Member Info for Scott22

The flow test was limited (to about 5500) by the testing equipment. As I said I don't know how that impacts the reserves or the planned production rate, if at all. They did do pressure build up testing and maybe that is enough to accurately determine those items. Besides the Jan 14 video there is a separate 5-10 minute question answering session (for written questions submitted during that presentation) that was posted on pro-active site (and I think on you tube) about a week or so later. I will try to find that again. I think that the tests will be fine to tell us what is going on. At one time I thought they were going to use a different testing crew with different equipment but I might have been wrong. I know this crew was not available all of January because they were doing some testing for BP. But it might be the very same set up and crew that we used before. And that would be fine.

Ha ha. I understand the fetish to keep buying. I had a little dividend income in one account today and did not have a better idea than to add 100 shares of TXP at $2.37 US. Right now it is my highest conviction stock, which is funny after the huge run-up.

My story with TXP is a little different than most of the posters here. My first 1000 shares came Jan 11, 2013 as a spin off from a John Wright managed company which morphed from Petrobank (which had earlier shed petrominerales and Lightstream Resources (along the way buying tristar for way too much and having a foray into some less than successful heavy oil technology through Archon Technology subsidiary). Anyway none of that ended well and it was pretty much a wealth destroyer. Petrobank ended up spinning off Lightstream which then went bankrupt even though their cash flow was covering their debt (with John Wright landing on leadership team at the new now successful entity owned by others including him). They also spun off Petrominerales which I made some money on. And then the shell of Petrobank merged with Trinidad company to become Touchstone. That is why John Wright is still on board of directors today.

So my first 1000 shares from the spin off had a basis of $2.00. They promptly dropped by two/thirds and out of spite I added another 2000 for 70 cents in April 2014. That was my entire holding for a long time but I held the shares and followed the story out of nostalgia I guess. The story was actually pretty boring as they were drilling wells with 50-150 bopd production and having a hard time growing production. They also bid on (and won) a drilling concession on Ortoire Block in 2014 but did nothing with it for 5 years. The initial idea was to expand their search for small oil wells near the surface. But it turned out they were not doing nothing, they were studying the geology of the block, analyzing all the old wells drilled in the 1950's and earlier, coming up with some wild theories about turbidite sands on land. They would occasionally make a little reference to the block. And then in 2019 and especially 2000 the story started to get very interesting. The wild theories proved true sort of beyond imagination. And I started buying again and now it has become a fetish. Ha ha.

I really appreciate the contributions from the board and the coverage of the company in the London Financial Media in keeping on top of the story. And of course the work of Paul Baay and his team and their willingness to communicate.

I do not have the huge stake that posters here have acquired and I did not buy any shares under 70 cents. But I bought a lot under $1 and I have target of $3-5 this year and $5-10 end of 2022. My total holdings are in the low 10,000s of shares.

I went back to the Jan 14 presentation and Paul clearly said that the flow tests which impacted the 5000 BOE/day estimates for each of upper and lower zones at Cascadura1-ST well were capped by the limitations of the testing equipment. Could be that the reservoir size, the reserves, and the expected daily production numbers are more impacted by the pressure tests including the build up after draw down after a period of shut in. I don't totally understand this very well, but I know those two Cascadura1 intervals are monsters (out of 3 total intervals TXP has tested including the 1000 BOE/day interval at Coho) . And I know we are testing SIX more intervals THIS MONTH. (and two of the zones at Cascadura Deep are really development drilling of the known reservoir that supplied all the fireworks at Cascadura1-ST.

Remember that the initial reserves were based on flow tests that were maxed out on the testing equipment which was not really adequate for the reservoir. The set up that they are using at cascadura deep ("cascadura intermediate" I agree) may be able to give a more full appraisal.

Chinook discovery was only announced on October 14. Primary target had 341 feet of net pay in Gr7a Herrera sands. Secondary target had 180 feet of net pay in Gr7bc sands. (these targets were supported by logs from the old well on the site - the BW-7X well from 50 years ago - and from the results of the Casacura1-ST well) . But just as they hit planned depth they encountered more gas and drilled deeper, encountering a third interval of gas pay of 68 feet, also in the Gr7bc sands. This third area was deeper than anything tested at Cascadura (at least so far, the analogous deep structure there has been targeted but not been reached). This third area was also not seen on the logs from the old BW-7X well.

