Touchstone Exploration has announced that its indirect wholly-owned Trinidadian subsidiary, Primera Oil and Gas Limited, has entered into an Asset Exchange Agreement for the exchange of certain onshore Trinidad assets with Lease Operators Limited, a privately held Trinidadian entity.
The company has agreed to transfer the Fyzabad, San Francique and Barrackpore blocks, which currently produce aggregate crude oil volumes of approximately 130 barrels per day (bbls/d), in exchange for the Rio Claro, Balata East and Balata East Deep Horizons blocks, which offset the Ortoire block and currently produce aggregate crude oil volumes of approximately 35 bbls/d.
Transaction Highlights The transaction contemplates swapping producing legacy crude oil fields, which are considered non-core due to limited scalability, in exchange for highly prospective exploration and development acreage contiguous to its Ortoire block.
Acquisition of approximately 28,000 working interest acres, directly offsetting the Ortoire block, allows it to significantly expand development prospects adjacent to our Cascadura and Royston discoveries.
The Balata East block has a liquids facility that may potentially be used as a delivery point for future liquids volumes produced at Cascadura and Royston.
The transaction also provides Touchstone access to an 18-kilometre oil pipeline that transects the Ortoire block.
Future potential production from the Rio Claro block is not subject to the current Ortoire block natural gas sales agreement with The National Gas Company of Trinidad and Tobago Limited, with any potential discoveries subject to separate product marketing arrangements.
Transaction Details Under the Agreement, Touchstone has agreed to swap its 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 Deep blocks for no cash consideration, with the swap 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 Exploration and Production (Public Petroleum Rights) Licence (the “Rio Claro Licence”), and is expected to close prior to the end of 2023.
The 100% working interest Balata East block is governed by an Enhanced Production Service Contract with Heritage Petroleum Company Limited (“Heritage”) in the shallow horizon that is effective through June 30, 2030. The Balata Deep asset is a 100% working interest in the area identified in the Balata East block from a depth of 5,000 feet downwards with no limit. The Balata Deep block is governed by an Exploration and Production (Public Petroleum Rights) Licence with the Trinidad and Tobago Ministry of Energy and Energy Industries (“MEEI”), where the initial exploration period expires August 13, 2025. The Rio Claro Licence with the MEEI is currently expired, and an extension through August 2025 is a condition precedent for closing. The Rio Claro Licence is for an 80% operated working interest, with Heritage holding the remaining 20% working interest.
Paul Baay, President and Chief Executive Officer said, “The proposed exchange of assets further high-grades our portfolio as we focus on the Herrera turbidite fairway directly offsetting our Ortoire block in close proximity to our Cascadura discovery. With the technical data that we have reviewed on the three licences, we have identified numerous drilling opportunities that can be incorporated into our infrastructure currently being constructed. A revised map reflecting the proposed transaction can be found in our updated corporate presentation available on our website.”