kahlua
2 months ago
I’ve recently doubled my position. The value opportunity was too compelling. Production capacity for both plants is 42.3 boe/d gross. So, applying a 20% discount means the current production capacity is about 33.8 boe/d net * $19 net backs (using Q3 net back #) * 360 days = $231M FCF. Assume a high annual capex of $75M (best return on capital) and a realized 50% tax rate, the company can earn $78M or .33c per share based on 237M f/d shares. A p/e of 12 would mean a sp in the $4 range, roughly 3.5X from today’s closing price.
The risks to the above scenario playing out are management’s tarnished credibility after several years of disappointing the investor community by failing to come close to delivering on production timelines and projected output. As a result of this, they set the bar very low for themselves this year and so far appear to be on track to aggressively drill the development wells, tie them in and ramp up production. To get the egg off their face, the best strategy is to stop with the “wall of cash” quotables and just drill the wells, tie them in, prove out the resource and put up the eye-popping numbers this resource can deliver. Whether scaling up to full production takes 18 months or 3 years remains to be seen but at some point a big re-rate will occur. All imo.
pro_s2009
6 months ago
Comments from the USA presentation
From a post by DB I was sent - comments from the US presentation done recently.
Worth rereading: Equityhawk:
Different from what we saw in London, very similar information, just presented differently.
Key takeaways from presentation:
Cipero sign-off coming in next 30 days, maybe next two to three weeks.
Swap will be done soon but no definitive timeline.
He said there is some debate on whether to spud Casc C before or after Christmas.
He said unlike when he was in the field, drill crews expect holidays off now.
The plan is 6 months from casc C spud to brining it online. Preparations are underway for flow line between A and C.
First Cretaceous drill probably end of 2024 maybe early ‘25 and they want to drill the three targets one after another.
Other information gleaned:
-Separator unit needed to upgrade the plant to 200 cost $600k. It cost $3m two years ago (Covid and steel prices).
They are going to wait on the liquids pipeline for now.
There may be ways to increase trucking efficiency in the future and they are pretty confident they can truck 2500bpd.
It seems that there is no connection between going to 90mmcfpd and the price negotiations. It sounds like those are more connected to the fact that the current gas price is only for Ortoire and the leverage may be the probable gas from Rio… which we don’t own yet.
Our relationship with the ministry is great. Stuart reaches out to them once a week or so to check if there’s anything they can do to help. They want all the gas we can give them.
They are going to give very conservative guidance from this point forward. Part of the problem with timelines in the past was they made projections based on experience in North America and didn’t anticipate how slow things move in TT. The strategy is to under promise and over deliver. (No Gantt chart, sorry posh).
They do have some takeover and acquisition targets, but nothing in stone and I couldn’t get any more info.
James confirmed that without the upgrades, he thinks he can push the plant to 100-110mmcfpd.
They aren’t building the pipeline before they take the plant to 200mmcfpd. Partly, C is on the up dip side so they don’t know if they will get as much liquid. When it makes sense to build a pipeline, they will build a pipeline.
So, one of the biggest takeaways I got was that he claimed in the presentation that it would be about 6 months from spur of casc C to bring gas to market. I thought he probably mis-spoke so I asked him to confirm that after the presentation. And he said “6 months”. I was very encouraged by that, especially since he made a big deal about making sure they are carful with their timelines going forward.
The prep work they are doing now is getting ready to clear a path for a road between A and C from which to build the pipeline.
From previous information, the only equipment at C will be some monitoring and safety equipment. All the major upgrades will be on A. A and C are only a mile away. So the pipeline will be easy along a road they are constructing.
pro_s2009
7 months ago
Good post by AE. AE regularly has discussions with TXP.
