tax 1P and 2P NPV10 increased
by 2 percent compared to 2024 levels.

·     Extensive reserve life: The Company maintains a robust reserve
life index of 13.3 years (1P) and 23.2 years (2P), highlighting the long-term
sustainability of the asset portfolio.

2025 Year-end Reserves Report Summary

 

Touchstone's year-end light and medium crude oil, conventional natural gas and
NGL reserves in Trinidad were evaluated by 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 February 24, 2026, with an effective date of December 31, 2025. The
Reserves Report uses the average price and inflation forecasts of three
independent 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, 2025. 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, 2026. Please refer to "Advisories: Reserves Disclosure" for further
information. In certain tables set forth below, the columns may not add due to
rounding.

 

2025 Reserves Summary by Category

 

                                        PDP      1P       2P

 Total gross reserves((1)) (Mboe)       9,933    27,559   49,558
 Reserve additions((2)) (Mboe)          4,882    275      1,281
 NPV10 before income tax((3)) ($000's)  107,295  335,710  652,516
 NPV10 after income tax((3)) ($000's)   89,142   183,103  314,844

 

Notes:

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

(2)    Reserve additions exclude 2025 annual production and include the
effect of 2025 acquisitions and dispositions. See "Advisories: Oil and Gas
Metrics".

(3)    Based on the Consultants' average December 31, 2025 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)  Conventional Natural Gas (MMcf)  Natural Gas Liquids (Mbbl)((2))    Total Oil Equivalent (Mboe)

 Proved
 Developed producing          3,274                              35,240                           785                                9,933
 Developed non-producing      1,332                              7,493                            251                                2,832
 Undeveloped                  4,544                              59,718                           297                                14,795
 Total Proved                 9,151                              102,451                          1,333                              27,559

 Probable                     8,960                              76,036                           367                                21,999
 Total Proved plus Probable   18,111                             178,486                          1,700                              49,558

 Company Net((3)) Reserves    Light and Medium Crude Oil (Mbbl)  Conventional Natural Gas (MMcf)  Natural Gas Liquids (Mbbl)(()(2))  Total Oil Equivalent (Mboe)

 Proved
 Developed producing          1,944                              30,624                           687                                7,735
 Developed non-producing      900                                6,517                            220                                2,206
 Undeveloped                  3,392                              51,890                           260                                12,300
 Total Proved                 6,236                              89,031                           1,166                              22,241

 Probable                     6,805                              66,091                           321                                18,141
 Total Proved plus Probable   13,041                             155,122                          1,487                              40,382

 

Notes:

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

(2)    NGLs including field 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                                     156,204       126,758           107,295            93,202             82,459
 Developed non-producing                                 77,615        60,539            49,826             42,321             36,719
 Undeveloped                                             290,765       225,246           178,588            144,311            118,450
 Total Proved                                            524,584       412,543           335,710            279,834            237,627

 Probable                                                584,583       419,085           316,806            247,878            198,922
 Total Proved plus Probable                              1,109,167     831,628           652,516            527,712            436,550
 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                                     116,217       101,364           89,142             79,350             71,433
 Developed non-producing                                 32,884        27,699            24,232             21,674             19,661
 Undeveloped                                             123,263       92,008            69,729             53,515             41,476
 Total Proved                                            272,364       221,071           183,103            154,539            132,570

 Probable                                                242,575       175,757           131,742            101,492            79,928
 Total Proved plus Probable                              514,939       396,829           314,844            256,031            212,498

 

Notes:

(1)    Based on the Consultants' average December 31, 2025 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,
2025. 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, probable, and proved plus probable reserves by product type as of
December 31, 2025, against such reserves as at December 31, 2024. The
reconciliation is based on forecast price 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, 2024((2))                 9,360                              276              113,377                          537                              29,070
 Extensions and improved recovery((3))  191                                -                -                                -                                191
 Technical revisions((4))               (8)                                -                (34,909)                         (180)                            (6,006)
 Acquisitions((5))                      -                                  -                31,647                           1,086                            6,361
 Dispositions((5))                      -                                  (258)            -                                -                                (258)
 Economic factors((6))                  (12)                               -                -                                -                                (12)
 Production                             (379)                              (18)             (7,664)                          (111)                            (1,785)
 December 31, 2025                      9,151                              -                102,451                          1,333                            27,559

