# Touchstone Exploration reports 30% revenue growth as October production reaches 5,020 boe/d

- Link: https://www.directorstalkinterviews.com/touchstone-exploration-reports-30-revenue-growth-as-october-production-reaches-5020-boed/4121269690
- Published: 2026-11-13T07:03:00+00:00
- Author: Amilia Stone

**[Touchstone Exploration](https://www.directorstalkinterviews.com/company/touchstone-exploration-inc/txp.l)
Inc. **([LON:TXP](https://www.directorstalkinterviews.com/company/touchstone-exploration-inc/txp.l))
has reported its financial and operating results for the three and nine months ended
September 30, 2026.

Selected financial information is outlined below and should be read in conjunction
with Touchstone’s September 30, 2026 unaudited interim condensed consolidated financial
statements and related Management’s discussion and analysis, both of which are available
on the Company’s profile on SEDAR+ (www.sedarplus.ca) and 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. Field-estimated volumes are 
based on field measurements and may differ from final sales volumes.

**Third Quarter 2026 Financial and Operating Highlights**

 * **Production:** Averaged 4,485 boe/d in the third quarter of 2026, a 1% increase
   from 4,433 boe/d in the second quarter of 2026, primarily due to the completion
   of the Cascadura facility compression project. Third-quarter production decreased
   13% from 5,142 boe/d in the third quarter of 2025, primarily reflecting planned
   compressor maintenance and a well shut-in on the Central block, as well as lower
   crude oil volumes. Reported sales volumes were reduced by a 9,465-barrel (approximately
   103 bbls/d) increase in crude oil inventory during the quarter, the majority 
   of which was sold in October 2026.
 * **Revenue and realized commodity pricing:** Petroleum and natural gas sales totalled
   $16.46 million, a 30% increase from the $12.70 million recorded in the third 
   quarter of 2025. The increase reflected a 49% increase in realized commodity 
   price per boe, partially offset by a 13% decrease in sales volumes.

–          **Crude oil sales:** $5.73 million from average production of 837 bbls/
d at an average realized price of $74.33 per barrel.

–          **NGL sales:** $1.80 million from average production of 422 bbls/d at
an average realized price of $46.35 per barrel.

–          **Natural gas sales:** $8.94 million from average production of 19.4 
MMcf/d (3,226 boe/d) at an average realized price of $5.02 per Mcf. Central block
natural gas realized an estimated average price of $7.81 per Mcf, compared to $2.58
per Mcf for Ortoire block natural gas sold under the Company’s fixed-price contract.
Central block volumes were sold under the Atlantic LNG Train 2/3 gas supply contract
in July 2026 during Train 4 downtime.

 * **Operating netback:** Generated $22.58 per boe, an 82% increase from $12.38 
   per boe in the third quarter of 2025, primarily driven by higher realized prices
   across all products, partially offset by higher royalty expenses.
 * **Funds flow from operations:** Increased to $5.37 million from $0.74 million
   in the third quarter of 2025, primarily driven by a $3.46 million increase in
   operating netback and lower general and administrative and current income tax
   expenses.
 * **Net income:** Recorded net income of $0.08 million ($0.00 per basic and diluted
   share), compared to a net loss of $2.06 million ($0.01 per basic and diluted 
   share) in the third quarter of 2025. The $2.14 million improvement primarily 
   reflected a $4.64 million increase in funds flow from operations, partially offset
   by $2.50 million in non-cash items, primarily deferred income tax expense and
   the convertible debenture revaluation loss.
 * **Capital expenditures**: Invested $1.76 million in the third quarter of 2026,
   primarily directed toward drilling the PS-623 crude oil development well, which
   was completed and brought on production in October 2026.
 * **Net debt and deleveraging:** Reduced net debt by 17% from the prior quarter
   to $57.34 million at September 30, 2026. This reflected $3.55 million in bank
   debt principal repayments funded from operating cash flow and the repayment of
   the $8.4 million debenture issued in the June 2026 integrated financing, with
   the proceeds resubscribed for common shares, which eliminated the debenture obligation.

