Touchstone Exploration (LON:TXP) has reported encouraging drilling results and improving production reliability across its Trinidad operations, strengthening the company’s prospects for additional oil and gas production.
The latest research note from Cavendish, dated 30 October 2026, highlights positive developments at the CR-3 Karamat well, promising initial production from the WD-4 drilling programme and improving performance at the Cascadura gas facilities.
Research analysts James McCormack and James Midgley maintain a Buy recommendation and 26.4p share price target, representing potential upside of 140% against the 11p share price quoted in the research note.
With several operational developments expected over the coming months, Touchstone enters the final quarter of 2026 with improving momentum and multiple potential opportunities to increase production.
CR-3 Karamat Well Delivers Encouraging Gas Results
One of the most important developments highlighted by Cavendish is the successful initial testing of the CR-3 Karamat completion.
The well delivered preliminary average gross gas production rates of 5.0 million cubic feet per day and 6.8 million cubic feet per day during extended testing at different choke settings.
Encouragingly, testing identified minimal condensate and no formation water at the time of the company’s operational update.
CR-3 is already connected to the Central block processing facility and exporting gas into sales.
This represents an important development because CR-3 is Touchstone’s first well specifically targeting the Karamat reservoir within the Central block, where the company holds a 65% working interest.
The Karamat formation is also present at Carapal, Baraka and Baraka East.
Subject to additional testing and geological evaluation, this could provide further development opportunities alongside the company’s existing Herrera reservoir programme.
Although sustained commercial production rates still need to be established, the early results suggest that Karamat could become another source of future production.
WD-4 Drilling Programme Adds Oil Production Potential
Touchstone has also delivered encouraging initial results from PS-623, the first well in its two-well WD-4 drilling programme.
The well encountered approximately 450 feet of potential net hydrocarbon pay and was brought into production at an initial field-estimated flush rate of 387 barrels of oil per day.
Water represented just 1% of production during the first 24 hours.
While initial flush production rates are not necessarily representative of longer-term output, the results provide an encouraging starting point for the development programme.
Touchstone holds a 100% working interest in WD-4, giving the company full exposure to the project’s potential production and economics.
The drilling rig has also been mobilised to the second WD-4 well, which was expected to begin drilling shortly after the operational update.
Importantly, Cavendish notes that the turnkey drilling costs are covered by the drilling contractor, limiting Touchstone’s capital exposure to the programme.
Cascadura Gas Production Continues to Improve
Another positive development is the improving operational reliability at Cascadura, one of Touchstone’s important gas-producing assets.
Following earlier operational challenges, the booster-compressor system achieved approximately 98% availability during September 2026.
This improvement supported a steady increase in average gross Cascadura gas production throughout the third quarter.
Key Cascadura operational highlights include:
- July 2026: Average gross gas production of 9.7 million cubic feet per day.
- August 2026: Production increased to 12.5 million cubic feet per day.
- September 2026: Production reached 13.0 million cubic feet per day.
- September compressor availability: Approximately 98%.
- Planned workovers: Cascadura-3ST1, Cascadura-5 and Cascadura Deep-1.
- Additional planned work: A separate Baraka-1 workover on the Central block.
The improving performance is particularly encouraging because higher equipment availability can help Touchstone maximise production from its existing infrastructure.
Further workovers planned before the end of 2026 could offer additional opportunities to optimise production, although their results remain uncertain.
Cavendish Highlights Improving Operational Momentum
In the latest research note, Cavendish analysts James McCormack and James Midgley take a positive view of the company’s operational progress.
The analysts write:
“We view this morning’s operational update positively, with Touchstone reporting encouraging initial results from both the CR-3 Karamat completion and the first WD-4 development well, alongside improving production reliability at Cascadura.”
This assessment reflects the combination of new well results and improvements in existing production facilities.
Touchstone’s third-quarter 2026 sales volumes averaged 4,485 barrels of oil equivalent per day, compared with 4,433 barrels of oil equivalent per day in the second quarter.
Although the quarterly increase was relatively modest, the improving performance during the period suggests a stronger operational position heading into the final months of the year.
The broker identifies stabilised production rates from CR-3 and PS-623, the second WD-4 well and the planned Cascadura and Baraka workovers as important near-term developments to monitor.
Financial Forecasts Point Towards Potential Earnings Growth
Alongside the operational update, Cavendish provides financial forecasts indicating potential growth in revenue and earnings over the coming financial years.
Key financial estimates from Cavendish include:
- FY2025 revenue: $34.8 million.
- FY2026 forecast revenue: $52.5 million.
- FY2027 forecast revenue: $80.6 million.
- FY2025 adjusted EBITDA: $11.4 million.
- FY2026 forecast adjusted EBITDA: $24.1 million.
- FY2027 forecast adjusted EBITDA: $54.0 million.
- FY2026 forecast adjusted pre-tax profit: $6.0 million.
- FY2027 forecast adjusted pre-tax profit: $33.8 million.
- FY2026 forecast adjusted earnings per share: 3.7 US cents.
- FY2027 forecast adjusted earnings per share: 8.9 US cents.
These estimates suggest that Cavendish anticipates a substantial improvement in Touchstone’s financial performance as production develops.
However, the broker states that it intends to update its forecasts and valuation following the release of the company’s third-quarter results.
The estimates should therefore be considered forecasts rather than guaranteed outcomes.
Cavendish Maintains 26.4p Share Price Target
Cavendish maintains its Buy recommendation and 26.4p target price for Touchstone Exploration.
Against the 11p share price recorded in the research note, this represents potential upside of approximately 140%.
The valuation reflects the broker’s assessment of Touchstone’s production assets and future earnings prospects.
The research note also records a market capitalisation of approximately £48.5 million and net debt of £39.6 million.
This debt position is an important factor for investors, as successful production growth and improved cash generation will be necessary to support the company’s financial position.
Nevertheless, the encouraging initial drilling results and improving Cascadura performance provide several potential catalysts for the business.
What Comes Next for Touchstone Exploration?
The next stage of Touchstone’s development will focus on converting its encouraging operational results into sustainable production.
In particular, investors will be watching for stabilised output from the CR-3 Karamat and PS-623 wells.
Results from the second WD-4 well will also be important, alongside the planned workovers at Cascadura and Baraka.
If these activities deliver positive results, they could provide additional production opportunities while improving the utilisation of existing facilities.
The potential extension of Karamat development into other areas of the Central block offers a further longer-term opportunity, although additional geological evaluation will be required.
Final Thoughts
Touchstone Exploration’s latest operational update provides several encouraging signs for the company’s oil and gas activities in Trinidad.
The CR-3 Karamat completion has demonstrated promising initial gas production, PS-623 has delivered positive early oil production results, and Cascadura’s improved compressor reliability is supporting stronger gas output.
Together, these developments suggest that Touchstone is entering the final quarter of 2026 with a broader range of potential production growth opportunities.
Cavendish’s Buy recommendation and 26.4p target price reflect the broker’s positive view of the company’s prospects, although sustained well performance, successful development activity and debt management remain important considerations.
For Touchstone, the key opportunity now lies in translating these encouraging early results into reliable production, stronger cash generation and improved financial performance.
