# Touchstone Exploration Financial and Operating Results 2022

- Link: https://www.directorstalkinterviews.com/touchstone-exploration-financial-and-operating-results-2022/4121111820
- Published: 2023-03-24T07:16:18+00:00
- Author: Anthony Fox

**[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))
has reported its operating and financial results for the three months and year ended
December 31, 2022. Selected information is outlined below and should be read in 
conjunction with our December 31, 2022 audited consolidated financial statements,
the related Management’s discussion and analysis and our December 31, 2022 Annual
Information Form, all of which will be available under our profile on SEDAR (www.
sedar.com) and on our website (www.touchstoneexploration.com).

**Fourth Quarter 2022 Financial and Operating Highlights**

·      Achieved initial natural gas production from our Coho-1 well, which produced
average net volumes of 5,729 Mcf/d (955 boe/d) in the quarter and contributed $1,114,000
of net natural gas sales.

·      Produced quarterly average volumes of 2,229 boe/d, a 67 percent increase 
relative to the 1,336 boe/d produced in the prior year equivalent quarter.

·      Realized petroleum and natural gas sales of $9,919,000 compared to $8,212,000
in the prior year equivalent quarter, reflecting natural gas sales from Coho and
a 12 percent increase in average crude oil pricing in the fourth quarter of 2022.

·      Generated an operating netback of $4,319,000, representing a 17 percent increase
from the prior year equivalent quarter. Operating netbacks were $21.05 per boe, 
a 30 percent decrease from the $29.96 per boe reported in the fourth quarter of 
2021, attributed to natural gas volumes brought online in the quarter.

·      Recognized current income tax expenses of $1,092,000 in the quarter compared
to $208,000 in the fourth quarter of 2021, driven by $979,000 in supplemental petroleum
tax expenses based on our average realized crude oil price exceeding the $75.00 
per barrel threshold in the period.

·      Reported funds flow from operations of $691,000 in the quarter compared to
$1,309,000 in the prior year equivalent quarter, as a $637,000 increase in operating
netbacks was offset by increased general and administration, term loan interest 
and current income tax expenses.

·      Recognized a net loss of $1,921,000 ($0.01 per basic share) in the quarter
compared to net earnings of $6,514,000 ($0.03 per basic and diluted share) reported
in the same period of 2021, principally driven by $6,323,000 of impairment reversals(
net of tax) recorded on December 31, 2021.

·      Following the December Canadian and United Kingdom private placements that
raised net proceeds of $12,269,000, we exited the quarter with a cash balance of
$16,335,000, a working capital surplus of $4,992,000 and a principal balance of 
$27,000,000 remaining on our term credit facility, resulting in a net debt position
of $16,008,000.

**Annual 2022 Financial and Operating Highlights**

·      Commissioned and delivered natural gas from the Coho facility on October 
10, 2022, representing the first onshore natural gas field to come onstream in Trinidad
in 20 years.

·      Reported average daily production volumes of 1,581 boe/d, reflecting an 18
percent increase from 2021. Relative to 2021, the 2022 annual increase was attributed
to incremental natural gas production from the Coho-1 well, as average 2022 crude
oil and liquids production were consistent with 2021 levels.

·      Generated funds flow from operations of $3,540,000 (2021 – $4,172,000) and
an annual operating netback of $19,281,000 or $33.42 per boe (2021 – $13,031,000
and $26.55 per boe).

·      Recognized a net loss of $3,197,000 ($0.01 per basic share) compared to net
earnings of $5,719,000 ($0.03 per basic and diluted share) in 2021, primarily attributed
to $6,323,000 in impairment reversals (net of tax) recognized in the prior year 
based on increased forecasted crude oil pricing.

·      We executed an incident-free $11,330,000 capital program, primarily focused
on completing the Coho natural gas facility and progressing construction of the 
Cascadura natural gas and liquids facility. Cascadura facility construction operations
commenced in October 2022 following receipt of all required regulatory approvals.

·      Formally executed an extension of the exploration period of the Ortoire licence
to July 31, 2026, allowing us to continue exploration activities on acreage that
have not been deemed commercial. The gross 1,317-acre Coho area and the gross 2,377-
acre Cascadura area were previously approved for commercial development in February
2021 and March 2022, respectively.

·      Responsible operations remained a top priority throughout 2022, as Touchstone
had no lost time injuries and released its second [sustainability](https://www.directorstalkinterviews.com/sustainability-green-stocks-news)
report encompassing the 2021 year. We proactively responded to the June 2022 vandalism
incident that resulted in a crude oil spill and are pleased to report that all reclamation
efforts were completed in September 2022.

**Post Period-End Highlights**

·      Net average natural gas volumes from Coho-1 were 900 boe/d and 864 boe/d 
in January 2023 and February 2023, respectively.

·      Daily crude oil sales averaged 1,286 bbls/d in January 2023 with a realized
price of $66.48 per barrel and averaged 1,341 bbls/d in February 2023 with a realized
price of $67.14 per barrel.

·      The National Gas Company Of Trinidad and Tobago Limited (“NGC”) notified 
us that they expect to be ready to receive first natural gas from the Cascadura 
facility on or about June 30, 2023. We remain on track to complete the Cascadura
facility prior to this date to ensure production can commence as soon as NGC is 
in a position to receive first natural gas.

·      We safely reached budgeted total depth of our Royston-1X sidetrack well on
the Ortoire block on February 24, 2023. The well has been cased, and we expect to
commence production testing in late March 2023.

·      In January 2023, we entered into an asset exchange agreement for certain 
onshore Trinidad assets with a privately held Trinidadian entity. Pursuant to the
agreement, we agreed to swap our operated 100 percent 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 East Deep Horizons blocks for no cash consideration
with the asset exchange 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 licence.

Share on: