Touchstone Exploration Inc. announces highlights of our independent reserves evaluation prepared by GLJ Petroleum Consultants Ltd. ( " GLJ " ) with an effective date of December 31, 2019 (the " Reserves Report " ).
Highlights of our total proved ("1P"), total proved plus probable ("2P") and total proved plus probable plus possible reserves from the Reserves Report are provided below. All finding, development and acquisition ("FD&A") costs below include changes in future development capital ("FDC"). Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars . The financial information contained herein is based on the Company's unaudited expected results for the year ended December 31, 2019 and is subject to change.
Touchstone's 2019 capital program focused on exploration activities on our Ortoire property, where we drilled two gross (1.6 net) exploration wells. We conducted minimal capital development activity on our development properties, mainly performing wellbore recompletions to arrest production declines. The Reserves Report included those reserves associated with our development properties as well as new reserves associated with our Coho natural gas discovery in 2019. The Reserves Report does not include any reserves associated with the Cascadura discovery given well testing commenced subsequent to the effective date of the report.
2019 Year-end Reserves Report Highlights
- Increased 1P reserves by 6% to 11,840 Mboe and increased 2P reserves by 14% to 22,056 Mboe from the prior year.
- Replaced 2019 annual production by 193% on a 1P reserves basis and 519% on a 2P reserves basis.
- Realized after tax 1P 10% discounted net present value of future net revenues ("NPV10") of $83.7 million, representing an increase of $4.0 million or 5% from the prior year.
- Achieved an after tax 2P NPV10 of $153.9 million, an increase of 6% from $145.4 million in 2018.
- Realized 1P FD&A costs of $7.75 per boe, resulting in a recycle ratio 3.4 times using our unaudited annual 2019 operating netback of $26.62 per boe.
- Achieved 2P FD&A costs of $3.95 per boe, resulting in a 2P recycle ratio of 6.7 times.
- FDC associated with only a portion of our internally identified drilling location inventory and portfolio of low risk recompletion projects totaled $45.4 million for 1P reserves and $71.7 million for 2P reserves.
- Coho was assigned gross working interest 1P reserves of 1,148 Mboe and gross working interest 2P reserves of 3,349 Mboe with a 2P NPV10 of $27.5 million before taxes.
James Shipka, Chief Operating Officer, commented:
"The Company's independent 2019 reserves evaluation reflected the strong performance of our base production and included the first reserves associated with our discoveries on the Ortoire exploration block. With gross working interest 2P reserves of over 20 Bcf (approximately 3.4 million boe) assigned at Coho, the Company has exceeded the best estimates of the recoverable gas in the pool compared to the independent evaluation report prepared for the Company in the prior year. With the second stage of the production test at Cascadura-1ST1 expected to commence this weekend, we look forward to updating our shareholders on this material discovery and the impact it will have on corporate reserves."
