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“Touchstone’s chief executive, Paul Bay, says direct sales to NGC will keep prices at least at the level forecast in the reserves evaluation...The company is confident of getting the Cascadura project into production in mid-2021,” according to Investors Chronicle.

The publication added: “Touchstone is at a mid-point of the ideal evolution from explorer to gas producer. It has its reserves and its buyer in the NGC. The NGC is also building most of the infrastructure needed to get the gas from the Cascadura into its network, cutting development costs. The island has the major Atlantic LNG gas processor, but Touchstone is skipping that by handing product straight to NGC.”

Touchstone, meanwhile, released its second-quarter results last week confirming average daily crude oil production of 1,396 barrels per day, compared to 1,589 barrels per day in the preceding quarter and 1,768 barrels in the second quarter of 2019.

The company noted that it saw an operating netback of US$10.73 per barrel despite realised price reductions.

It said that meaningful cost reductions were achieved, with operating costs down 28 per cent.

Financially, the company reported a US$2.74 million net loss, narrowed from the US$9.24 million it lost in the preceding quarter.

Touchstone said that it had enhanced its financial flexibility and reduced its overall cost of borrowing, by refinancing long-term debt, withdrawing US$15 million of a new US$20 million facility to repay a prior C$20 million Canadian loan.

It exited the quarter with some US$6.89 million of cash, and had US$8.46 million of net debt.

For those without an account with Trinidad Express 1/2
CANADIAN oil and gas company, Touchstone Exploration says it has started drilling the highly anticipated Chinook-1 well, its latest exploration test within the Ortoire block, in south Trinidad.

The news came as the company posted its second-quarter operational update and financial results, which revealed the driller received US$2.8 million in bonds from the T&T Government for past due value-added tax arrears. Touchstone disclosed that it sold the bonds to a financial institution after the end of its second quarter.

The Chinook-1 well is targeting hydrocarbon prospects in the Herrera formation, the same horizon found in the successful Coho and Cascadura discoveries.

In March, Touchstone Exploration announced test results from the Cascadura-1AT1 onshore well, which reported an average flow from the well in the Ortoire block of over 10,600 barrels per day (bbls/d).

At the time, Touchstone president and CEO Paul Baay said: “In addition to estimated production at our Coho discovery and our existing production, this well gives us a clear path to 10,000 boe/d with an estimated 75 per cent natural gas and 25 per cent liquids product mix.

Last week, commenting on the Chinook well, Baay said: “The spudding of the Chinook well marks the next phase of our Ortoire block exploration programme that has already delivered two successful natural gas wells in just over a year.

“The Chinook well is being drilled in proximity to the original 1959 well and will further evaluate the turbidite concept eastward from the original Coho discovery. With the assistance of a 3D seismic survey, we are now expecting to move up structure to target the Herrera sands.

“In addition to the initial work undertaken at Chinook, we have made progress across the Ortoire block, commissioning the previously announced Cascadura area independent reserves evaluation as well as commencing the Coho-1 tie-in project,” he added.

Elsewhere in the Ortoire block, the company is progressing with the tie-in of the Coho-1 gas well, with facilities construction and pipeline preparation underway.

Gas contract

In May, Touchstone said it had signed an agreement for the sale of natural gas and gas liquids produced from the Ortoire block in Trinidad and Tobago.

The framework agreement was with the National Gas Company (NGC) and Heritage Petroleum Company, both of which are companies wholly owned by T&T’s Corporation Sole, the entity that owns assets for the State.

Heritage and Touchstone are joint venture partners in the Ortoire block.

In the July 30 edition of the UK publication, Investors Chronicle, reported that Touchstone’s independent reserves evaluation forecast that the natural gas production from the Cascadura well would be sold at US$2.55 per million btu next year.

v*xm*rk*ts

AK interviewed on **********
****************************/articles/savannah-energy-and-xtract-resources-e3cab1b/

A meaningful announcement this morning from SAVE where a number of directors have bought stock. CEO Andrew Knot has led the way buying 9,239,454 shares at 7.5p and three non-exec directors and one spouse have also added to their holdings. It is also worth noting that there is a new corporate presentation out today on http://www.savannah-energy.com/

Briefly, as I commented on last week the news from Touchstone gets better and better and yesterday I was lucky enough to spend some time on the phone with TXP President and CEO, Paul Baay.