ActiveEurope New: Yesterday, 5:05 AM
Analyst
Cascadura
Year end 2022 2P reserves were 75.1 MMboe and an NPV10 of U$993.7m pretax or U$450.6m post tax. It’s our understanding about 70% of that was attributable to Cascadura (52.1 MMboe) based on the area up to a fault line close to pad C. The two upcoming wells have the potential to move reserve numbers up substantially. Roughly speaking the first well (drilling from Cas C pad back towards current production 2 wells), if successful, would move 3P reserves to 2P reserves of about 35m MMboe (out of the 3P number 120.6 MMboe reported in reserve number), that’s a very significant value uplift. The next well after has the potential to bring new 2P reserves (not in 3P at all) focused on the area outside the fault line but up to the licence boundary (it drills from C pad towards licence boundary), and again if successful it could add 30-35 MMboe to 2P reserves. Lastly, if they receive final government sign off on the Rio Clara block they could drill a well from Cas C pad towards and across the current licence boundary and again if successful this could add a further circa 35m Mboe to 2P, all are approximate type numbers. Hence all 3 upcoming wells have the potential to add very significant 2P reserves and valuations, back of the envelope if all 3 were successful this could add circa 90 MMboe (80% share so net 72 MMboe) more to the existing Cas 2P of 52 MMboe (their 80% net share already). The share price/valuation is currently ‘disappointed’ with Royston result, delays across the board and little upcoming exploration drilling newsflow but is completely missing how material the Cascadura drilling could be.
All 2 or potentially 3 Cascadura wells are also primed for quick production (6months tie in Cas-C to Cas-A and separators etc) into existing facilities spare capacity, the current 2 producing wells are combined at 60mmcfd gross and may potentially increase to 90mmcfd gross in the future assuming there are no geological issues. The next wells are budgeted at 20 mmcfd gross each but are actually drilling into what management interpret as a slightly more gassy (less liquids) up-dip and potentially better area of relevant reservoirs for gas. They are budgeting minimal liquids although likely there will be some. Current 60mmcf and associated liquids provides U$4m a month, a move to 90 subject to successful geology at existing 2 wells moves this to U$6m a month and if all 3 new wells are on budget that’s 60mmcf/d and another U$4m a month: in total that’s U$10m a month possible at some point in late 2024/early 2025. Annualised that’s U$120m cashflow from Cascadura possible after the next 3 wells if drilled successfully. Obviously there can be delays and poor drilling results but this should be a relatively low risk development work and there are reasons it could surprise to the upside too. Its also worth noting the next well will be deepened to a new sheet as an exploration addition, we’d value this at zero but it’s worth mentioning.
Tax and Investment
Petroleum Operators ‘…entitled to capital allowances as follows….tangible and intangible exploration and development expenditure is computed on a straight line basis over 5 years (20% per annum)’ This means that if Touchstone spends U$100 on drilling and other related costs in one year, each subsequent year U$20 can be offset against taxable income so that over 5 years all the capex is effectively offset with taxable income. This is designed to encourage energy companies to keep investing in their business. Another way of looking at this is that if Touchstone invests U$100 in drilling its actually worth U$155 (100*55% (PPT+UEI rate)) over the 5 years to them. This is important to think about in the above Cascadura NPV reserve valuations pretax and post tax. The reality is the real value over time is somewhere in between these two NPV’s as there are some tax offsets from the full tax level modelled in the after tax valuation. Management are often questioned by investors ‘when are you going to pay a dividend or even do a share buyback?’. It’s worth pointing out both of these activities are ‘relatively expensive’ things to do when set against the tax incentives to keep reinvesting in the business. If touchstone reinvests nearly all its cashflow in growing the production of the company over several years it all gets ‘paid back’ in a lower tax rate. It’s for this reason investors and management ought to be reinvesting in growth rather than focusing on cash payback to investors. The reality is Touchstone are now self financing and have a plethora of new investment opportunities over the coming years, investors should be asking management to embrace growth capex for most of its cashflow. It’s the payback period on capex that’s actually the most important variable, ie how fast would capex on Cascadura payback. For instance 3 wells 80% share capex is 3*U$5.6m plus 80% of 5m for separators and pipes etc totals circa U$20.8m, if this adds 20mmcf/d each well totalling 60mmcf/d and U$ 4m a month then it takes somewhere around 5-6months to payback which is excellent use of cashflow (even less if including tax credit value).
