Touchstone Exploration ramping up production at Cascadura (LON:TXP)

Touchstone Exploration

Touchstone Exploration plc (LON:TXP) Chief Executive Officer Paul Baay caught up with DirectorsTalk for an exclusive interview to discuss the completion of the EIA, the production timeline at Cascadura, pre-commissioning and commissioning at Coho and the support from the Trinidad government.

Q1: Paul, you announced this morning that the Environmental Management Authority have confirmed that the environmental impact assessment is complete, which is great news. Could you just explain for us though what this means for the Cascadura well?

A1: I think it’s really significant for Touchstone Exploration, it’s something we’ve been waiting for a long time and what it is, it’s basically the environmental permit for us to proceed with the project. It’s been something we’ve been working on for about a year.

It’s a really thorough project but what it’ll do is it outline for us the next five years of operations that we can operate under out there so although it’s been painful to get us to this point, it allows us to drill wells, it allows us to build our gas facility, it allows us to build roads and pipelines. So, now we can really lay out a really firm and clear plan for the next five years so as I say, it’s been a very thorough and time consuming process but really happy to finally get across the line.

Q2: Do you expect there to be any effects on production timeline at Cascadura because of the delays with the EIA?

A2: It’s definitely been delayed and we’ve been pushing forward on two fronts. We’ve been continuing to fabricate various things that we could without actually going on the site. So, we’re still hopeful that we’ll have production on between now and the end of the year and it’ll really depend on how quickly we can move and how good the weather is between now and then but everything’s going to push forward as fast we can.

So, the next couple of weeks we’ll firm that timeline up, as I say, we just got this information on Friday, but the plan right now is it may push things by a couple of months but it’s not going to push us into 2023.

Q3: Now, last week you announced that pre-commissioning and commissioning is starting at Coho. Can you just talk us through the process?

A3: So, that process is really one of the facilities now completely done and so is the pipeline so what we’ll do is we go through a set of safety checks, we’ll pressure the system up then we’ll start to introduce gas from the Coho well, that’ll go through again, various different stages of testing. When that’s done, we’ll ramp that up into production.

I’m actually in Trinidad this week, not that I’m going to be the one to oversee that project, that’s not my expertise, but really hopeful that before I leave here next week, that we’re starting to see gas flow going through that facility.

So, that’ll be the first new onshore gas in 20 years that’s come on in Trinidad so a big deal for us, but also big deal for the country.

Q4: So, following the pre-commissioning and the commissioning, what’s next for Coho?

A4: The facility there is built for about 20 million cubic feet a day, we think the initial well should be pretty comfortable around 8-10 million cubic feet a day so we’ll line that out for a little while. We then do have an approval to drill a second well there so we’ll look at getting back in there at some point and drill the second well.

Before that, I think once we get things rolling here, the rig will probably move over to Royston, do the side-track at Royston and then what we really want to do is ramp up production at Cascadura. With that new permit, it’ll allow us to drill and update more wells, I don’t think we’ll need that many to fill the facility, we’ll go over and drill enough wells to fill that up, get it up to about 200 million a day in 2023, and then we’ll look at Coho after that.

Q5: How does the Trinidad government view the announced production from the Ortoire block? Are they supportive?

A5: They are very supportive. I think there’s been a lot of concern, this EIA has taken much longer than certainly we anticipated and I think a lot of people questioned the authenticity of the Trinidad government but in fairness, this is the first new gas brought on in 20 years and we are talking about a facility that’s 200 million cubic feet a day.

So, we had to go through the process to make sure that all the public consultation was done, all the design was correct and so we worked in conjunction with them.

They’re really excited to get this on and we’re going to do it as quick as we can. It also provides a lot of jobs, both once the plant’s up and running but also, Touchstone Exploration will be using all local contractors for all the construction here so it’s going to be a pretty good employer over the next couple of six months.

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