Toronto-listed Touchstone Exploration Inc shares are selling at a 62 per cent discount, a Canadian securities company said in a November 4 research note.
"At current share prices, we believe Touchstone continues to provide investors a value opportunity and an attractive entry point to the stock as it trades at a 62 per cent discount to its proforma base unrisked reserve net preset value (NPV) of CA$1.65 per share (US$1.37 risked) which is 100 per cent weighted to oil discounted at ten per cent post-tax," Industrial Alliance Securities analyst Michael Charlton and associate Sean McPherson said. Up to press time yesterday, Touchstone was trading for CA$0.60 per share.
The securities company was responding to the news that Touchstone signed an onshore exploration and production licence with the T&T Ministry of Energy and Energy Affairs for the Ortoire block.
The exploration lease on the Ortoire block in southern Trinidad is for a term of six years with a 25-year extension possible pending a commercial discovery. Touchstone has an 80 per cent working interest and operatorship with the remaining 20 per cent interest to be held by The Petroleum Company of T&T (Petrotrin). The block was awarded to Touchstone as the result of T&T's 2013 onshore bid �round which also saw Range Resources Ltd take the St Mary's block, and Lease Operators Ltd the Rio Claro block.
The Ortoire block is located approximately ten kilometres east of Touchstone's in country office in Fyzabad. Total acreage of the Ortoire block is approximately 44,731 gross acres (35,785 net) and is Touchstone's largest land block in Trinidad. Energy Minister Kevin Ramnarine said the reserve potential of the three blocks leased in this bidding round was around 822 million barrels of oil.
Work commitments include a total minimum capital programme of approximately US$11 million over the initial six-year lease including technical reviews, 85 kilometres of 2D seismic and at least four wells.The Ortoire Block more than doubles the company's land in Trinidad up to 60,300 acres from 24,500 acres with approximately 5,300 being offshore and 55,000 onshore.