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Touchstone posts net loss

Friday, January 31, 2014
Map shows the East Brighton block for which Touchstone has renewed its offshore exploration and production (E&P) licence

Touchstone Exploration Inc posted a net loss of US$766,000 for the year ended September 30, 2013, statements released January 28 show. The company, which is based in Canada, made US$1,771,000 in net earnings in the corresponding period the year before. Touchstone solely owns and operates the assets of the former Primera Energy Resources Ltd, one of several companies of the former CL Financial that was divested after the government bailout was announced in January 2009. Touchstone purchased the assets in July, 2010. The 2013 fiscal year was the company's third full year of operations in T&T, the statement said. During the year, the company focused on improving its balance sheet, consolidating and integrating assets, and positioning itself for an aggressive exploitation and development programme in 2014 and beyond. 


The company completed acquisition of Primera Energy Resources Limited, which further consolidated its direct and indirect holdings in T&T. The acquisition provided the company with 100 per cent working interest in the WD-4 block and a minority working interest in the Cory Moruga onshore exploration property. Since its December 1, 2012 integration, the WD-4 property has averaged 495 barrels of production per day. Last year, the company drilled ten successful wells. Seven produced during the fiscal year and three were placed on production in the first quarter of 2014. "This organic growth served to further validate the company's proof of concept, as six of the new wells were drilled on properties that had not been drilled previously," the company said. "Production from these wells has exceeded the company's expectations and as a result the company has prioritized a number of new locations in its upcoming drilling schedule. The company incurred US$9,353,000 of capital expenditures and paid US$18,087,000 in current income taxes during the fiscal year.” During 2013, Touchstone was successful in renewing two farmout agreements with Petrotrin for the South Palo Seco and New Dome blocks. The South Palo Seco property has existing production and significant undeveloped acreage currently being evaluated for possible drilling late this year. The New Dome prospect has existing production that will not likely see activity until 2015.



Awaiting onshore bid round results
The company is awaiting results from the onshore bid round offered by the Ministry of Energy. The company bid on the 44,700 acre Ortoire Block, which is close to existing production and adjacent to company leases in eastern Trinidad. "A successful bid would provide a material amount of development and exploration opportunities. Results from the onshore bid round are expected to be disclosed in February," the company said. Touchstone Exploration Inc's licence to explore for oil and gas off the coast of La Brea has been renewed. Publicly listed on Toronto's junior stock exchange under the ticker TSXV:TAB, Touchstone describes itself on its website as an "oil company specialising in oil exploration in Trinidad". In a release earlier this year the company announced: "Touchstone Exploration Inc is pleased to announce that it has received regulatory approval for the renewal of its East Brighton offshore exploration and production (E&P) licence in the Republic of Trinidad and Tobago. The renewed licence is for an initial six year term, with the option to extend a further 25 years upon commercial discovery.


“The licensed area is a contiguous block of approximately 20,300 acres directly adjacent to the Brighton Marine field which has produced approximately 60 million barrels of oil to date. The property is divided into two sub-blocks, of which the Company holds a 35 per cent non-operating working interest in Sub-Block A covering approximately 3,000 acres and a 24.5 per cent non-operating interest in Sub-Block B covering approximately 17,300 acres. The acreage resides in the shallow coastal water along the southwest coastline of Trinidad in the Gulf of Paria, where water depths average approximately 50 feet." The designated operator of the block is SOOGL Antilles (Trinidad) Limited (SOOGL), the local subsidiary of China's state-owned oil company, Sinopec International Petroleum Exploration and Production Corporation. SOOGL has the majority working interest. while T&T's state-owned oil company, Petrotrin, has 30 per cent. "A successful exploration programme was completed in 1999 with two wells drilled, cased, and tested. Both wells tested commercial quantities of oil that resulted in a declaration of commerciality in Sub-Block A, as well as confirming the prospectivity of the overall trend," Touchstone said.


James Shipka, Touchstone vice president for geosciences said: "The East Brighton property is a significant asset and presents a great opportunity for the company. The successful testing of PBM 1 and 2 in the developed Nariva sands present in the Brighton Marine field has established East Brighton as an on-trend extension with significant resource potential." Initial work commitments associated with the licence renewal include conducting technical studies and revaluation of existing three-dimensional (3D) seismic surveys within two years of the effective date of the renewal, and the drilling of one 5,000 foot exploration well by the end of year three. The company currently forecasts its share of these commitments to be approximately CA$3.0 million over the three year period. The commitments are expected to be funded through future cash flows. "Formal signing of the License is expected to take place in Port of Spain, Trinidad prior to the end of February, 2014," the company said.


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