Touchstone swings to loss despite rise in production

Touchstone Exploration reported an 18% increase in average daily production volumes in its full-year results on Friday, driven by incremental natural gas production from the Coho-1 well, although it did swing to a loss for the year.

The AIM-traded company noted that Coho-1 was the first onshore natural gas field to come onstream in Trinidad in 20 years.

It commissioned and delivered natural gas from the Coho facility on 10 October , after the Coho and Cascadura areas were approved for commercial development in February 2021 and March 2022, respectively.

The firm executed an incident-free $11.33m capital programme, primarily focussed on completing the Coho natural gas facility and progressing construction of the Cascadura natural gas and liquids facility.

Touchstone generated funds from operations of $3.54m in 2022, and an annual operating netback of $19.28m, or $33.42 per barrel of oil equivalent.

That represented an increase from 2021’s funds from operations of $4.17m and operating netback of $13.03m, or $26.55 per barrel equivalent.

Its net loss, however, was $3.2m or one US cent per basic share, which the board put down to $6.32m in impairment reversals recognised in 2021, based on increased forecasted crude oil pricing.

That was a swing from net earnings of $5.72m, or three cents per basic and diluted share, in the prior year.

Touchstone noted that it had formally executed an extension to the exploration period of the Ortoire licence to 31 July 2026, allowing it to continue activities on acreage that was not deemed commercial.

Responsible operations remained a top priority throughout 2022, the board said, as Touchstone had no lost time injuries and released its second sustainability report, focussing on 2021.

It said it “proactively responded” to the June “vandalism incident”, which resulted in a crude oil spill, and completed all reclamation efforts in September.

“In January 2023, we entered into an asset exchange agreement for certain onshore Trinidad assets with a privately held Trinidadian entity,” the board said of its current operations.

“Pursuant to the agreement, we agreed to swap our operated 100% working interests in the Fyzabad, San Francique and Barrackpore producing blocks for the counterparty's working interest in the Rio Claro, Balata East and Balata East Deep Horizons blocks for no cash consideration, with the asset exchange becoming effective upon closing.

“The agreement remains subject to certain closing conditions, including receipt of applicable regulatory approvals and an extension of the Rio Claro licence.”

At 1528 GMT, shares in Touchstone Exploration were flat at 61p.

Reporting by Josh White for Sharecast.com.