CASCADURA WELL TEST
RESULTS
CALGARY, ALBERTA (November 11, 2024)
- Touchstone Exploration Inc. ("Touchstone", "we", "our" or the
"Company") (TSX, LSE: TXP) announces the completion of
Cascadura-2ST1 and Cascadura-3ST1 well testing.
Highlights
· Cascadura-2ST1
Well: during an extended 48-hour
test, Cascadura-2ST1 produced an average rate of approximately
4,950 boe/d, consisting of 26.4 MMcf/d of natural gas and 547
bbls/d of NGLs.
· Fluid Analysis for
Cascadura-2ST1: initial field
analysis shows the presence of liquids-rich natural gas with no
produced water, similar to the characteristics of the
Cascadura-1ST1 well.
· Cascadura-3ST1
Well: over a 68-hour testing period,
Cascadura-3ST1 achieved an average production rate of approximately
1,100 boe/d, including 786 bbls/d of crude oil and 1.9 MMcf/d of
natural gas.
· Fluid Analysis for
Cascadura-3ST1: field assessments
indicate medium API gravity crude oil with a 2 percent water cut,
along with liquids-rich natural gas.
· Production
Status: the Cascadura-2ST1 well is
currently on continuous production to the Cascadura natural gas
processing facility, and the Cascadura-3ST1 well is scheduled to
commence permanent production within the next two days.
Paul R. Baay, President and Chief Executive Officer,
commented:
"These encouraging well test results not only validate our
geological models but also underscore the potential of the
Cascadura field. With critical infrastructure in place between the
wells, we are well-positioned to drill additional wells to further
develop the field.
The Cascadura-2ST1 well test results are similar to those of
Cascadura-1ST1, and the well is located at the boundary of our
reserves booking. The Cascadura-3ST1 well test results are
exceptionally promising, as they unlock a new oil and natural gas
play on the eastern side of Fault C, extending into the recently
acquired Rio Claro block. On a per barrel equivalent basis, oil
currently generates nearly five times the revenue of natural gas,
and with a 12.5 percent royalty on the block and anticipated
operating expenses below our corporate average, the play offers
strong cash flow generating capabilities.
Together, these wells represent a material increase to our
base production, reinforce our development strategy and open the
door to a new oil play."
Cascadura-2ST1 Testing
Cascadura-2ST1 production testing
commenced on November 2, 2024, with flow tests spanning a total of
82 hours, comprised of an initial clean-up flow period, followed by
an initial shut-in period and a four-step rate test, including a
48-hour extended flow test. All production accumulated during
well testing was processed for sales at the
Cascadura natural gas processing facility.
During the 48-hour extended portion
of the flow test, the well produced at an average rate of
approximately 4,950 boe/d (89 percent natural gas), including 26.4
MMcf/d of natural gas and an estimated 547 bbls/d of NGLs. The
bottom hole flowing pressure of the well during this stage of
testing averaged 3,497 psi through a 64 percent choke, representing
a 15 percent reservoir pressure drawdown.
During testing, Cascadura-2ST1 yielded 44-degree API
gravity NGLs at an average ratio of approximately 21 barrels of
NGLs per MMcf of natural gas produced. Field analysis of the
produced gas indicated liquids rich natural gas. Additional testing
of fluid samples will be conducted to accurately assess the natural
gas and associated liquids composition as well as the phase
behaviour of the fluids within the reservoir.
The well was shut-in for a pressure
build-up survey between November 6, 2024 and November 9, 2024 with
further analysis to be conducted in identifying reservoir
continuity.
On November 9, 2024 the
Cascadura-2ST1 well was placed on continuous
production at a choke restricted initial natural gas rate of
approximately 20 MMcf/d and associated NGLs. This initial choke setting was selected based on well test
analysis and is designed to maximize the ultimate recovery of both
natural gas and NGLs from this section of the reservoir, ensuring
optimal long-term performance.
Cascadura-3ST1 Testing
Cascadura-3ST1 flow testing
commenced on November 6, 2024, with all production accumulated
during testing processed for sales at the
Cascadura natural gas processing facility.
During the 68-hour flow test, the
well produced at an average rate of approximately 1,100 boe/d (71
percent oil), including an estimated 786 bbls/d of oil and 1.9
MMcf/d of natural gas. The wellhead flowing pressure during the
flow test averaged 1,122 psi through choke settings of 25 percent
to 35 percent, representing a 65 percent wellhead pressure
drawdown.
During testing, Cascadura-3ST1 yielded 29-degree API
gravity oil with a 2 percent water cut, as well as liquids rich
natural gas. Additional testing of fluid samples will be conducted
to accurately assess the liquids and natural gas
compositions.
The well is currently shut-in for a
pressure build-up survey with further analysis to be conducted in
identifying reservoir parameters and bottom hole reservoir
performance. Touchstone intends to place the Cascadura-3ST1 on continuous
production over the next two days at a choke restricted initial rate of
approximately 600 to 700 bbls/d of oil in order to optimize the
well's long-term production potential.
Cascadura-3ST1 openhole wireline
logs also indicate an additional unperforated sand with over 24
feet of net hydrocarbon pay. This sand is located at depths between
5,816 to 5,840 feet in the well, uphole of the current production
zone. Given the strong flow test results from the well, this
interval offers a potential future development opportunity for the
Company to pursue.
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
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
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 holds the remaining 20
percent working interest. All production figures disclosed herein
are gross volumes.
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; expectations of future production rates from the
Cascadura-2ST1 and Cascadura-3ST1 wells and the timing thereof; the
quality and quantity of prospective hydrocarbon accumulations based
on openhole wireline logs, including the potential uphole zone in
Cascadura-3ST1; the Company's expectation of drilling additional
wells in the Casacdura field, including the locations and timing
thereof; anticipated liquids operating expenses from
Cascadura-3ST1; and the Company's expectation of a new oil play,
including its ability to generate future cash flows. 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)
and on the Company's website (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 Natural Gas
Measures
Where applicable, natural gas has
been converted to barrels of oil equivalent (boe) based on six
thousand cubic feet (Mcf) to one barrel (bbl) of oil. The barrel of
oil equivalent rate is based on an energy equivalent conversion
method primarily applicable at the burner tip and given that the
value ratio based on the current price of crude oil as compared to
natural gas is significantly different than the energy equivalency
of the 6:1 conversion ratio, utilizing the 6:1 conversion ratio may
be misleading as an indication of value. This conversion factor is
an industry accepted norm and is not based on either energy content
or prices.
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:
bbls(s)
barrel(s)
bbls/d
barrels per
day
boe
barrels of oil equivalent
boe/d
barrels of oil equivalent per day
MMcf
million cubic feet
MMcf/d
million cubic feet per day
NGL(s)
natural gas liquid(s)
psi
ponds per square inch
API
American Petroleum Institute