Touchstone Exploration Inc. (LON:TXP) has reported its operating and condensed financial results for the three months ended March 31, 2025.
Selected financial information is outlined below and should be read in conjunction with our March 31, 2025 unaudited interim condensed consolidated financial statements and related Management’s discussion and analysis, both of which are available online under our profile on SEDAR+ (www.sedarplus.ca) and on our website (www.touchstoneexploration.com). Unless otherwise stated, all financial amounts presented herein are in United States dollars, and all production volumes disclosed herein are sales volumes based on Company working interest before royalty burdens.
First Quarter 2025 Financial and Operating Highlights
· Production: Average quarterly production decreased to 4,317 boe/d (72 percent natural gas), compared to 5,287 boe/d (73 percent natural gas) in the fourth quarter of 2024 and 7,015 boe/d (80 percent natural gas) in the first quarter of 2024. The decrease was primarily driven by natural declines in natural gas and liquids production from the Cascadura-1ST1 and Cascadura Deep-1 wells, partially offset by incremental volumes from the Cascadura-2ST1 and Cascadura-3ST1 wells which began production in November 2024.
· Revenue: Petroleum and natural gas sales totaled $11.11 million, an 18 percent reduction from the $13.54 million recorded in the previous quarter.
– Crude oil sales: $6.68 million from average production of 1,162 bbls/d at a realized price of $63.86 per barrel.
– NGL sales: $0.22 million from average production of 39 bbls/d at a realized price of $64.05 per barrel.
– Natural gas sales: $4.21 million from average production of 18.7 MMcf/d (3,116 boe/d) at a realized price of $2.50 per Mcf.
· Operating Netback: Generated $6.15 million in operating netback, an 11 percent decrease from the fourth quarter of 2024, primarily due to decreased petroleum and natural gas sales and related royalties, partially offset by a 38 percent reduction in operating costs, supported in part by revisions to historical crude oil field head licence expenses.
· Funds Flow from Operations: Decreased to $2.58 million from $3.61 million in the previous quarter, as lower operating netbacks and higher cash finance and general and administrative expenses were partially offset by reduced transaction and current income tax expenses.
· Net Earnings: Recorded net earnings of $41,000 ($0.00 per basic and diluted share), compared to a net loss of $542,000 ($0.00 per basic share) in the fourth quarter of 2024 which was primarily driven by both $2.31 million in pre-tax Ortoire exploration asset impairment expenses and higher depletion expenses recorded in the prior quarter following Cascadura reserves reductions.
· Capital Investments: Invested $6.67 million during the quarter, primarily for the Cascadura-4 development well. Drilling operations were suspended in February for rig repairs, briefly resumed in March, and halted again due to wellbore instability. Activities are expected to resume by the end of May with the arrival of specialized equipment.
· Financial Position: Ended the quarter with a cash balance of $5.72 million and net debt of $33.33 million, resulting in a net debt to funds flow from operations ratio of 2.53 times.
Post Period-end Highlights
· Private Placement: On May 8, 2025, the Company announced a private placement targeting United Kingdom investors, expected to raise gross proceeds of approximately $20.5 million through the issuance of 75,000,000 common shares at a price of 20.5 pence sterling per share (approximately C$0.38 per share). Proceeds will be used to advance development activities.
· Acquisition Financing: On May 12, 2025, Touchstone executed a Fourth Amended and Restated Loan Agreement with its existing Trinidad-based lender, securing a new six-year, $30 million non-revolving term loan facility to finance the Company’s previously announced acquisition.
· Production Update: In April 2025, the Company produced average net sales volumes of 3,628 boe/d, including average net natural gas sales volumes of 14.7 MMcf/d (2,445 boe/d) and average net crude oil and natural gas liquid sales volumes of 1,183 bbls/d.
