REG - Touchstone Explrtn. - EXPANDED BANK DEBT AND DRILLING UPDATE

Touchstone ExplorationAnnouncement

04/03/2024 07:00

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RNS Number : 3679F  Touchstone Exploration Inc.  04 March 2024

TOUCHSTONE ANNOUNCES EXPANDED BANK DEBT AND A DRILLING UPDATE

 

CALGARY, ALBERTA (March 4, 2024) - Touchstone Exploration Inc. ("Touchstone",
"we", "our" or the "Company") (TSX, LSE: TXP) is pleased to provide updates on
its bank debt and drilling operations.

 

Bank Debt

 

Touchstone's wholly owned Trinidadian subsidiary, Touchstone Exploration
(Trinidad) Ltd., has entered into a binding term sheet with our existing
Trinidad-based lender providing for an increase in borrowing capacity of $13
million (the "Amended Bank Loan"). The parties are currently documenting an
amended and restated bank loan agreement and related security registrations,
following which the additional credit capacity will become effective.

 

The principal changes included in the Amended Bank Loan are as follows:

·      a new $10 million five-year non-revolving term loan facility,
with no principal repayment in the first year and sixteen equal and
consecutive quarterly payments thereafter; and

·      an increase in our current revolving loan facility borrowing
capacity from $7 million to $10 million, which will mature two years from the
execution date and may be renewed at the option of the parties thereafter.

Following execution of the Amended Bank Loan, Touchstone's facilities will
consist of its unchanged existing seven-year term loan facility, the new
five-year $10 million term loan facility, and the increased $10 million
revolving loan facility.

 

The existing seven-year non-revolving term loan facility has a current
principal balance of $21 million, with fourteen equal and consecutive
quarterly principal payments of $1.5 million outstanding through to the June
15, 2027 maturity date. We have $7 million drawn on our revolving loan
facility, resulting in an aggregate $28 million in bank debt principal
currently outstanding.

 

We intend to use the additional Amended Bank Loan facility borrowing capacity
to finance our 2024 capital program as presented in our December 19, 2023 news
release entitled "Touchstone Announces 2024 Capital Budget, Preliminary 2024
Guidance and an Operational Update".

 

Drilling Operations

 

Touchstone has commenced drilling the Cascadura-3 development well and the
CO-374 development well. Cascadura-3 was spud on March 1, 2024 from our
Cascadura C surface location on the Ortoire block in which we have an 80
percent working interest. The well is targeting gas-charged sands in the
Herrera formation northeast of the recently drilled Cascadura-2 well and is
expected to be drilled to an anticipated total depth of 7,000 feet using Star
Valley Rig #205. CO-374 was spud on February 28, 2024 on our CO-1 block, in
which we have a 100 percent working interest. The well is targeting crude
oil-charged sands in the Cruse and Forest formations and is expected to be
drilled to a total depth of 6,600 feet using PCSL Rig #8.

 

The Cascadura-2 well has been successfully cased after we encountered wellbore
instability issues due to high gas pressures which resulted in the need to
sidetrack a portion of the well. Operations are proceeding on the road and
pipeline right-of-way which will tie-in the Cascadura development wells to our
Cascadura natural gas facility. This project includes the preparation of the
Cascadura B surface location, which has been approved for the drilling of up
to four additional development 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
(https://url.avanan.click/v2/___http:/www.touchstoneexploration.com/___.YXAxZTpzaG9yZWNhcDphOm86NjhmMTNlYmU3ZjdlZDY3NWJjYWUxOWVmYTQ1NDRiZWY6NjozZTEzOjE1YmU5NzYwODE4MjE4YzI5YzY4ZDVjMGMzYTI2YzMwZTZjZGI1N2QzMmYwY2MxOThkYmVjMWVkMTFlMmMzZGI6cDpG)
or contact:

 

Touchstone Exploration Inc.

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

Scott Budau, Chief Financial Officer

James Shipka, Chief Operating Officer

 

Shore Capital (Nominated Advisor and Joint Broker)

Daniel Bush / Toby Gibbs / Iain
Sexton
Tel: +44 (0) 207 408 4090

 

Canaccord Genuity (Joint Broker)

Adam James / Ana
Ercegovic
            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)

 

Advisory Regarding 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", "plan",
"anticipate", "believe", "intend", "maintain", "continue to", "pursue",
"design", "result in", "sustain" "estimate", "potential", "growth",
"near-term", "long-term", "forecast", "contingent" 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; the anticipated total depth and
targeted formations of current wells being drilled; the intended use of
proceeds and expected timing of closing the Amended Bank Loan; and the
Company's expectation that the proceeds from the Amended Bank Loan will fully
fund the Company's 2024 capital program.

 

Although the Company believes that the expectations and assumptions on which
the forward-looking statements are based are reasonable, undue reliance should
not be placed on the forward-looking statements because the Company can give
no assurance that they will prove to be correct. Since forward-looking
statements address future events and conditions, by their very nature they
involve inherent risks and uncertainties. Actual results could differ
materially from those currently anticipated due to a number of factors and
risks. Certain of these risks are set out in more detail in the Company's 2022
Annual Information Form dated March 23, 2023 which is available under the
Company's profile on SEDAR+ (www.sedarplus.ca
(https://url.avanan.click/v2/___http:/www.sedarplus.ca/___.YXAxZTpzaG9yZWNhcDphOm86NjhmMTNlYmU3ZjdlZDY3NWJjYWUxOWVmYTQ1NDRiZWY6Njo4MzU3OmMxMDY0ZGE0NzgzZjQ1N2I1YmM5Y2FlZGEwYWUzNTMzZjMzMDllMDc2M2E1NjY3YmRkMWYwMDI2N2JhM2I3MTc6cDpG)
) and on the Company's website (www.touchstoneexploration.com
(https://url.avanan.click/v2/___http:/www.touchstoneexploration.com/___.YXAxZTpzaG9yZWNhcDphOm86NjhmMTNlYmU3ZjdlZDY3NWJjYWUxOWVmYTQ1NDRiZWY6NjozZTEzOjE1YmU5NzYwODE4MjE4YzI5YzY4ZDVjMGMzYTI2YzMwZTZjZGI1N2QzMmYwY2MxOThkYmVjMWVkMTFlMmMzZGI6cDpG)
). 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.

 

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.

 

Competent Persons Statement

 

In accordance with the AIM Rules for Companies, the technical information
contained in this announcement has been reviewed and approved by James Shipka,
Chief Operating Officer of Touchstone Exploration Inc. Mr. Shipka is a
qualified person as defined in the London Stock Exchange's Guidance Note for
Mining and Oil and Gas Companies and is a Fellow of the Geological Society of
London (BGS) as well as a member of the Canadian Society of Petroleum
Geologists and the Geological Society of Trinidad and Tobago. Mr. Shipka has a
Bachelor of Science in Geology from the University of Calgary and has over 30
years of oil and gas exploration and development experience.

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