Touchstone Exploration Makes Strategic Acquisition from Shell Canaccord Comments 

Touchstone Exploration
[shareaholic app="share_buttons" id_name="post_below_content"]

Touchstone Exploration (LON:TXP) has announced a significant step forward with the acquisition of the Central Block licence from Shell. This deal, priced at $23 million in cash (subject to closing adjustments), includes a gas processing facility and is set to bring transformative benefits to the company. With an effective date of 1st January 2025, the acquisition is expected to close in the second quarter of 2025.

A Transformative Deal for Touchstone

The Central Block licence currently produces 18 million standard cubic feet per day (mmscf/d) of natural gas and 200 barrels per day (bbls/d) of natural gas liquids (NGLs) from four active wells. For Touchstone, this acquisition translates to an additional production of approximately 2,100 barrels of oil equivalent per day (boepd) net, 94% of which will be natural gas.

Notably, the facility in the Central Block has the capacity to process 80 mmscf/d of gas and is connected to both the domestic market and the Atlantic LNG export hub. The latter offers access to premium pricing, with natural gas prices reaching as high as $7.50 per mmscf, presenting a promising opportunity for Touchstone to significantly improve its average gas sales prices.

Phil Hallam, E&P Research Analyst at Canaccord Genuity, observed:
“This is a material deal and a needed positive move for Touchstone. The increased production, improved pricing contracts potential, and synergies with existing assets is hard to ignore; however, we do note that this will result in a further step up in the Company’s debt levels, and the deal is still subject to regulatory approval.”

Funding and Strategic Impact

The acquisition is expected to be financed through debt, with Touchstone actively negotiating with its Trinidad-based lender, Republic Bank, to secure the necessary funding. While the increase in debt adds a layer of complexity, the potential synergies between the Central Block and Touchstone’s existing Coho production assets could offset these challenges. Coho production, already tied into the Central Block facility, stands to benefit from higher-priced Atlantic LNG contracts.

In Closing

This acquisition signals a bold move for Touchstone Exploration, promising increased production, improved pricing opportunities, and operational synergies. While hurdles remain, including regulatory approval and finalising funding, the strategic benefits make this a compelling development for the company. As Phil Hallam aptly stated, this is indeed a “needed positive move” for Touchstone’s growth trajectory.

Investors and stakeholders will be watching closely as the company navigates the path to closing this transformational deal.

Share on:
Find more news, interviews, share price & company profile here for:

Touchstone Exploration launches £0.68 million retail offer at 11 pence per share

Touchstone Exploration has launched a retail offer to raise up to £0.68 million through the issue of up to 6.18 million new shares at 11 pence each via the BookBuild

Touchstone Exploration raises £6.32m in private placement to fund 2025 capital programme

Touchstone Exploration has conditionally raised £6.32 million through a private placement of 57.5 million new shares at 11 pence each. The Company may raise an additional £0.68 million via a

A shift in natural‑gas dynamics invites a fresh look at supply constraints

Rising LNG flows and slightly lower U.S. output are tightening the natural‑gas balance.

Trinidad and Tobago at an energy juncture

Deepwater discoveries and political momentum are reigniting investor interest in Trinidad and Tobago’s long-established energy sector.

Touchstone refines its focus with Cascadura advancing

Touchstone narrows its focus to Cascadura, exiting non-core assets to channel capital and energy into its most promising development.

Cascadura well positions Touchstone for added production

Touchstone advances its Cascadura programme, converting technical challenges into new production opportunities in Trinidad.

Search

Search