 Total Probable
 December 31, 2024((2))                 8,889                              56               70,750                           257                              20,993
 Extensions and improved recovery((3))  210                                -                -                                -                                210
 Technical revisions((4))               (123)                              -                1,752                            (13)                             156
 Acquisitions((5))                      -                                  -                3,534                            123                              712
 Dispositions((5))                      -                                  (56)             -                                -                                (56)
 Economic factors((6))                  (15)                               -                -                                -                                (15)
 December 31, 2025                      8,960                              -                76,036                           367                              21,999

 Total Proved plus Probable
 December 31, 2024((2))                 18,249                             332              184,127                          794                              50,063
 Extensions and improved recovery((3))  400                                -                -                                -                                400
 Technical revisions((4))               (132)                              -                (33,157)                         (193)                            (5,851)
 Acquisitions((5))                      -                                  -                35,181                           1,210                            7,073
 Dispositions((5))                      -                                  (314)            -                                -                                (314)
 Economic factors((5))                  (27)                               -                -                                -                                (27)
 Production                             (379)                              (18)             (7,664)                          (111)                            (1,785)
 December 31, 2025                      18,111                             -                178,486                          1,700                            49,558

 

Notes:

(1)    NGLs including field condensate.

(2)    Prior year reserve estimates per GLJ's independent reserves
evaluation dated March 5, 2025, with an effective date of December 31, 2024.

(3)    Reserve amounts for Infill Drilling, Extensions and Improved
Recovery are combined and reported as "Extensions and improved recovery".

(4)    Technical revisions include all changes in reserves due to well
performance and previously booked wells which were drilled in the year.

(5)    Touchstone acquired its interest in the Central block effective May
16, 2025, and disposed of its interest in the Fyzabad block effective Dec. 1,
2025.

(6)    Economic factors are the change in reserves exclusively due to
changes in pricing.

As of December 31, 2025, gross proved plus probable reserves were 49,558 Mboe,
representing a slight decrease of 505 Mboe or 1 percent from the prior year.

·     Light and medium crude oil: proved plus probable reserves
decreased by 138 Mbbl from 2024. This was primarily driven by 2025 annual
production and negative technical revisions at Balata East. These decreases
were partially offset by positive technical revisions and extensions at WD-4,
WD-8, and CO-1, as well as geological refinements in the Cascadura Block B oil
zone.

·     Heavy crude oil: proved plus probable reserves reduced by 332 Mbbl
from the prior year following the disposition of the Fyzabad property and
related 2025 production.

·    Conventional natural gas: proved plus probable reserves decreased by
5,641 MMcf from 2024. Significant negative technical revisions at Cascadura
Block B and annual production were the primary drivers, though largely offset
by the strategic acquisition of the Central block.

·      Natural gas liquids: proved plus probable reserves increased by
906 Mbbl (approximately 114 percent) from the prior year, almost entirely
attributed to the Central Block acquisition, which outweighed
performance-related technical revisions at Cascadura.

Future Development Costs

 

The following table provides information regarding the future development
costs ("FDC") 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

 2026                                  10,558   14,868
 2027                                  26,093   33,436
 2028                                  34,195   56,904
 2029                                  32,461   69,673
 2030                                  11,372   27,205
 Thereafter                            -        -
 Total undiscounted                    114,680  202,086
 Total discounted at 10% per year      90,953   156,708

 

The following table sets forth the changes in undiscounted FDC included in the
Reserves Report against such costs in the December 31, 2024, reserves report
prepared by GLJ dated March 5, 2025.

 

 ($000's unless otherwise stated)                        1P        2P

 Increase in forecasted well costs                       5,618     9,243
 Decrease in forecasted well locations                   (13,611)  (8,616)
 Decrease in forecasted facility and pipeline costs      (1,586)   (1,586)
 Total decrease in FDC from 2024                         (9,579)   (959)
 Total decrease in FDC from 2024 (%)                     (8)       (0)

 

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, 2025. These
price assumptions were provided to the Company by GLJ and represented the
average price forecast of the Consultants as of the date of the Reserves
Report.

