# Touchstone Exploration announces independent reserves evaluation

- Link: https://www.directorstalkinterviews.com/touchstone-exploration-announces-independent-reserves-evaluation/412807779
- Published: 2020-03-06T07:22:46+00:00
- Author: Giles Arbor

**[Touchstone Exploration](https://www.directorstalkinterviews.com/company/touchstone-exploration-inc/txp.l)
Inc.** (TSX, [LON:TXP](https://www.directorstalkinterviews.com/company/touchstone-exploration-inc/txp.l))
announced today highlights of an independent reserves evaluation prepared by GLJ
Petroleum Consultants Ltd. with an effective date of December 31, 2019.

Highlights of our total proved, total proved plus probable and total proved plus
probable plus possible reserves from the Reserves Report are provided below. All
finding, development and acquisition costs below include changes in future development
capital. Unless otherwise stated, all financial amounts herein are rounded to thousands
of United States dollars. The financial information contained herein is based on
the Company’s unaudited expected results for the year ended December 31, 2019 and
is subject to change.

Touchstone’s 2019 capital program focused on exploration activities on our Ortoire
property, where we drilled two gross (1.6 net) exploration wells. We conducted minimal
capital development activity on our development properties, mainly performing wellbore
recompletions to arrest production declines. The Reserves Report included those 
reserves associated with our development properties as well as new reserves associated
with our Coho natural gas discovery in 2019. The Reserves Report does not include
any reserves associated with the Cascadura discovery given well testing commenced
subsequent to the effective date of the report.

**2019 Year-end Reserves Report Highlights**

 * Increased 1P reserves by 6% to 11,840 Mboe and increased 2P reserves by 14% to
   22,056 Mboe from the prior year.
 * Replaced 2019 annual production by 193% on a 1P reserves basis and 519% on a 
   2P reserves basis.
 * Realized after tax 1P 10% discounted net present value of future net revenues(“
   NPV10”) of $83.7 million, representing an increase of $4.0 million or 5% from
   the prior year.
 * Achieved an after tax 2P NPV10 of $153.9 million, an increase of 6% from $145.4
   million in 2018.
 * Realized 1P FD&A costs of $7.75 per boe, resulting in a recycle ratio 3.4 times
   using our unaudited annual 2019 operating netback of $26.62 per boe.
 * Achieved 2P FD&A costs of $3.95 per boe, resulting in a 2P recycle ratio of 6.7
   times.
 * FDC associated with only a portion of our internally identified drilling location
   inventory and portfolio of low risk recompletion projects totaled $45.4 million
   for 1P reserves and $71.7 million for 2P reserves.

*Coho was assigned gross working interest 1P reserves of 1,148 Mboe and gross working
interest 2P reserves of 3,349 Mboe with a 2P NPV10 of $27.5 million before taxes.

> **James Shipka, Touchstone Exploration Chief Operating Officer, commented:**
> “The Company’s independent 2019 reserves evaluation reflected the strong performance
> of our base production and included the first reserves associated with our discoveries
> on the Ortoire exploration block. With gross working interest 2P reserves of over
> 20 Bcf (approximately 3.4 million boe) assigned at Coho, the Company has exceeded
> the best estimates of the recoverable gas in the pool compared to the independent
> evaluation report prepared for the Company in the prior year. With the second 
> stage of the production test at Cascadura-1ST1 expected to commence this weekend,
> we look forward to updating our shareholders on this material discovery and the
> impact it will have on corporate reserves.”

**2019 Year-end Reserves Report Summary**

Touchstone’s year-end crude oil and natural gas reserves in Trinidad were evaluated
by independent reserves evaluator, GLJ, in accordance with definitions, standards
and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National
Instrument 51-101 Standards of Disclosure for Oil and Gas Activities. Additional
reserves information as required under NI 51-101 will be included in the Company’s
Annual Information Form, which will be filed on SEDAR on or before March 30, 2020.
The reserve estimates set forth below are based upon GLJ’s Reserves Report dated
March 4, 2020 with an effective date of December 31, 2019. All values in this announcement
are based on GLJ’s forecast prices and estimates of future operating and capital
costs as at December 31, 2019. In certain tables set forth below, the columns may
not add due to rounding.

![touchstone1 (TXP)](https://www.directorstalkinterviews.com/wp-content/uploads/
2020/03/touchstone1-729x1024.png "Touchstone Exploration announces independent reserves
evaluation (TXP)")

![touchstone2 (TXP)](https://www.directorstalkinterviews.com/wp-content/uploads/
2020/03/touchstone2-906x1024.png "Touchstone Exploration announces independent reserves
evaluation (TXP)")

![touchstone3 (TXP)](https://www.directorstalkinterviews.com/wp-content/uploads/
2020/03/touchstone3.png "Touchstone Exploration announces independent reserves evaluation(
TXP)")

Notes:

(1) Financial information is based on the Company’s preliminary 2019 unaudited financial
statements and is therefore subject to audit. See “Advisories: Unaudited Financial
Information”.

(2) Exploration and development capital exclude capitalized general and administration
costs and corporate asset expenditures. See “Advisories: Oil and Gas Metrics”.

(3) Gross Reserves are the Company’s working interest share of the remaining reserves
before deduction of any royalties.

(4) See “Advisories: Reserve Advisory” and “Advisories: Oil and Gas Metrics”.

(5) See “Non-GAAP Measures”.

Touchstone Exploration Inc.

Touchstone Exploration Inc. is a Calgary based company engaged in the business of
acquiring interests in petroleum and natural gas rights and the exploration, development,
production and sale of petroleum and natural gas. Touchstone is currently active
in onshore properties located in the Republic of Trinidad and Tobago. The Company’s
common shares are traded on the Toronto Stock Exchange and the AIM market of the
London Stock Exchange under the symbol “TXP”.

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