Exploration
Cascadura has clearly been a huge success and as discussed above most likely still has more to give. In the recent presentation management put slides on several other future prospects, many are near drill ready but also some fall within the hoped for new licenses and asset swap deals that could be approved anytime between tomorrow and 12 months time depending on the Trinidad authorities timelines. Recently BP/Shell offshore licence was government approved and Touchstone management are hoping onshore licenses are next in line but there can be little predicting when this might be as the authorities appear to want to tie up all the licenses together meaning only once the last agreement is set up can they all be announced together, not doing companies or licenses individually. Coho 2 should be drilled 1H 2024 with a cheaper second rig and following that Coho 3 which includes the Gibba gas prospect at P50 circa 40-45BCF, these wells should fill the Shell spare capacity of 20mmcf/d. To the West of Cascadura they have named Char, Pike, Sturgeon and Muskallunga which all could be reached from one central pad (not yet permitted) and have promising on trend seismic with Cascadura. Equally Steelhead already has a drilling license already. Kokanee is up-dip from Chinook and needs a permit but is from an old drill pad so an easier permit exercise.
Valuation
I have always felt that Cascadura easily covers the valuation of the whole company up to somewhere around 120-150p per share (233.46m shares*120p or 150p=£280m to £350m). This does though include an implicit view that the next 2 wells will both be successful in proving up a much larger reserve base, the third not counted until licence agreement and drilling. The NPV10 post tax current value of U$450.6m could be at least twice that if all 3 wells come on prognosis. Most share prices trade at a wide discount to 2P valuations currently but you can easily argue for 120-150p. Alternatively you might pay 2-4*cashflow (single asset in high tax jurisdiction): here you have U$48m PA as current Cascadura (60mmcfd plus liquids) run rate and possibly U$120m annual run rate if ramped up by 3Q 2024 to 150mmcf/d. This gives valuations of U$96m to U$192m at low end production to U$ 240m to U$480m at the high end in about 12months time. Maybe Coho is U$20m, legacy assets U$20m but also current net debt offsets a lot of this. Lastly if the 200mmcf facility is filled up its 160mmcf/d net to them so about U$130m. The answer is valuation ranges can be very widely drawn, typically resource based valuations tend to be higher than just using trading multiples currently as the whole sector trading multiples are quite depressed currently. Further upside can clearly come from the continuous drilling campaign and we would hope that exploration wells from 3Q2024 and beyond might be possible.
pro_s2009
8 months ago
Cascadura-A first gas is now in the system and the system is in the process of final commissioining and being ramped up to initial "production" volumes.
The wells will be gradually ramped up over time to their expected 60 per day (30 each).
I do not know what TXP will class as "initial production" it might be 20 or 30 per day (10 to 15 from each).......but when they reach this initial low target they will RNS about "initial production volumes online" it seems. No news before then.
Do not expect any news until they reach their initial low target. Then over time operational updates will state how much they have then reached. The well bores need to clean up slowely at first to get the best production rates and so the taps will slowely be opened up over months...not weeks.
EG initial news Cascadura online at say 20 per day for initial production.
Later a month/months - Cascaura is now at 40 per day
Later - Cascadura is now at 60 per day.
There is hope that clean up will allow each well to do 50 per day, which is the "best case situation" and 4 wells - 2 existing at Casca A and then 2 new at Casca-C can give 200 per day by Q3 2024.
So might be news this week or next, the key takeaway would be inspections are over, sign off is done and now its all systms go, albeit slow slow at first.
This should mean we can get the first of 2 new wells, Cascadura-C1, spudded in late September hopefully and not slip into October.
So keep those FATC !!
pro_s2009
10 months ago
https://www.malcysblog.com/2023/07/oil-price-touchstone-petrotal-angus-hunting-petro-matad-prospex-and-finally/
Touchstone Exploration
It is going to be a crucial week in Touchstone’s history and last night CEO Paul Baay was appearing in the Shares Investor Webinar to point out just how important will be. The strong production imminently starting from Cascadura will give the company ‘5 year visibility’ and more and make it a full cycle E&P company.
With it the company can start to convert reserves into production using the significant technology advances available, the support from the Energy Minister will see production get into top gear very soon and be producing over 9,000 boe/d and making it more of a natural gas company.