 

 Forecast Year  Brent Crude Oil((1))  Henry Hub Natural Gas((1))  NBP Natural Gas  JKM Natural Gas  Inflation Rate

                ($/bbl)               ($/MMBtu)                   ($/MMBtu)        ($/MMBtu)        (% per year)

 2026           63.92                 3.74                        10.00            9.20             -
 2027           69.13                 3.78                        9.74             9.70             2.0
 2028           74.36                 3.85                        9.97             10.40            2.0
 2029           76.10                 3.93                        10.27            11.08            2.0
 2030           77.62                 4.01                        10.47            11.30            2.0
 2031           79.17                 4.09                        10.68            11.53            2.0
 2032           80.76                 4.17                        10.89            11.76            2.0
 2033           82.37                 4.26                        11.11            11.99            2.0
 2034           84.01                 4.34                        11.34            12.23            2.0
 2035           85.70                 4.43                        11.56            12.49            2.0
 Thereafter     +2.0% / year          +2.0% / year                +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, heat content and transportation to point
of sale.

 

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.

 

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, but is not limited to, forward-looking
statements relating to: the Company's business plans, strategies, priorities
and development plans; the quality and quantity of prospective hydrocarbon
accumulations based on wireline logs; field estimated production; the
Company's expectations regarding timing and results of future drilling,
completion, and tie-in operations at including anticipated production rates
and commercial outcomes therefrom; estimated crude oil, NGL and natural gas
reserves and the net present values of future net revenue therefrom; the
forecasted future production, commodity prices, inflation rates and all future
costs used by GLJ in their evaluation; 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.

 

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 2024
Annual Information Form dated March 19, 2025 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, 2025 will be contained in the Company's Annual
Information Form for the year ended December 31, 2025 which will be filed on
SEDAR+ (www.sedarplus.ca (http://www.sedarplus.ca/) ) on or before March 31,
2026.

 

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, 2025,
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 estimated reserve volumes and future net revenues
based on historical well performance, production forecasts and economic limits
for individual wells. In certain cases, the forecast economic life of wells
extends beyond the current terms of applicable licences or marketing
agreements. While there is precedent for renewals and extensions, there is no
assurance that such agreements will be renewed or extended on terms consistent
with current assumptions. Any failure to extend these agreements would reduce
the economic life of the associated reserves.

 

Estimates of reserves and future net revenue therefrom in the Reserves Report
have been made assuming the development of each property, in respect of which
the estimate is made, will occur, and without the regard to the likely
availability of funding required for the development. There can be no
guarantee that funds will be available or that the Company's Board will
allocate funding to develop all of the reserves attributable in the Reserves
Report. Failure to develop those reserves could have a negative impact on our
future cash from operating activities and financial position. Further,
Touchstone may choose to delay development depending upon a number of
circumstances including the existence of higher priority expenditures,
available cash on hand, and borrowing capacity.

 

"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 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 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 January
2026 annualized 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, 2025 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, 2025, 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, 2025 on SEDAR+ (www.sedarplus.ca (http://www.sedarplus.ca/) ) on
March 19, 2026.

 

Product Type Disclosures

 

This announcement includes references to fourth quarter 2025 and annual 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  Condensate (bbls/d)  Other NGLs (bbls/d)  Conventional Natural Gas (Mcf/d)  Total Oil Equivalent (boe/d)

                                                              (bbls/d)

 Fourth quarter of 2025  968                                  28               127                  286                  20,805                            4,877
 Annual 2025             1,039                                48               100                  176                  19,939                            4,686

 

In this announcement, references to "crude oil" include the combined product
types light crude oil and medium crude oil and heavy crude oil; references to
"NGLs" refer to condensate and propane; and references to "natural gas" refer
to conventional natural gas, all as defined in NI 51-101 instrument.
References to "crude oil and liquids" 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 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 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

NPV10               Net present value of future net revenue discounted
by 10 percent

LNG                   Liquefied natural gas

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