In its Q3 report, Touchstone Exploration unveiled that it has invested $5,758,000 in exploration activities onshore Trinidad. The expenditure has been primarily focused on Chinook-1 drilling operations and surface facility equipment expenditures relating to Coho-1 tie-in operations.
According to Paul Baay, President and CEO, Touchstone Exploration, "The Board's focus remains on our Ortoire property where exploration activities to date have significantly exceeded expectations. Our base crude oil production continues to cover our operating costs, allowing us to direct our capital exclusively to our ongoing exploration programme. The oversubscribed private placement completed post period places us in a strong position to continue the execution of our Ortoire drilling, production testing and tie-in operations. We are currently drilling our fourth exploration well, Cascadura Deep-1, and we are in the process of finalising a nine-month extension to the exploration phase of the Ortoire licence. Alongside this, we continue to negotiate a natural gas sales agreement with the National Gas Company of Trinidad and Tobago. I look forward to updating our shareholders as operations progress."
According to the company’s release, despite the ongoing challenges as a result of COVID-19, Touchstone continued to manage the business prudently during the quarter, achieving positive cash flows despite limited developmental capital activity since 2018 and progressing with the Ortoire exploration programme, while maintaining safe and reliable operations.
Touchstone’s investment focus remains on the Ortoire exploration block, as the company spudded its third drilling prospect (Chinook-1) in the quarter, which reached total depth in mid-October.
The company indicated that its operating and general and administrative (G&A) cost reductions initiated in the second quarter of 2020 have enhanced the financial resilience and financial capability to maintain its base production and to deliver safe operations.
“We remain focused on protecting the health of our employees and communities while ensuring a decisive response for our investors. We will continue to follow the advice of public health officials in supporting our employees, their families and our business partners”, the company said. “Our objective remains to bring our two natural gas exploration discoveries onto production as soon as possible, which are expected to not only increase cash flow but insulate us from further crude oil price volatility from the continued effects of COVID-19. Drilling operations are ongoing at our Cascadura Deep-1 prospect, and we anticipate commencing production testing at our Chinook-1 discovery upon completion.”
According to the company, the rapid decline in oil prices had a negative impact on their cash flows during the nine months ended September 30, 2020 and their projections for the balance of the year. Ongoing weakness in commodity prices resulting from COVID-19 impacts on demand and market volatility may adversely affect the company’s future financial and operational results. Touchstone continues to monitor the situation and economic environment and has indicated that it will continue to adapt the business operations and exploration programme to ensure that it preserves and grow long-term shareholder value.
