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Touchstone Exploration to emerge as clear winner when oil price disruption eases, says broker

Base production and netbacks from existing production are resilient, said Shore.

Touchstone Exploration Inc -
Options are being assessed for a second exploration well at Cascadura

Trinidad-focused operator Touchstone Exploration PLC (LON:TXP) should emerge as a winner from the recent oil price disruption, according to house broker Shore Capital.

Analyst Craig Howie’s risk-adjusted target is 48p and he expects newsflow to continue to be strong over the next few months.

Reservoir data from Cascadura well is expected at the end of the month with a gas sales agreement at Ortoire also under discussion.

Options are being assessed for a second exploration well at Cascadura and ahead of the Royston well ,which was previously planned to follow drilling of Chinook-1 in July.    

Base production and netbacks from existing production are resilient, said Shore.

A very strong balance sheet and emerging gas focus also positions Touchstone to emerge strongly from the current oil price weakness. concludes the broker.

In its results statement yesterday, the company reported crude oil sales of 1,589 barrels per day (bopd) in the first quarter, compared to 1,690 bopd in the preceding three month period.

A prioritisation of capital towards Ortoire meant lower investment elsewhere and, as a result, the mature oil operations saw a natural decline.

Some US$1.82mln was invested in exploration activities during the quarter, and the group said it is presently making preparations for the Chinook well, slated for July.

Quick facts: Touchstone Exploration Inc

Price: 111.5 GBX

AIM:TXP
Market: AIM
Market Cap: £232.7 m
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