The Trinidad focused oil and gas firm this morning provided details of the Ortoire exploration block where there’s potential for a multi-year exploration campaign.
The statement includes the findings of a prospect evaluation process undertaken by GLJ Petroleum Consultants Ltd, which reviewed each of the prospects previously identified by Touchstone within the Ortoire block.
"This independent prospect evaluation provides confirmation that the prospects that have been identified by the Touchstone team are of significant size and provide an excellent opportunity for a step change in reserves, production and net asset value of the company,” said Paul Baay, Touchstone chief executive.
“Proving this geological model could be monumental for Touchstone and Trinidad as it will set up a multi-year exploration and development program."
GLJ estimates the block’s prospective resources in a range of 5.49mln to 66.50mln barrels oil equivalent, in the low to high case respectively. At present, the contingent resources (or ‘development pending’ resources) at Ortoire are estimated at 1.87mln to 5.29mln boe.
Touchstone owns an 80% stake in the block, so it’s share amounts to 4.39mln to 53.2mln barrels of prospective resources and 1.49mln to 5.29mln barrels of contingent resources.
The consultant also provided an estimate of the block’s net present value which, including a 10% discount, amounted to US$10.5mln to US$86.86mln.
Analysts at SP Angel, in a note, said: “We believe that this is a significant milestone, as quite correctly, the management team has been focusing on establishing a solid cash producing foundation.
“While we don’t doubt that the company will maintain significant resources on maintaining and growing its production portfolio, by increasing the focus to longer-term projects, the management is ensuring that the company has future beyond managing its decline curve.”
SP Angel noted that Touchstone is re-establishing balance to its portfolio, and, it is taking steps to secure its continued growth.
“With the last run of announcements, the pattern that is being established, outlining management’s approach, should be one that the company’s owners appreciate,” the broker added.