**Post Period-end Highlights**

 * **CR-3 Karamat completion:** Following isochronal well testing operations, downhole
   pressure gauges were installed for a pressure buildup test and additional flow
   test. After a five-day pressure buildup test, wellhead pressures built to approximately
   1,600 psi and were still building. The well was then opened for an additional
   well test at different choke settings. Over the previous two-day period, the 
   well was producing at an average gross natural gas rate of approximately 2.3 
   MMcf/d on a 90 percent open choke with a wellhead flowing pressure of 300 psi.
   CR-3 will undergo another brief pressure buildup test and will then be placed
   on permanent production to the facility. Downhole pressure recorders are expected
   to be retrieved at the end of November for future evaluation and analysis.
 * **WD-4 drilling:** The first well in the Company’s two-well WD-4 block development
   drilling campaign, PS-623, which was spud in the third quarter, reached total
   depth on October 4, 2026. The well has been completed and placed onstream at 
   an average field-estimated production rate of approximately 290 bbls/d of crude
   oil over its first 16 days of production. The second well was spud on October
   29, 2026.
 * **Production Update:** Field-estimated production for October 2026 averaged 5,020
   boe/d, comprised of 20.3 MMcf/d of net natural gas production (3,377 boe/d) and
   1,643 bbls/d of net crude oil and liquids production.

**Third Quarter 2026 Financial and Operational Results Overview**

|   | **Three months ended September 30,** | % change | **Nine months ended September 30,** | % change | 
| **2026** | 2025 | **2026** | 2025 | 
|   | ** ** | ** ** |   | ** ** | ** ** |   | 
| **Operational** | ** ** | ** ** |   | ** ** | ** ** |   | 
|   | ** ** | ** ** |   | ** ** | ** ** |   | 
| Average daily production | ** ** |   |   | ** ** |   |   | 
| Crude oil^((1)) _(bbls/d)_ | **837** | 1,051 | (20) | **932** | 1,118 | (17) | 
| NGLs^((1)) _(bbls/d)_ | **422** | 436 | (3) | **438** | 230 | 91 | 
| Crude oil and liquids^((1)) _(bbls/d)_ | **1,259** | 1,487 | (15) | **1,370** | 1,348 | 2 | 
| Natural gas^((1)) _(Mcf/d)_ | **19,354** | 21,926 | (12) | **18,926** | 19,647 | (4) | 
| Average daily production _(boe/d)_^((2)) | **4,485** | 5,142 | (13) | **4,524** | 4,622 | (2) | 
|   | ** ** |   |   | ** ** |   |   | 
| Production mix _(% of production)_ | ** ** |   |   | ** ** |   |   | 
| Crude oil ^()and liquids^((1)) | **28** | 29 |   | **30** | 29 |   | 
| Natural gas^((1)) | **72** | 71 |   | **70** | 71 |   | 
|   | ** ** |   |   | ** ** |   |   | 
| Average realized prices^((3)) | ** ** |   |   | ** ** |   |   | 
| Crude oil^((1)) _($/bbl)_ | **74.33** | 60.30 | 23 | **74.75** | 60.92 | 23 | 
| NGLs^((1)) _($/bbl)_ | **46.35** | 33.41 | 39 | **43.95** | 35.71 | 23 | 
| Crude oil and liquids^((1)) _($/bbl)_ | **64.95** | 52.42 | 24 | **64.91** | 56.62 | 15 | 
| Natural gas^((1)) _($/Mcf)_ | **5.02** | 2.74 | 83 | **4.29** | 2.61 | 64 | 
| Realized commodity price _($/boe)_^((2)) | **39.89** | 26.84 | 49 | **37.62** | 27.59 | 36 | 
|   | ** ** |   |   | ** ** |   |   | 
| Operating netback _($/boe)_^((2)(3)) | ** ** |   |   | ** ** |   |   | 
| Realized commodity price | **39.89** | 26.84 | 49 | **37.62** | 27.59 | 36 | 
| Royalty expense | **(8.82)** | (6.00) | 47 | **(8.86)** | (6.58) | 35 | 
| Operating expense | **(8.49)** | (8.46) | – | **(8.60)** | (7.50) | 15 | 
| Operating netback | **22.58** | 12.38 | 82 | **20.16** | 13.51 | 49 | 
|   | ** ** |   |   | ** ** |   |   | 
| **Financial** | ** ** |   |   | ** ** |   |   | 
| _($000’s except per share amounts)_ | ** ** |   |   | ** ** |   |   | 
|   | ** ** |   |   | ** ** |   |   | 
| Petroleum and natural gas sales | **16,460** | 12,696 | 30 | **46,469** | 34,816 | 33 | 
|   | ** ** |   |   | ** ** |   |   | 
| Petroleum and natural gas sales, net of royalties | **12,820** | 9,859 | 30 | **35,530** | 26,508 | 34 | 
|   | ** ** |   |   | ** ** |   |   | 
| Cash from operating activities | **5,933** | 4,850 | 22 | **13,959** | 10,227 | 36 | 
|   | ** ** |   |   | ** ** |   |   | 
| Funds flow from operations | **5,372** | 735 | n/m | **14,348** | 4,748 | n/m | 
|   | ** ** |   |   | ** ** |   |   | 
| Net income (loss) | **77** | (2,064) | n/a | **41** | (2,733) | n/a | 
| Per share – basic and diluted | **0.00** | (0.01) | n/a | **0.00** | (0.01) | n/a | 
|   | ** ** |   |   | ** ** |   |   | 
| Capital expenditures^((3)) | **1,756** | 9,602 | (82) | **6,495** | 20,934 | (69) | 
| Acquisition expenditures | **–** | – | n/a | **–** | 28,400 | (100) | 
| Cash used in investing activities | **(3,190)** | (7,712) | (59) | **(15,964)** | (42,486) | (62) | 
|   | ** ** |   |   | ** ** |   |   | 
| Principal balance of bank debt | ** ** |   |   | **48,518** | 59,875 | (19) | 
| Principal balance of convertible debenture | ** ** |   |   | **12,500** | 12,500 | – | 
| Net debt^((3)) | ** ** |   |   | **57,344** | 77,753 | (26) | 
|   | ** ** |   |   | ** ** |   |   | 
| **Share Information** _(000’s)_ | ** ** |   |   | ** ** |   |   | 
| Weighted avg. shares outstanding: | ** ** |   |   | ** ** |   |   | 
| Basic and diluted | **418,689** | 261,097 | 60 | **358,445** | 248,914 | 44 | 
| Outstanding shares – end of period | ** ** |   |   | **441,130** | 261,097 | 69 |