The value that I see in TXP is already stamped big time by the gas discoveries at Coho-1 and at Cascadura-1ST1 with significant liquids into the bargain and the fiscal advantage of gas in-country making it a double whammy.

The company has already spudded Chinook-1, another serious gas prospect with added prospects of also being liquids rich. The company, whilst being aware that 2 from 2 is a pretty good start in the Ortoire block remain very confident and have an extensive medium term drilling programme.

This includes up to 21 locations, they might include a second well at Chinook if successful, and a deeper well at Cascadura. The company is also considering hiring another rig for 2021 where it has exciting plans to drill two potential wells at Royston should opportunities permit.

Ortoire might have 1 TCF of gas and even if there is an inevitable disappointment with the drill bit, the gas and the associated liquids will make incoming funds flow very substantial indeed. Given that TXP has over 200 locations in both Ortoire and its existing conventional oil plays (currently being negotiated for permit extensions) the upside for the company is huge.

https://www.britishbulls.com/SignalPage.aspx?lang=en&Ticker=SAVE.L

Swindon- You also need to read page 87. The bonus's clearly relate to 2018 with the 2019 bonus decision deferred for a number of reasons including COVID 19.
2019/20 bonus awards
The Executive Director bonuses reported in the Company’s 2019 Annual Report reflect payments for management performance in 2018.These reflected a strong performing year for the Company in which, substantively all of our principal corporate KPIs were achieved or consciously superseded by positive events in relation to the negotiated changes to the Seven Energy acquisition announced in the year and which were detailed in our 2018 Annual Report.
Notable achievements in 2018 were the highly successful
Niger exploration drilling campaign, which saw five exploration discoveries from five exploration wells drilled, and the significant changes negotiated with various stakeholders in the Seven Energy Transaction. These changes transformed the nature
of the acquisition for Savannah and our shareholders and, in aggregate, secured control over Accugas and the Uquo gas
field (which was not originally envisioned in the deal), were demonstrably Net Present Value and cash flow accretive to the Group and resulted in the release of US$54 million of cash to the Company while also significantly increasing the upside exposure of our South East Nigerian gas business to rising gas volumes and prices. Further, working alongside the former Seven
Energy management team, significant business performance improvement planning was conducted, the benefits of which we expect to report in our 2020 Annual Report.
Due to strategic and tactical delays in the completion of the Seven Energy Transaction, which completed in November
2019, the financial performance of this acquisition and ability
for the Company to meet the associated business KPIs was not meaningfully reported in our 2019 Annual Report. The Board and management team made these amendments fully recognising that they would result in a delay to the completion
of the Transaction, having assessed and recognised that the material positives they represented significantly outweighed the negative impact of a delay to Transaction completion. As already reported in the post-period, the financial and operational performance of the business has been markedly improved
by management with both cash collections and production volumes having been increased by approximately 40% from H2 2017 to H1 2020. The Remuneration and Nomination Committee has therefore chosen to take the same approach for senior management remuneration as we adopted in the 2015 and 2016 Annual Reports, with the CEO and CFO total reward for the 2019 performance period having been rolled over and made available for grant in the 2020 performance year. Therefore, the aggregate 2019/20 performance will be reviewed by the Committee in 2020. We also believe that this approach is appropriate in light of the issues associated with the COVID-19 pandemic, oil price crash and general cha

Article this week

https://www.africaoilandpower.com/2020/08/11/a-land-of-opportunities/

Reading AK’s CEO’s 2019 Review he made the following comments.

“We have seen self-sustaining dividend paying companies as increasingly valued versus non-dividend payers’

“it’s important to stress that we have an extremely robust existing business with significant organic growth potential. We will also only pursue new venture opportunities to the extent they significantly enhance the unit value per share of our company and our ability to commence significant dividend payments to our shareholders”

His final paragraph above suggests he perceives SAVE will have the funds to grow organically, seize the right acquisition opportunities and pay a dividend.

A win/win scenario for the shareholders?

