Touchstone Exploration reports another year of significant progress

Touchstone Exploration

Touchstone Exploration Inc. (TSX, LON:TXP) has reported its operating and financial results for the three months and year ended December 31st, 2020. Selected information is outlined below and should be read in conjunction with Touchstone’s December 31st, 2020 audited consolidated financial statements, the related Management’s discussion and analysis and Annual Information Form, all of which will be available under the Company’s profile on SEDAR ( and the Company’s website ( Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.

2020 Highlights

·      Achieved annual crude oil sales of 1,392 barrels per day (“bbls/d”), a 24 percent decrease relative to the 1,825 bbls/d produced in 2019. As expected and consistent with 2019, our crude oil production has reduced due to the ongoing impact of natural declines, reflecting a strategic focus on our Ortoire exploration program which has limited development capital investment.

·      Executed a high impact, incident free $17,861,000 exploration program, primarily focused on drilling two gross (1.6 net) wells.

·      Despite limited capital and operational development asset investment and considerably lower crude oil pricing, generated funds flow from operations of $263,000 (2019 – $6,840,000) and an operating netback of $14.49 per barrel (2019 – $26.61).

·      Continued to focus on discretionary cost reductions, with operating costs on a per barrel basis decreasing by 12 percent and general and administration expenses declining by 6 percent relative to 2019.

·      Recognized a net loss of $11,030,000 ($0.06 per share) compared to a net loss of $5,620,000 ($0.04 per share) in 2019, driven by $11,418,000 in net impairment losses recorded in the year predominantly based on lower forecasted crude oil pricing.

·      Established a $20 million term loan with a Trinidad based financial institution and successfully accessed capital markets to continue our Ortoire exploration program, raising total net proceeds of $39.2 million from two oversubscribed equity financings.

·      Maintained financial flexibility, exiting the year with cash of $24,281,000, a working capital balance of $12,933,000 and $7,500,000 drawn on our $20 million term credit facility, resulting in a net surplus of $5,433,000.

·      Business continuity plans remain effective across our locations in response to COVID-19 with minimal health and safety impacts or disruptions to production.

Paul Baay, Touchstone Exploration President and Chief Executive Officer, commented:

“2020 presented significant challenges to the wider oil and gas industry due to the impact of COVID-19 on working operations and the volatile nature of global oil prices. It is against that backdrop that I am delighted to report another year of significant progress at Touchstone in which we have enhanced our financial position significantly, encountered major natural gas discoveries as well as signed a historic long-term natural gas sales agreement with the National Gas Company of Trinidad and Tobago.

I would like to thank the entire team at Touchstone for their dedication, perseverance and flexibility during this difficult period which has enabled us to achieve such success. As a result of their hard work, the Company is very well positioned for another year of growth as we move forward with our exploration, development and production program at Ortoire and across the wider portfolio.”

2020 Annual Summary and Outlook

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The resilience and quality of our employees and asset base were demonstrated throughout an extremely challenging operational and financial period in 2020. The impacts on our business due to COVID-19 and the associated volatility in crude oil prices forced prompt decisions to preserve financial flexibility and protect the health of our employees and stakeholders. We remain focused on protecting the health of our employees and communities while ensuring a decisive response for our investors. We will continue to follow the advice of public health officials in supporting our employees, their families, and our business partners.

Despite these challenges, Touchstone continued with its focus on improving financial liquidity, capturing cost savings, and increasing the long-term value of our core assets. We managed our business prudently during the year, progressing with our Ortoire exploration program and maintaining our base production while continuing safe and reliable operations.

The enhanced liquidity provided from our debt refinancing and our 2020 equity financings are expected to allow us to fund our exploration program in 2021, with a core focus on drilling our final work commitment exploration well (Royston-1), completing our 2D seismic program, testing our two exploration wells drilled in 2020, and bringing our Coho-1 and Cascadura-1ST1 discoveries onto production in 2021.

Our primary objective remains to bring our two natural gas exploration discoveries at Ortoire onto production in 2021. Additionally, production testing operations are ongoing at our Chinook-1 and Cascadura Deep-1 prospects, and we anticipate drilling our Royston-1 location in the second quarter of 2021. As the current economic and health related challenges persist, we will continue to adapt our business operations and capital programs to ensure health and safety and enhance long-term shareholder value.

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Touchstone Exploration Inc

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