Touchstone staunches losses in second quarter thanks to higher oil prices

Touchstone Explorations, a Canadian petroleum and natural gas company based in Calgary, Alberta on Friday announced its second quarter interim results.

The company also posted second quarter average crude oil sales of 1,334 barrels per day, for an increase of 4% on the first quarter.

Revenues from petroleum were said to be $5.27m at the end of the three-month stretch, a 21% increase on the same time last year thanks to improved crude oil pricing.

Indeed, over the first six months of the year realised operating netback - a measure of gross profits on each barrel of oil produced - increased from $9.27 a barrel to $21.72, the company said in a statement.

That drove an improvement in its funds from operations of $438,000 versus the $393,000 it reported for the first quarter, with both figures representing FFO of $0.01 per share.

However, total expenses rose year-on-year from $5.74m to $6.82m, with the most notable increase coming from the company's operating costs, up from $2.42m to $2.86m, with production falling in the first half compared to a year earlier.

So, despite an improvement on the $4.2m of red ink seen in the second quarter of 2016, the firm still posted a pre-tax loss of $1.6m.

To take note of, after completing its admission and listing on the London Stock Exchange's AIM market on 26 June, the company successfully placed 200,000 new common shares in the United Kingdom for gross proceeds totalling just below $2.5m.

The company said its net debt at the end of the quarter sat at $13.8m, a slightly improved position to the $14.1m it had at the start of the year, but a significantly worsened position than the $4.2m the firm reported at the end of the second quarter of 2016.

Touchstone drilled three onshore wells in Trinidad in the second quarter of 2017.

"The fourth well was successfully drilled post quarter end with all four wells currently on production. This drilling program had little effect on second quarter financial and operating results as incremental production came on late in June, however, we expect to see the full impact of these wells during the second half of the year," said Paul Baay, president and chief executive of Touchstone.

As of 1015 BST, shares had dropped 5.76% to 290.25p.