T&T Pro League club W Connection wants to add the Digicel Pro Bowl title to its coffers to ease the disappointment after failing to qualify for 2017 CONCACAF Champions League qualifiers via...
You are here
Touchstone eyes 130 new drilling locations in Trinidad
Toronto-listed Petrobank Energy and Resources Ltd and Touchstone Exploration Inc have entered into an arrangement agreement that provides for the two energy companies to create a well-capitalised, oil-focused company with high growth potential.
Petrobank and Touchstone, under the Business Corporations Act (of Alberta, Canada), will operate under the name Touchstone Exploration Inc which will continue trading on the Toronto Stock Exchange. Touchstone is the Canadian company that has active operations solely in T&T, following its acquisition of the assets of Primera Energy of the former CL Financial group.
Pursuant to the arrangement, all of the issued and outstanding common shares of Touchstone will be exchanged for common shares of Petrobank based on an exchange ratio of 0.471 of a Petrobank share for each Touchstone share held. By rules of the London Stock Exchange (LSE) this is called a reverse takeover. The arrangement represents a market to market business combination based on Petrobank and Touchstone’s 20-day volume-weighted average trading prices ended March 5.
“The company will have significant financial resources, proven operational expertise and a high quality asset base characterised by large oil in place, low declines and an extensive inventory of low risk drilling, workover and reactivation opportunities,” a joint company statement said.
The respective boards and management of Petrobank and Touchstone believe the arrangement will provide significant benefits to their shareholders, and new Touchstone is expected to substantially grow production and cash flow through an expanded and internally funded capital programme focused on low-risk drilling and reactivation opportunities in established fields; generate attractive after-tax operating cash flows while maintaining a focus on technology to improve oil recovery and economic returns; benefit from an experienced board of directors and technology-focused management team with a proven track record of building value; become one of the most active independent oil producers in Trinidad with assets focused in several large, high quality reservoirs with significant original oil in place and an extensive inventory of low risk development opportunities; have Canadian heavy oil assets focused in two concentrated areas in Alberta and Saskatchewan with significant resource potential; and provide shareholders with enhanced liquidity.
The statement said the new company will have “a strong balance sheet at closing of the arrangement with estimated cash and marketable securities of Ca$45 million, consisting of Ca$25 million of cash and 3.5 million Lightstream Resources Ltd shares with a value of Ca$20 million based on its March 5 closing price, resulting in positive working capital of CA$10 million and zero net debt.”
The new company will also have “production of over 2,000 barrels of oil per day (100 per cent oil); total proved plus probable (P2) reserves of 11 million barrels of oil (MMbbl) net, generating a reserve life index of over 15 years based on independent reserves evaluations; and total possible reserves (P1) of 2.9 MMbbl (net) and best estimate contingent resources of 68.7 MMbbl (net) based on independent reserves and resources evaluations.”
Petrobank and Touchstone believe the new company will be in a strong financial position and will focus on the accelerated development of its 18,000-acre on-shore oil resource base in Trinidad. “We have currently identified over 130 low risk development drilling locations as well as numerous workover and reactivation opportunities in our 11 producing properties in Trinidad,” the statement said.
John D Wright, chief executive officer (CEO) and chairman of Petrobank, said: “The combination with Touchstone provides an exciting world class development platform that can apply Petrobank’s heavy oil expertise and provide shareholders with exposure to an international portfolio of large resource opportunities.”
New Touchstone will be led by a combination of the existing management team and board of directors of Petrobank and Touchstone. Paul R Baay, current CEO and chairman of Touchstone will be appointed president, CEO and director of the new Touchstone. Baay said: “The heavy oil expertise along with the strong balance sheet of Petrobank will allow new Touchstone to take the project in Trinidad from the proof of concept stage to full development along with future exploration potential.”
Upon completion of the arrangement, the company’s board of directors will be comprise four members from Petrobank’s board and three members from Touchstone’s board. Wright will be nominated as chairman of new Touchstone.
User comments posted on this website are the sole views and opinions of the comment writer and are not representative of Guardian Media Limited or its staff.
Guardian Media Limited accepts no liability and will not be held accountable for user comments.
Guardian Media Limited reserves the right to remove, to edit or to censor any comments.
Any content which is considered unsuitable, unlawful or offensive, includes personal details, advertises or promotes products, services or websites or repeats previous comments will be removed.