(Sharecast News) - Touchstone Exploration announced the completion of its five-phase production testing at the Royston-1X well on Thursday.
The AIM-traded firm said it was currently focusing on the topmost intervals of the Herrera and Karamat formations.
It said the Royston-1X well, on the Ortoire block in Trinidad and Tobago, was temporarily closed, pending a service rig's arrival for more advanced testing.
Among the significant discoveries during the testing, the deepest oil located on the Ortoire block was found at a depth between 11,102 and 11,168 feet, registering an oil gravity between 34.1 to 40.0 degrees API.
However, the low permeability reservoir indicated limited natural oil flow to the surface.
Touchstone also disclosed tests on other sections of the Herrera Formation, revealing light, sweet oil and distinct oil gravities.
Though high reservoir pressures were recorded during the tests, the oil flow was minimal due to low permeability.
The company now planned to comingle the three highest prospective intervals, and anticipated increased fluid production rates post pumping.
Touchstone said the Cascadura facility, designed for peak production capacities of roughly 200 million cubic feet and 5,000 barrels per day of connected liquids, was meanwhile now in its final stages of commissioning.
The company said it was using natural gas from the Cascadura-1ST1 well for the preliminary systems start-up and machinery testing.
It said complete commissioning would then see the integration of gas and liquids from the Cascadura-1ST1 and Cascadura Deep-1 wells.
The Coho facility meanwhile began commercial production in October last year, and had since produced an impressive two billion cubic feet of total gross natural gas, resulting in over $4m in gross sales.
Touchstone said the facility boasted 99.9% uptime, with minor downtimes due to third-party processing challenges.
Recent testing suggested optimisation opportunities by adjusting the producing reservoir intervals, which would be pursued after Cascadura's initiation.
Moreover, Touchstone said it had received the green light to drill two more wells at the existing Coho location, aiming to maximise its operating capacity to around 24 million cubic feet of natural gas per day.
"Testing of the Royston-1X well was undertaken in a methodical manner to provide a comprehensive evaluation of the prospect," said president and chief executive officer Paul Baay.
"The flow and buildup tests for each interval has provided us with information that could be used for future stimulation of the well to optimise recovery and production rates.
"The fact that we have recovered light oil and significant pressures on each test is encouraging."
Baay said the company now needed to evaluate the mechanics of how to produce the well at economically sustainable rates.
"By putting the well to pump for an extended period, we will be able to determine both the economics and viability of future operations, which could include artificial stimulation of the reservoir.
"Looking forward to the commencement of commercial production from the Cascadura facility, we now have in place the infrastructure to process and monetize all future potential drilling successes on the Ortoire block.
"This has been a long process, but we have now put in place the building blocks for a fully funded, full-cycle exploration and production strategy."
At 1522 BST, shares in Touchstone Exploration were down 12.38% at 66.59p.
Reporting by Josh White for Sharecast.com.
Touchstone Exploration (TXP)