So, over the next few days TXP shareholders can expect the plugs to be removed from the two wells at Cascadura and the flow to the newly built gas facilities will begin. And this is only the beginning, CEO Paul Baay was at pains to point out that there are a number of further wells to be drilled, probably at least five with the rig off to drill the next one very soon.
There is much more elsewhere at Coho and Royston but this is the time for Cascadura to shine, the Ortoire block that I was shown a while ago on charts is really coming into its own, the Herrera fairway is indeed that, and over the next few years there are plenty of opportunities to fill up the spare capacity at the gas facility.
There will be plenty of news from TXP in coming days, this will prove that it is going to be a very substantial company with huge reserves and decent production but more importantly masses and masses of upside, yes it could be a stock for 2023.
pro_s2009
12 months ago
https://seekingalpha.com/instablog/41272106-activeeurope/5674359-touchstone-amazing-upside-still-to-come#comment-95067304
"I had a recent catch up with management and a few interesting points.
Cascadura start up remains clearly on schedule for end of June2023, NGC are now further incentivised after BP suffered a recent gas production loss of one well offshore, hence the immediate need for gas on the island is acute. NGC are working extra shifts if needed and flying in parts if needed. For TXP part they remain well on schedule and have good visibility on meeting the targets currently. Management are acutely aware of last 2 years missing timelines and I gave them every opportunity to be cautious on delivery but contrary to this they remain resolutely confident in current timelines. First gas transforms the business from a cashflow point of view and moves future drilling to self funded, it should be a material risk reduction point for the shares in lowering cost of capital/rising share price. A move for management becoming in charge of their own drilling destiny has the potential to transform the investment case over the next 18months.
Royston sidetrack well testing. It should be emphasised the first test was a ‘long shot’ but management wanted to see if there was oil present, porosity was only around 6 and no-one internally/drill team/Schlumberger expected anything much. However the next test remains in the sub thrust and has more like 12ish on porosity with a plan to perforate 2 intervals of 30ft each within what they think is much better prospectivity. Any success here in the sub thrust would add reserves and provide a good target for future drilling. The ‘main event’ is clearly the test afterwards which is the intermediate test, previously 38ft was perforated and flowed 500+BOPD. Here there is circa 20ft above and 30ft below last time test for better sand thickness and another section of 100ft below that also can be perforated. Hence we have a lot more sand thickness this time around. The hope would be that both the subthrust and intermediate tests produce some oil flow and maybe intermediate test beats management guidance of circa 500BoPD. If both tests flow the plan/hope would be to put them both on long term test comingled in a combined rate. They would then not plan to test any of the higher zones after the intermediate in this well. However if no flow rates are established higher test zones are in reserve for testing but this would be a plan B type scenario. Key point here really is that there is still everything to play for with upcoming two Royston tests. Depending on pressure they could also opt to put in a pump to help lift the oil given the weight of liquids within the pipe (10,000ft 7inch and 9 3/8inch higher up) above perforation points.
Timing/delay. Once the drilling of Royston sidetrack was complete they negotiated a decent day rate for the star valley rig for a few days to perforate the deepest section to start testing. The crew were then sent home/off island etc as no longer needed and expensive. Actual testing took longer than expected and 2 lots of swabbing plus waiting for the 10,000ft column to refill with liquid and hence the long delay, I’m still a little unsure why it took so long. From the finish of first test it’s not worth the expense of reassembling the star valley crew to use the rig again for higher up perforation and testing. Instead management chose the much cheaper option of once the rig is moved they can use a service rig but this means a delay until new Cascadura pad is finished and the star valley rig can be moved, hence the frustrating elongation of testing timelines.
The star valley rig contract runs from September to September and has a minimum number of days usage per year (also explains why willing to use it for first part of testing), hence they would like to get it drilling ASAP at Cascadura new pad site but equally they would like the certainty of cashflow from Cascadura start up, hence there is a sensible juggling act going on here to maintain a sensible prudent cash buffer within the business. There is absolutely no need for more equity. If all goes well the rig would certainly drill 2 and probably 3 wells in succession at Cascadura and long lead items for production potentially ordered after the first well drilled, taking up to 6months to arrive etc. This would hope for significantly increased Cascadura production during 2024, possibly late summer. Note the 2-3 wells would most likely add to reserves and also move reserves up from 3P to 2P and 1P in a value enhancing manner.
