Touchstone Exploration Inc (LON:TXP) has told investors it plans to press ahead with the drilling of the Chinook prospect, in Trinidad, unless it becomes “absolutely necessary” to suspend operations due to the coronavirus (Covid-19).
Operationally, the company’s focus is on delivering the Coho and Cascadura discovery wells – which will significantly boost production volumes – and drill Chinook which follows on as the third well on the Ortoire block.
Posting full-year results on Thursday, the AIM-quoted oil firm also noted that it has immediately responded to the significant global economic uncertainty created by the Covid-19 pandemic and the unprecedented decline in crude oil prices.
“Aside from voluntarily restricting certain field operations, the company has had no operational impacts from COVID-19 to date, and we will monitor the situation and adapt our operations accordingly,” Touchstone said.
It added: “Our low base production decline rate, strong operating netbacks, top-tier capital efficiencies, lack of development drilling commitments and solely operated exploration capital program provide flexibility in this volatile market.”
Touchstone noted that it has US$13.5mln of cash at the end of February, bolstered by a recent equity raise, and, prior to that it ended the financial year with US$6.18mln.
During the year, it had oil sales of 1,825 barrels per day (boepd) representing a 6% improvement on the preceding twelve months – for context, in testing Coho and Cascadura have so far produced in excess of 7,000 and 10,000 boepd respectively.
Petroleum sales generated some US$38.6mln in the year, up 2% from US$37.7mln in 2018, despite the ‘netback’ coming in at US$26.68 per barrel, amid an annual 10% decrease in Brent reference pricing.
It reported a US$5.6mln net loss for the year.
Amidst its outlook statement, Touchstone said: “We continue to monitor the situation and economic environment, and we will adapt our business operations to ensure that we preserve and grow long-term shareholder value.”