Touchstone Exploration Share Price (TXP)

SimonT, Thanks for sharing, although, having read through it several times, I have concluded that it does not really bring any new information to the fore. What is missing is Malcy's sp prediction, not least given that his last promulgation was a target of 200p. The absence of this from his statement suggest that he is backing off this optimistic number.

Continued;

These plays, along with some of the newer blocks yet to be in the portfolio, gives TXP great opportunities in the longer term and in my view give a very rounded valuation for the company and where the shortest of term worries about production should be put firmly in context. A solid banker for the new Bucket list.

I met with Paul Baay, CEO and James Shipka, COO this week as they were in London meeting investors. They kindly gave me a couple of hours of their time, they knew that I was keen for an update and that I had a few questions from Blog readers to ask them and nothing was off limits.

TXP achieved Q1 production of 33,521 Mcf/d plus some liquids giving 7,015 boe/d against the facility capacity of 21,250 boe/d so scope for an increase which is where most of my questions had appeared. It is however a significant y/y increase in production and that fed through to an increase in operating netbacks and cash flow.

This created sufficient cash flow for an ambitious drilling campaign and further investment in Cascadura where a large number of locations have been identified and are already being drilled. The company is now a leading presence in Trinidad and its portfolio ensures a good long term supply of opportunities for the company.

Cascadura coming onstream in September added to the legacy production and that of Coho which had also recently got underway. The wells that initially came onstream have indeed showed a bigger initial decline than originally expected although payback is still excellent and of course reserves are not affected. What it does do is mean that the company might drill as many as 10 wells against the projected 6.

The wells in question that saw the decline have already flattened out and with such porosities and fractures exhibited a likeness to matrix formations and against expectations of 7/- b/d achieved 6/- b/d. But the good news is that having drilled these wells already they will have been drilled and thus coming on production in Q3.

I found that the map of the Cascadura development was fascinating as the CAS-2 and CAS-3 wells have been drilled further away from the facility and will pipe the hydrocarbons back to the facility. The advantage here is that they save $2m to test the wells, now they can spend that money on the pipeline and test when putting the hydrocarbons in and of course in Q3.

As for CAS-4 it will drill away from the 2 and 3 wells and head towards the Rio Claro block and the fault where 900′ of sand has been spotted and with pay likely on the other side of the fault as well could significantly add to reserves. This makes for good news and whilst the wells have not delivered quite as quickly as expected underlying value has not been affected.

Going forward, with its finances in good order TXP has a fully funded production and development programme in what is an asset portfolio laden with opportunities. The company has been working away behind the scenes getting away from the smaller, lower value ends of the portfolio and looking at new, added value and bigger plays in asset swaps and deals with the Government. Some of these have been previously drilled by the majors and some are considered to be adjacent to the play with significant success in Guyana.

Let's just see now...

I had an order that didn't fill. So no supply. Owners hold. At least they're not cheap. I hope they'll do the same in London.