They await license awards. A second well at COHO looks an attractive plan but nothing scheduled in."
pro_s2009
1 year ago
https://trinidadexpress.com/business/local/crude-oil-could-soon-flow-from-touchstone-s-royston-discovery/article_076699c4-bd55-11ed-98f6-a7909c6d6dd3.html
Crude oil could soon flow from Touchstone’s Royston discovery
By the middle of April, the country should have a better idea whether Touchstone’s Royston oil discovery is as substantial as the company thinks it is and if it would see an immediate addition to the country’s oil production.
President and chief executive officer of the Canadian outfit, Paul Baay told Express Business the Touchstone 1-X well, which was recently completed, encountered a total section of about 1,700 feet, one of the thickest sections Touchstone has seen in its on-land drilling campaign, and 740 feet of sand that it thinks is prospective.
Paul Baay
The company, however, will not know if it is hydrocarbon-bearing sands until it is able to perforate and complete the well.
In an interview with Express Business Baay said, “It will be about a month before we can move the rig over to Cascadura because we are still building the drilling site, so Royston probably won’t be tested until sometime in April, probably early April, or mid-April and then if it is light oil as we think it is, then it will virtually come on production right away.”
The company recently announced that Royston-1X was drilled to a total depth of 11,316 ft and encountered substantial sands in the targeted Herrera Formation.
It noted that drilling operations took approximately 25 days, which was ahead of schedule and on budget.
Baay added that this is the deepest well Touchstone has drilled to date and also is the deepest well drilled onshore Trinidad in the last 15 years.
“The fact that the well was drilled ahead of schedule and within our budget can be attributed to the best-in-class industry standards that Touchstone is driving within Trinidad, both through the introduction of new equipment, as well as additional expertise that we have added to our technical team,” Baay boasted.
He added, “We are encouraged by the hydrocarbon indications internally interpreted from open-hole wireline logs, which show that the well successfully intersected the Herrera Formation through the sub-thrust level in one of the thickest turbidite sections observed in any of our previous wells. Once the drilling pad is completed at our Cascadura C location, the drilling rig will be moved off the Royston location, and we will commence a comprehensive testing programme that is currently anticipated to begin in April. We will update the market when results become available.”
Touchstone’s president told Express Business that the estimate of being able to produce between 6,000 and 10,000 barrels of oil per day (bo/d) was still on.
He said, “I think those are still good numbers for the field, if these completions turn out the way we want, that’s certainly our target.”
According to Baay, the plan is to put Royston on production while Touchstone drills its next two wells at its Cascadura gas field and then head back to Royston.
“We already have the approval to drill two more wells off of that same pad, so if it works we will come right back over in late 2023 and start the development at Royston, “ Baay revealed.
He estimates that the first well will produce in the vicinity of 500 bo/d and said to get to the 6,000 bo/d to 10,000 bo/d it would mean drilling up to 21 wells in the field and having them simultaneously on production.
“Our pre-drill estimate of what we were looking for here was approximately 500 barrels a day. And we would like to see that from each well, it sort of gives you an idea of what we are looking at, something which at the end of the day is something between 12 and 20 wells in the pool,” Baay noted.
He said the hope is to have all of the wells drilled and on production by 2024.
If successful this will be good news for Trinidad and Tobago which has only been able to hold production at close to 60,000 bo/d and not increase production, even at times of high prices.
On the issue of the Cascadura gas development, Baay said the company will be ready to send the first gas whenever the National Gas Company (NGC) is able to receive it.
“We got notified by the NGC that their pipelines are going to be ready by the end of June, and that’s a little later than we had hoped. We will probably be ready by the middle of May. We will have our part of the facility all done and ready by the middle of May so we will make sure we are ready and whenever the NGC is ready we can send them first gas.”
Touchstone recently told investors that the NGC will not be ready to receive gas from its Cascadura field until June 30, almost two months behind schedule.
Touchstone said, “On February 24, 2023, the Company was notified by The National Gas Company of Trinidad and Tobago Limited (NGC) that they expect to be ready to receive first gas from the Cascadura natural gas and associated liquids facility on or about June 30, 2023.”
