Touchstone Announces First Quarter 2022 Financial & Operating Results

Source: www.gulfoilandgas.com 5/12/2022, Location: South America

Touchstone Exploration Inc. ("Touchstone") (TSX) reports its operating and financial results for the three months ended March 31, 2022. Selected information is outlined below and should be read in conjunction with our March 31, 2022 unaudited interim condensed consolidated financial statements and related Management's discussion and analysis, both of which will be available under our profile on SEDAR (www.sedar.com) and on our website (www.touchstoneexploration.com). Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.

First Quarter 2022 Financial and Operational Highlights
- Achieved quarterly average production volumes of 1,396 barrels per day ("bbls/d"), representing a 4 percent increase relative to the preceding quarter and an 8 percent increase from the 1,297 bbls/d produced in the first quarter of 2021.

- Realized petroleum sales of $10,496,000 from an average crude oil price of $83.55 per barrel compared to petroleum sales of $8,212,000 from average realized pricing of $66.81 per barrel in the fourth quarter of 2021.

- Generated an operating netback of $37.83 per barrel, a 26 percent increase from the fourth quarter of 2021 and a 72 percent increase from the $21.98 per barrel reported in the first quarter of 2021.

- Our funds flow from operations improved to $1,426,000 in the quarter compared to $1,291,000 recognized in the fourth quarter of 2021 and $538,000 reported in the first quarter of 2021.

- Recognized a net loss of $236,000 and comprehensive income of $164,000, compared to a net loss of $460,000 and comprehensive loss of $415,000 reported in the same period of 2021.

- Capital investments of $2,554,000 focused on continuing production testing operations on the Royston-1 well, expenditures related to the Coho-1 facility and pipeline and lease preparation costs for two Coora development well locations.

• Exited the quarter with cash of $10,148,000, a working capital surplus of $4,259,000 and $30,000,000 drawn on our term credit facility, resulting in a net debt position of $21,241,000.

• In March 2022, our field development plan for the Cascadura area was approved, which extends the exploration and production period for the defined 2,378-acre area through October 31, 2039.

Recent Highlights
- Daily crude oil sales averaged 1,532 bbls/d in April 2022 with a realized price of $91.79 per barrel.

- Coho pipeline has been welded, with trenching operations progressing toward anticipated initial production within four to six weeks.

- The National Gas Company of Trinidad and Tobago ("NGC") has agreed to purchase the Coho pipeline upon completion and commissioning.

- Received a review and assessment report in response to our Cascadura area Environmental Impact Assessment ("EIA") application with no material deficiencies raised.

- NGC has received regulatory approval to construct a 20-inch natural gas pipeline from our Cascadura surface facility to their onshore transmission pipeline network.

Paul Baay, President and Chief Executive Officer, commented:
"Our first quarter results reflected a combination of increased commodity pricing and higher production volumes from our legacy crude oil properties. Our near-term priority is to bring our Coho and Cascadura 2 exploration discoveries onto production, with a focus on converting our extensive Trinidad reserve base to sustainable long-term cash flows to fund our portfolio of future development and exploration opportunities. We are forecasting first gas from Coho imminently, which will represent the initial step change in our production profile. With the approval of our Cascadura field development plan and our EIA in the final stages of documentation and clarification, we are making progress toward bringing our Cascadura discovery onto production. We thank our shareholders for their continued support and look forward to providing further updates as we proceed to execute our 2022 strategy."

Operational Update
Coho
Our pipeline and facilities project at Coho is progressing, and the pipeline has been strung out and welded along the right-of-way. Trenching has commenced, and approximately 4,000 feet has been buried to date.

Cascadura
In March 2022, the Trinidad and Tobago Ministry of Energy and Energy Industries approved our field development plan for the Cascadura area, which extends the exploration and production period for the defined 2,378-acre area through October 31, 2039.

We are progressing with facilities procurement and construction of the Cascadura natural gas facility and liquids pipeline. We received a review and assessment report in response to our Cascadura area EIA from the Trinidad and Tobago Environmental Management Authority on May 5, 2022. We anticipate submitting the additional information request on May 13, 2022. Upon final approval of the EIA, we expect to immediately proceed with construction of the surface facility, access roads and future development drilling locations.

Royston
We are concluding the extended production test of our Royston-1 exploration well, with the well shut-in for a pressure build-up. Our proposed future Royston-1 drilling operations include re-entering the existing wellbore to abandon the lowest section of the well and sidetrack the well to evaluate the intermediate sheet and potentially the subthrust sheets in the Herrera Formation.


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