Touchstone Exploration plc (LON:TXP) Chief Executive Officer Paul Baay caught up with DirectorsTalk for an exclusive interview to discuss a positive set of results and operational update, activities on the wider Cascadura block, and what’s next for the company.
Q1: Paul, Touchstone Exploration announced a positive set of results at Cascadura-2 well, as well as the wider operational update. Firstly, could you just talk us through the drilling results?
A1: The Cascadura-2 well was what we call a development well but it was really a delineation well, it was on what we thought was the far eastern side, we now know it goes further than that, of the big structure that we call Cascadura.
We were going to drill the well to about 8,300 feet, we had to stop after about 7,100 feet because we were taking on gas and we we’re afraid that possibly lose the well so what we wanted to do was make sure we had that under control so we had to stop a little bit early at 7,100 feet, that’s a good thing.
As far as what we saw, we saw about 525 feet of sand in the Herrera, arguably some of the best sand that we’ve seen to date in what we saw in the well bore. It was really exciting to see and it proved up the technical model that we had for the structure so really exciting for us.
Q2: So, what’s the significance of the results?
A2: I think there’s a couple of things.
One of the models that we had this year was drill to fill, and that’s really as a result of the last couple of years we’ve been building gas plants and some things maybe that aren’t that exciting to the capital markets.
Really, the significance of this now is that drilling this well on the far eastern side, it really sets up a number of locations for us over the coming years that are our development and what we can do is now ramp that that plant up from the current production rate that it’s at you know something close to 100 and then up to possibly up to even 200 million a day as we drill up these wells over the next little while.
So, it de-risks the play a lot and then the other thing it does is it sets a whole bunch of development locations up for us so it’s a really exciting piece of the puzzle for us.
Q3: Now, you also announced an update on activities at the wider Cascadura block and CO-1, can you talk us through some of the highlights there?
A3: There’s a couple of things, we brought on these two wells back in September and started running them through the plant and we’ve been optimising both the plant and the wells.
The one well that we call Cascadura Deep, we added some perforations to it and got some nice higher pressures and higher initial rates. We want to let that settle out before we feel really comfortable on what the actual numbers are but what it’s definitely proved to us that we’ve got to do some more perforations in that CAS deep but it also talks about how thick these sections are and the opportunities that we get. So we’re seeing that a little bit.
The other thing is in our big well that we’ve got there which may not be our biggest hole anymore after the last well we just drilled but we’re messing around with some choke sizes at surface that are still currently restricting the reservoir.
We’re slowly figuring these out and these wells will be on production for the next 20 years so we just want to make sure we get it right on the front end.
Q4: It seems like there’s a lot of positive momentum going on, what’s next for Touchstone Exploration?
A4: Yes, I think there is some positive momentum. As I said last couple of years, it’s really been about building these plants and getting the getting the infrastructure in place so we can now go to the drilling.
The next things that are coming up is we’re going to move right to the next well at Cascadura with this rig that we’ve got, it just it can walk itself about 30 feet and then we start drilling the next well and hopefully there’ll be a sequence of wells after that as well. At the same time, we’ve now started the procurement and land and pipeline construction to take these wells back in.
I think it shows our confidence that we’ve got, we’re not even going to test this first well, we’ll test it into the new pipeline and back into the plant and we’re hoping that that’ll be on in the latter end of third quarter. So, that’s on the Cascadura side, what we’re going to do.
Parallel to that, at our what we call our CO-1 block, which is an oil block, we’ve got a couple of wells that are start drilling there the end of February.
So, there’s certainly lots going on in the first half of the year and what we’ll see is we’ll really see another step up in production in the latter half of the year so yes, lots of exciting stuff going on.