Touchstone said it remains on track to complete the Cascadura facility prior to this date to ensure production can commence as soon as NGC is in a position to receive the first gas.
Baay told Express Business the plan is to start at 60 million standard cubic feet per day (mmscf/d) and then drill the two additional development wells that Touchstone intends to bring on at the end of 2023.
He said, “We will like to see that facility be about 100mmscf/d by December 31, 2023... The target would be somewhere between 150 mmscf/d and 200 mmscf/d I think, which is ultimately where we want to get to on that facility. We need to do some more drilling to get to that high end of the plan.”
That 150mmscf/d does not include its Coho development which is choked at eight mmscf/d.
He said, “It’s been running closer to about eight mmscf/d and that’s mainly due to the pressures going into the Shell facility. The well is still what we call choked back to meet the pressures into the Shell facility. It is capable of much more but that’s all we are able to run it at right now.”
pro_s2009
2 years ago
Paul Baay at the UK Investor Show
Date: The Global Group UK Investor Show will take place on Saturday 21st May 2022
Location: QEII Centre, London, SW1P 3EE
#TXP’s President and CEO, Paul Baay, will be speaking at the @UKInvestorShow in London on May 21, 2022. Find out more about the event here: https://t.co/chIH4asjax and use code TOUCHSTONE22 to redeem a free standard ticket. pic.twitter.com/aZfuPZTOOI— Touchstone Explor. (@TouchstoneExp) April 14, 2022
Show link : http://www.ukinvestorshow.com/may-2022-show
pro_s2009
2 years ago
So, my summary of the main points from the presentation:
Cash flow positive now from operations.
Fully funded to bring Coho and Cascadura online.
Focus is get them both on line, get the cash flowing.
No more equity fund raising so no placings.
Coho on line in May 2022 with 10mmscf/day
EIA approval of Cascadura mid May 2022.
Cascadura online around September 2022 all being well with 90mmscf/day
Once clear line of sight of Cascadura being online drilling resumes.
Drilling in 2022 will be 2 off Coora wells, then Royston-1 sidetrack.
Then in Q4 Cascadura development drilling commences after sidetrack.
Royston-1 currently producting 70bopd from the upper tiny section of Overthrust only.
Sidetrack will drill through the complete intermediate section.
Intermediate section (part of) did 550bopd before.
Sidetrack complete we may see up to 1000bopd cumulative from Royston-1.
Unsure at this time if sidetrack will poke into top of the subthrust.
Danger being going deeper may create issues, dont want to lose the intermediate.
Subthrust expected to be oil and highly prolific based on PB oilfield.
May wait for Royston Deep-1 in 2023 to go into Sub Thrust.
2023 continues with Cascadura development drilling to get up to 200mmscf/day asap.
Royston Deep-1 and Krakken-1 will be fitted into the plan as and when possible.
Coho-2 production well likely in 2023.
Focus is, get production up and up and up.
5 year extension to the Ortoire exploration license allows explo drills to be second priority now, no rush. Fit them in as and when between development wells.
Did I mention no placings ?
Legacy WD wells drilled last year are now being finished with the service rig
Production from these wells should near double after servicing/pump install.
Oil samples from Royston align with Guyana/Suriname oil, bodes well for Krakken drill.
Excess cash flow will be directed back into development and exploration drilling.
If still excess then certainly looking at dividends.
Changing company from exploration with a little production to
Production, loads of cashflow with large exploration upside.
Looking at new licenses in the coming bid round, they know the ones with Cretaceous leads in them, for follow on exploration if Krakken has oil.
Downhole issues experienced in 20/21 have been looked at and investigated and actions taken to improve performance in future.
My own thoughts on this :
2022 likely to see Coora wells start in H2, then Royston-1 sidetrack. Then Cascadura B1 and B2 development wells in Q4.
2023 starts with Cascadura C1 and C2 development wells, then possibly Rosyton Deep-1 and Krakken-1 and then Coho-2.
10.5 million current share short will have to be closed buying from the market, no placings.
May should have lots of news (Coho and EIA) and then a short run to Casca being online. So we should see now a positive share price uptrend into Cascadura production online and of course, sometime that big short must close.
