Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF, FRA:PNW1) reported an increase in production from its base assets in Trinidad as it continued to work towards a four-well development programme in the fourth quarter of the year.
The group carried out a US$6.66mln exploration programme during the three months ended 30 June, primarily focused on well production testing at Cascadura Deep-1 and Chinook-1, together with various preparations for first drilling at the much-anticipated Royston prospect, including seismic shooting and pipeline installation.
Royston-1, the final minimum exploration commitment well at the Ortoire block, was spudded post-period, on August 12.
“The positive cashflow derived from our base assets and our strong liquidity position have allowed us to advance our exploration operations while we work towards initial natural gas production at our Coho and Cascadura discoveries,” said president and chief executive Paul Baay.
He added: “On the Ortoire block, we are progressing on all fronts including road construction, bridge repairs, well testing, seismic shooting, facilities design, pipeline installation and drilling our highly anticipated Royston prospect.”
A reduced net loss of $284,000 was reported for the quarter compared to a net loss of $2.7mln a year ago, and the quarter ended with cash of US$11.2mln in the bank, including a working capital balance of US$4.7mln and US$7.5 drawn on a term credit facility.
The principal availability period of the US$20mln term loan facility has been amended to allow Touchstone to access the outstanding US$12.5mln prior to the end of the year.
As such, Baay said: “We remain confident that our available credit facility capacity combined with anticipated funds flow from operations will be sufficient to complete our budgeted four well development programme as well as drilling Royston-1, one of a number of milestones that we forecast to achieve in the second half of 2021 as we conclude the first phase of our Ortoire exploration programme.”
Crude oil sales in the quarter averaged 1,402 barrels per day, which was up 8% on the first quarter, while realised crude oil prices averaged $59.06 per barrel, with an operating netback of $26.30 per barrel.