First Quarter 2025 Financial and Operating Results Overview
| Three months ended | |||
| March 31,2025 | December 31, 2024 | March 31,2024 | |
| Operational | |||
| Average daily production | |||
| Crude oil(1) (bbls/d) | 1,162 | 1,310 | 1,166 |
| NGLs(1) (bbls/d) | 39 | 121 | 262 |
| Crude oil and liquids(1) (bbls/d) | 1,201 | 1,431 | 1,428 |
| Natural gas(1) (Mcf/d) | 18,698 | 23,136 | 33,521 |
| Average daily production (boe/d)(2) | 4,317 | 5,287 | 7,015 |
| Production mix (% of production) | |||
| Crude oil and liquids(1) | 28 | 27 | 20 |
| Natural gas(1) | 72 | 73 | 80 |
| Average realized prices(3) | |||
| Crude oil(1) ($/bbl) | 63.86 | 62.50 | 69.95 |
| NGLs(1) ($/bbl) | 64.05 | 62.05 | 69.59 |
| Crude oil and liquids(1) ($/bbl) | 63.87 | 62.47 | 69.88 |
| Natural gas(1) ($/Mcf) | 2.50 | 2.50 | 2.46 |
| Realized commodity price ($/boe)(2) | 28.60 | 27.85 | 25.98 |
| Operating netback ($/boe)(2) | |||
| Realized commodity price(3) | 28.60 | 27.85 | 25.98 |
| Royalty expense(3) | (7.25) | (6.59) | (5.76) |
| Operating expense(3) | (5.52) | (7.09) | (3.83) |
| Operating netback(3) | 15.83 | 14.17 | 16.39 |
| Financial ($000’s except per share amounts) | |||
| Petroleum and natural gas sales | 11,113 | 13,543 | 16,584 |
| Cash from operating activities | 5,611 | 822 | 5,369 |
| Funds flow from operations | 2,580 | 3,614 | 6,142 |
| Net earnings (loss) | 41 | (542) | 3,628 |
| Per share – basic and diluted | 0.00 | (0.00) | 0.02 |
| Exploration and evaluation asset expenditures | 423 | 426 | 108 |
| Property, plant and equipment expenditures | 6,250 | 2,680 | 11,854 |
| Capital expenditures(3) | 6,673 | 3,106 | 11,962 |
| Working capital deficit(3) | 7,705 | 1,359 | 14,121 |
| Principal long-term bank debt | 25,625 | 27,750 | 13,500 |
| Net debt(3) – end of period | 33,330 | 29,109 | 27,621 |
| Share Information (000’s) | |||
| Weighted average shares outstanding | |||
| Basic | 236,461 | 236,461 | 234,213 |
| Diluted | 236,461 | 236,461 | 236,548 |
| Outstanding shares – end of period | 236,461 | 236,461 | 234,213 |
Notes:
(1) Refer to “Advisories – Product Type Disclosures” for further information.
(2) In the table above and elsewhere in this announcement, references to “boe” mean barrels of oil equivalent that are calculated using the energy equivalent conversion method. Refer to “Advisories – Oil and Natural Gas Measures” for further information.
(3) Specified or supplementary financial measure. Refer to “Advisories – Non-GAAP Financial Measures” for further information.
2025 Outlook and Guidance
We remain focused on financial discipline and maximizing value from our development and exploration assets. Our near-term strategy is to close the previously announced acquisition and increase cash flows through the development of the Cascadura field, leveraging the processing capacity established in 2024.
On December 9, 2024, we issued a news release announcing the approval of our preliminary financial and operating guidance for 2025. Given the material nature of the pending acquisition, the Company intends to provide updated 2025 guidance following its expected closing.
2025 Annual Meeting of Shareholders
Touchstone Exploration’s virtual-only Annual Meeting of Shareholders will be held on Thursday, June 19, 2025 at 8:00 a.m. (Mountain Time).
Registered and beneficial shareholders will be mailed a notice-and-access notification and form of proxy on or about May 20, 2025, advising as to the electronic availability of the Meeting materials, including the 2025 Management Information Circular dated May 8, 2025, the 2024 audited consolidated financial statements and related Management’s discussion and analysis.
For holders of our depositary interests, hard copies of our Management Information Circular and form of direction will be mailed on or about May 20, 2025.
Subsequent to the estimated mailing date, the Meeting materials will be available online under our profile on SEDAR+ (www.sedarplus.ca) and on our website (www.touchstoneexploration.com).
