REG - Touchstone Explrtn. - Cascadura well test results & operational update

Touchstone ExplorationAnnouncement

30/09/2024 07:00

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RNS Number : 1966G  Touchstone Exploration Inc.  30 September 2024

 

TOUCHSTONE EXPLORATION ANNOUNCES CASCADURA WELL TEST RESULTS AND PROVIDES AN
OPERATIONAL UPDATE

 

CALGARY, ALBERTA (September 30, 2024) - Touchstone Exploration Inc.
("Touchstone", "we", "our" or the "Company") (TSX, LSE: TXP) provides an
operational update.

 

Highlights

·     Successful completion of our Cascadura C wells: the Cascadura-2ST1
and Cascadura-3ST1 wells were completed with initial shut-in wellhead
pressures building to 3,600 psi and 2,665 psi, respectively.

·     Gas presence indicated at Cascadura-2ST1: the fluid column gradient
observed in the tubing at Cascadura-2ST1 suggests a significant presence of
natural gas, comparable to findings in the Cascadura-1ST1 well, reinforcing
our geological models.

·     Crude Oil and Natural Gas at Cascadura-3ST1: Cascadura-3ST1
successfully flowed crude oil from the lower sheet 5 Herrera interval on
September 17, 2024, followed by a test from the sheet 4 Herrera interval on
September 26, 2024 confirming natural gas.

·     Flowline installation: we have successfully installed the flowline
connecting the Cascadura C surface location to our natural gas facility, and
hydrotesting of the line will commence shortly.

·     Cascadura infrastructure enhancements: the test separator at the
Cascadura natural gas facility has been installed, and the riser at the
Cascadura B site has been completed, optimizing our operational capabilities.

·     Significant production increase at Balata East: since acquiring the
field in June 2024, production has surged by nearly 300 percent from a
targeted workover and optimization program.

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

 

"The results from the Cascadura-2ST1 well test is highly promising, closely
mirroring the responses we observed at the Cascadura-1ST1 well. We are eager
to connect it to the completed pipeline and begin testing at our facility as
soon as possible.

 

The discovery of crude oil during the initial test of the Cascadura-3ST1 well
further underscores the potential within the Ortoire acreage. The encouraging
results from this initial well test opens up new liquids possibilities on the
block. The results of the second well test are particularly significant,
confirming the presence of economic hydrocarbons on the east side of Fault C,
areas that have not been previously booked as reserves. Initial findings
suggest that the Cascadura structure hosts multiple hydrocarbon accumulations
beyond previously defined boundaries.

 

Although the oil test at Cascadura has delayed the final tie-in of the wells
on pad C, the insights gathered will be invaluable for our future drilling
efforts in the area.

 

We are proactively establishing essential infrastructure at Cascadura to
accelerate the development of upcoming wells, significantly reducing the time
from drilling to production. A prime example of this efficiency is our ability
to move the rig to the Cascadura B pad using our own road network, along with
the risers already in place to facilitate successful development on the pad.
We look forward to keeping our stakeholders informed as our operations
progress."

 

Cascadura-2ST1

 

On September 8, 2024, the Cascadura-2ST1 well was successfully perforated
across 115 feet of sheet 4 in the Herrera Formation, at depths between 6,142
to 6,294 feet. Following the perforation, wellhead pressure rapidly increased
to 1,900 psi, and within the next 18 hours, it continued to build, reaching
3,600 psi. This increase in wellhead and bottom hole pressure indicates a
substantial gaseous column within the tubing. Currently, the Cascadura-2ST1
well is shut in, awaiting connection to the newly constructed flowline.

 

Cascadura-3ST1

 

On September 15, 2024, the Cascadura-3ST1 well successfully perforated 40 feet
of sheet 5 in the Herrera Formation, at depths between 7,248 and 7,294 feet.
Sheet 5 was identified as a secondary exploration target. Following
perforation, the wellhead pressure immediately climbed to 2,100 psi, and
flowback testing commenced on September 17, 2024. The interval was flow tested
using 3.5-inch tubing and a 10/64-inch choke. In the first hour we recovered
54 barrels of completion fluid, and the well continued to flow for 40 hours at
restricted rates of approximately 300 to 400 bbls/d of 25-degree API crude
oil, without any formation water, yielding a total of 538 barrels of oil
during this period.

 

On the third day of testing, we observed a sudden shift in flowing pressures,
leading to the well producing both oil and significant quantities of formation
water, mud, and sand. This initial test marked a critical milestone as it was
the first conducted in the lowest Herrera sand sheet encountered in the field
to date, extending across the interpreted outermost structure fault, known as
Fault C. While the initial flow test results were promising, indicating stable
rates of clean oil, it appears that a lower water-bearing sand was breached
into the wellbore, necessitating the plugging of this lower test. This testing
phase represented our inaugural drilling results on the east side of Fault C,
revealing the lowest structural location as the formation trends upward to the
northeast.