Notes:

 1.       Refer to “_Advisories –_ _Product Type Disclosures_“.
 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_“.
 3.       Specified or supplementary financial measure. Refer to “_Advisories – Non-
    GAAP and Other Financial Measures_“.

**Liquidity Update**

As at September 30, 2026, the Company reported a working capital deficit of $20.1
million (June 30, 2026 – $28.7 million). The decrease primarily reflected the settlement
of the $8.4 million debenture issued in the June 2026 integrated financing through
the issuance of common shares in July 2026. The working capital deficit included
the $11.1 million carrying value of the convertible debenture maturing in August
2028, which is classified as a current liability solely due to the holder’s conversion
rights; any conversion would be settled in common shares. Excluding the convertible
debenture, the adjusted working capital deficit was $9.0 million (June 30, 2026 –
$18.4 million). As at September 30, 2026, the Company had cash of $8.1 million (
June 30, 2026 – $9.2 million) and long-term bank debt principal of $35.8 million(
June 30, 2026 – $37.9 million), with its revolving credit facility fully drawn.

Management continues to execute initiatives to strengthen the Company’s financial
position and capital structure. Year-to-date accomplishments include closing the
June 2026 integrated financing that generated net proceeds of $10.2 million and 
realizing improved operating cash flows driven by higher commodity prices and stable
production.

Touchstone has scheduled bank debt principal repayments of approximately $12.7 million
over the next 12 months and continues to pursue recovery of approximately $12.0 
million in outstanding value added tax (“VAT”) receivables. The Company also has
estimated minimum contractual payments of approximately $13.1 million due during
the remainder of 2026, of which approximately $11.2 million relates to the Ortoire
exploration commitment and the Balata East development well obligation, which the
Company is seeking to defer.

As detailed in the Company’s September 30, 2026 unaudited interim condensed consolidated
financial statements and accompanying Management’s discussion and analysis, management’s
cash flow projections remain tied to prevailing commodity prices, field production
performance, and the timing of capital programs, including certain discretionary
development capital. Adverse movements in commodity prices, operational disruptions
or delays in development activities, VAT recovery or work commitment restructuring
could negatively affect the Company’s ability to meet its debt obligations and other
contractual commitments as they come due. Consequently, the interim financial statements
include a note disclosure regarding a material uncertainty that may cast significant
doubt upon the Company’s ability to continue as a going concern.

Touchstone remains focused on maintaining operational momentum, optimizing its cost
structure, sustaining production levels, recovering VAT balances, and working constructively
with its existing lenders to maintain appropriate liquidity over the next twelve
months and beyond.

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