Unusual trading levels today?

NtoM- Assuming you are correct that we are in closed period until audited accounts are published, there is a danger that the half year accounts closed period will overlap the delayed annual accounts closed period. There is also the possibility that the BOD are in possession of price sensitive information. All of which could unfortunately delay executive buying.

LuckCounts
To quote Michael Winner “calm down dear”

At the AGM a month ago AK said that with the share price at 7p a buy back makes more sense than a dividend but he also said that there were no immediate plans to do so and would only review the distribution policy after the end of this year. He stressed the primary focus in 2020 was to maintain corporate liquidity to enable the company to enact its business plan. He also referenced this decision to conversations he's had with the II's. I doubt anything has changed that quickly.

Hopefully SAVE will not take advantage of the one month extension granted by LSE to file interims. As they do not need to notify the market until 30th September latest we may not know until later next month. I have asked IR if a decision has been made, but I am not holding my breath for the reply!
https://mccarthydenning.com/covid-19-listed-companies-the-fca-response/

"Somewhat disingenuous from Malcy?"
Technically he is correct in that the deferred revenue does unwind when the gas is eventually taken, but the unpaid invoice would form part of the Expected Credit Loss (ECL) under IFRS 9. Or as we oldies call it provision for bad debts.
Interestingly the only ECL recognised at the year end was USD 42.9m relating to pre acquisition debts based on historic performance. This ties in with AK's statement that debt collection has been much better post acquisition. It also suggests the debt problem relates to legacy debts and not to current trading. The ECL provision in the interim accounts will either prove or disprove AK's statement.

Thanks Dana I put a spread bet on EDH and KDNC at 8.00am based on your posts. I owe you a pint.

More good news from Touchstone today as the company announce an independent reserves evaluation of the Cascadura Assessment Area in the Ortoire block onshore Trinidad and Tobago. Gross Discovered Petroleum Initially-in-Place is between 241.2 Bcf at the low estimate through 398.5 Bcf in the best estimate and 571.5 Bcf in the high estimate.

This leads to net peak production of 10,266 boe/d in the 1P forecast, 15,108 boe/d in the 2P forecast and 22,600 boe/d in the 3P forecast. GLJ also give an NPV range from $287.7m at 1P through $519.2m at 2P and a massive $802.9m on a 3P basis.

Paul R. Baay, President and Chief Executive Officer, commented:

“We are delighted to report that the independent reserves report verifies the material size of the reserves yet to be produced in the Cascadura structure and provides the groundwork for a multi-year future onshore development program in Trinidad.”

The company has always had confidence in Ortoire and should be congratulated on bringing what is clearly a huge find in at such difficult times in the industry. If the numbers in the GLJ report are in any way accurate the shares are clearly extraordinarily cheap compared to today’s market cap of around £100m. With Trinidad being a hive of Hydrocarbon activity if the shares dont move up substantially they will surely be in someone elses cross-hairs before long.

From yesterday's Proactive Market View
Numis Securities exits oil & gas and mining sectors

Numis Securities has elected to withdraw from the oil & gas and mining sectors according to a statement by Savannah Energy today.

The withdrawal may reflect a lack of critical mass and expertise in the sector, high business overheads and a lack of commitment to the natural resources space in a firm that was founded on the rescue and recapitalisation of syndicates in the Lloyds insurance market and the media and retail sectors.

We suspect more firms will continue to cut costs in the oil & gas and mining sectors as increased regulation in recent years has effectively reduced commissions paid by investment funds to unsustainable levels in certain areas.

*the author formerly led Mining Research at Numis Securities

https://www.proactiveinvestors.co.uk/companies/news/924277/today-s-market-view-----amur-mineralanglo-asian-mining-bezant-resources-cardinal-resources-kodal-minerals-924277.html

Zen- Thanks as ever for all the detail. You are right David Jamison was co-founder and first Managing Director of Vitol. Perhaps a coincidence but as a SAVE NED he is probably well connected to help SAVE position itself as part of a consortium.
A placing at 7.5p would also be a nonsense, if SAVE pursue this deal with new debt/legacy cash receipts I hope it will not result in further Niger delays.