 

On September 26, 2024, the service rig successfully completed the uphole
section of the sheet 4 Herrera interval, the primary target of the wellbore.
This interval was perforated across 36 feet at depths from 6,794 to 6,889
feet. Following perforation, the wellhead pressure rapidly reached 2,100 psi
and subsequently built to 2,620 psi. The well was then opened on the same day
using a 12/64-inch choke, resulting in a flow of dry natural gas for one hour
at a flowing pressure of 2,400 psi, before being shut in for safety reasons.
Due to the absence of natural gas testing equipment on site, we were unable to
estimate the volume of natural gas produced. The current shut-in wellhead
pressure is 2,665 psi. Future testing will be conducted as we integrate the
well into the gas gathering system at the Cascadura natural gas facility. The
results of the second well test confirmed the presence of hydrocarbons on the
east side of Fault C, highlighting additional opportunities for future
development in the area.

 

Cascadura Infrastructure

 

We are making substantial progress in connecting the Cascadura C surface
location to our Cascadura natural gas facility. The flowline has been
successfully installed along the designated right-of-way, and hydrotesting of
the line is set to commence shortly. An additional natural gas separator has
been installed at the facility, and the wellhead tie-in piping and valves have
been fully welded. With well testing now complete, the final surface piping is
ready to be transported to the site for installation. Additionally, the bridge
over the Poole River is approximately 80 percent complete, with expected
completion by the end of October. While the bridge is not necessary for the
initial gas production, its completion will facilitate direct vehicle access
across the Cascadura field, enhancing trucking and logistical operations in
the area. This development will greatly improve our operational efficiency and
support future growth.

 

To ensure the safety and integrity of our operations as we move forward,
following the oil test at the Cascadura-3ST1 well, the final tie-in for the
Cascadura-2ST1 and Cascadura-3ST1 wells will take place once the service rig
has vacated the Cascadura C pad. We anticipate that first natural gas
production from the Cascadura C pad will commence prior to the end of October
2024.

 

Balata East

 

Our operations team has been actively engaged at the Balata East field,
located north of our Ortoire block, since we assumed control on June 1, 2024.
After obtaining the necessary regulatory approvals for service rig operations,
we initiated an optimization, workover, and recompletion program at the end of
August. Following our initial workover efforts, we have successfully increased
field production from 33 bbls/d in July to an estimated current rate of 125
bbls/d. We remain committed to identifying additional wells for optimization
to further enhance production and maximize the field's potential.

 

Production Volumes

In August 2024, we attained average net sales volumes of 5,125 boe/d comprised
of:

·      average net natural gas sales volumes of 23.3 MMcf/d (3,887
boe/d); and

·      average net crude oil and natural gas liquid sales volumes of
1,238 bbls/d.

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, Executive Vice President Engineering and Business
 Development

 Shore Capital (Nominated Advisor and Joint Broker)
 Daniel Bush / Toby Gibbs / Tom Knibbs                                   Tel: +44 (0) 207 408 4090

 Canaccord Genuity (Joint Broker)
 Adam James / Charlie Hammond                                            Tel: +44 (0) 207 523 8000

 FTI Consulting (Financial PR)
 Nick Hennis / Ben Brewerton                                             Tel: +44 (0) 203 727 1000

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

 

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.

 

Working Interest

 

Touchstone has an 80 percent operating working interest in the Cascadura
field, which is 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. All Cascadura-3ST1 production test
figures referenced herein are gross volumes. Touchstone has a 100 percent
working interest in the Balata East block via an Enhanced Production Service
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",
"intend", "estimate", "potential", "growth", "long-term", "anticipate",
"forecast" 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; well test results; field
estimated production rates, which may not necessarily translate to sales
volumes; estimated completion of Cascadura infrastructure operations; the
future opportunities within the Ortoire block; and ultimate production from
the Cascadura-2ST1 and Cascadura-3ST1 wells, including the timing thereof. The
Company's actual decisions, activities, results, performance, or achievement
could differ materially from those expressed in, or implied by, such
forward-looking statements and accordingly, no assurances can be given that
any of the events anticipated by the forward-looking statements will transpire
or occur or, if any of them do, what benefits that Touchstone will derive from
them.

 

Although the Company believes that the expectations and assumptions on which
the forward-looking statements are based are reasonable, undue reliance should
not be placed on the forward-looking statements because the Company can give
no assurance that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of factors and
risks. Certain of these risks are set out in more detail in the Company's 2023
Annual Information Form dated March 20, 2024 which is available under the
Company's profile on SEDAR+ (www.sedarplus.ca (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.

 

Oil and Gas Matters

 

References in this announcement to production test rates and well pressure
date are useful in confirming the presence of hydrocarbons; however, such
rates are not determinative of the rates at which the well will commence
production and decline thereafter and are not indicative of long-term
performance or of ultimate recovery. Additionally, such rates may also include
recovered "load oil" fluids used in well completion stimulation. While
encouraging, readers are cautioned not to place reliance on such rates in
calculating the aggregate production for the Company. Accordingly, the Company
cautions that the production test results contained herein should be
considered preliminary.

 

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 are referenced in this announcement:

 

API                   American Petroleum Institute gravity

bbls/d               barrels per day

psi                    pounds per square inch

 

 

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