.
pro_s2009
2 years ago
INVESTOR PRESENTATION
CALGARY, ALBERTA (March 30, 2022) - Touchstone Exploration Inc. ("Touchstone", " or the "Company") (TSX, LSE: TXP) is pleased to announce that President and CEO, Paul Baay, COO, James Shipka, CFO, Scott Budau and the Touchstone team will provide an Investor Update presentation and Q&A via the Investor Meet Company platform on Thursday, 31 March 2022 at 1:00pm BST.
The presentation is open to all existing and potential shareholders. Questions can be submitted pre-event via your Investor Meet Company dashboard up until 9am the day before the meeting or at any time during the live presentation.
To register for the event please use the following link:
https://www.investormeetcompany.com/touchstone-exploration-inc/register-investor
For further information about Touchstone, please visit our website at www.touchstoneexploration.com or contact:
Mr. Paul Baay, President and Chief Executive Officer Tel: +1 (403) 750-4487
Mr. James Shipka, Chief Operating Officer
Mr. Scott Budau, Chief Financial Officer
pro_s2009
2 years ago
I understand the frustration with the delays but lets be honest.
This is VERY NORMAL when an oil or gas production facility is brough online for the first time in 20 years.
As an example I can point you to Petro Matad (MATD) where they made the Heron discovery and wanted it online quickly. Nobody had applied for an oil production facility for perhaps 20 years. Everything had to be reviewed, tonnes of paperwork and red tape, everyone in government unsure of the process.......and still Heron is not online. I think it will be 3 years.
The same applies to Trinidad and new gas production. Nobody has applied for over 20 years, nobody in government has any experience of it, lots of CYA and being unsure, lots of delays........
This is very normal. And the only thing Paul is guilty of is "enthusiasm".
We can look at oil differently. Rosyton discovery, its on EWT now producing oil and the oil produced is being sold. Very quick and simple.
How many people are thanking Paul for so quickly selling EWT oil from Royston ? Nobody ? and yet many are happy to berate him for the holds ups with gas.
The delays on the gas are a "one time" thing. Everyone will have learned about the process, and everything in future will be very much faster, especially without Covid as well, and in the case of Coho - without Shell being snails and holding things up as well.
So ultimately - why am I buying more now ?
I am adding now at lows with a view to major news in 6 to 9 months time. This is investing, buying the low, viewing the events in the future, taking advantage of the potential success.
Cascadura online and Krakken-1 drilling. Thats 2 massive events for TXP and events which could push the price of TXP up to the range of 200p to 450p (450p if Krakken hits oil and 200p+ with Cascadura being online and generating all that cash).
Cascadura is worth 150p a share now to TXP pre-production, that you can buy below this presents opportunity. Add in potential "major oil discovery" confirmation at Royston and then Krakken-1 well to be drilled in the summer, and Cascadura being online - then its a solid investment imo with a 9 month outlook.
Things should kick off with the two Coora wells sometime later in this month or April, then the rig moves to drill Royston Deep-1 and then all being well Krakken-1. We have Coho gas online hopefully by end of May. Cascadura should be online by late August. Also Bass, Steelhead and Guabine exploration targets (and many more on top of them) and more than likely the Chinook oil discovery will be drilled updtip in late 2023/2024.
Year end 2022 we should see 100mmscf/day gas production (plus liquids) from Coho and Cascadura, with that ramping up to 200mmscf/day by end of 2023.
Year end 2022 we should see near 2000bopd from the Legacy oil licenses after the 2 Coora wells are done - we should see that level by end of H1 2022 actually.
And we potentially will have three oil wells at Royston producing via EWT being Royston-1 and Royston Deep-1 and Krakken-1. Between those 3 what might they yield ? 2000bopd ? 3000 bopd?
So much is going on in the future, but yes, frustrating for the moment but I firmly believe patience will be handsomely rewarded, very handsomely rewarded.........and remember, all that "Stock on Loan" all 9 million shares of it borrowed from Crest and short sold, has to be purchased back and returned to Crest at some point. They will not be holding that short level once Cascadura is online, so the timeline to close that short is now less than 6 months.
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