So the testing will be interesting - they will start with the deepest interval which is the thinnest (68 feet) , but also at the greatest depth and pressure. Then they will move up hole and test the secondary target (180 feet) and finally the primary target (341 feet). Each zone will have flow tests and pressure build up tests.

I don't know how they will be reported or in what sequence but the earliest results should be from the deepest 68 foot zone that is really brand new discovery. Paul had talked on Jan 14 about flipping the testing crew back and forth between chinook and cascadura sites (about 1,3 km) but I don't know if that will still make sense after they get into it.

They could report the flow test on the deepest zone and then the pressure build up testing. Or they could wait and report all 3 chinook zones completely. Or they could report a series of findings as they jump back and forth from one well to the other.

I won't go into details on the planned Cascadura Deep testing but there are also three zones there, with many more feet of pay, but not including any testing of the deep zone that earned the well its name. They just had too much high pressure gas blowing up at them to control the well continue to the planned depth. Not a bad problem.

Ha ha.

PAID at the wellhead.

I'm agreeing with you. There are a lot of benefits from a guaranteed price (and a good one) pain at the wellhead.

Do you know if TXP is building that pipeline, or is the NGC. Or since it was already in planning before the contract, will the NGC reimburse TXP for the costs? The pipeline is going to the Shell processing plant which is only 3 km away and has lots of capacity, since the central block, while still producing nicely, is well off its peak. Is this production excluded from the agreement to buy all of the gas from Ortoire block, or is it part of that.

david black you are right that you cannot get guaranteed forward pricing in Alberta. Right now gas is heading toward $4. But there were 8 separate times in 2017 and a few times each in 2018 and 2019 when Alberta natural gas spot prices turned negative! And oil prices in Alberta were negative for awhile earlier this year though I think natural gas avoided that ignomy in 2020. When we are talking about conventional wells where a few wells will drain a big reservoir for years, then having fixed price at the wellhead (that guarantees profits as well as price) is indeed very good.

I think it will happen and we will start to get some upward momentum, but that is a little harder to do when there are more than a billion shares and hundreds of millions of options outstanding. I know that is not unusual on LSE, but it is a weight that hinders takeoff. Has to chug along the runway, loaded down by that weight, before it can get airborne.

Thanks, I do think we are early in this story, and it is a good story.

TXP leased the Ortoire block in 2014 and sat on it for years while they studied all the old well logs (some provided by Shell and others). I had a small investment right from the beginning (much bigger in last year) and I have followed the company closely. They didn't have much money and were struggling to ramp oil production from shallow wells that produced 50-150 barrels per day. But they also did not have a lot of debt. They laid out a plan to drill 5 exploratory wells on Ortoire block with about enough money available to drill maybe 2. Coho and Cascaura ST discoveries and flow results from Coho and first section of Cascadura ST were important because it bumped the stock up enough that they were able to secure another $10 million at 45 pence in February. The flow tests from the second section of Cascdura ST plus the discovery well (as yet untested) at Chinook allowed them to raise another $30 million in November at 95 pence, basically at the market without massive dilution. People complained about that offering but I celebrated because there was the money to complete the 5 well program. But they still didn't have enough money to build out needed infrastructure and also keep drilling - so the contract with NGC to buy all the gas AT THE WELLHEAD for a good and fixed price was also masterful. Not to mention that it is good for the country and will cut through a lot of the red tape required to build the pipelines - or at the least shift that red tape away from TXP to an agency of the country of Trinidad. Now Cascadura is a proven large discovery that will produce for years. And Chinook will be proven in just a few weeks. Don't forget that they stopped early at Chinook (like at both Cascadura wells) to deal with over-pressurized gas that blew right out to the surface and was hard to contain. And that there is 600 feet of pay at Chinook with larger foot print of the prospect than Cascadura.

Can't wait for Royston, for testing deeper sands at Cascadura (which will cost very little because the upper zones can be development wells for producing the already established reservoir while just drilling a little deeper to see what is below adds an exploratory feature to the well) , and for development wells at Chinook to further delineate that area. But I can't imagine any company having a better year in 2020 despite all the covid chaos. And I really can't think of another company with better prospects in 2021 and 2022. It is hard to believe that every exploratory well will be a discovery, that just doesn't happen. But TXP is sure on a nice roll. Turbidite model proven, 4 discovery wells in a row, 8 development wells already in queue, NGC contract that limits capital needs, no need to raise more capital as they can keep on drilling just based on expected cash flow starting this year and ramping in 2022. And just ahead testing of biggest prospect, Royston.

Paul in his most recent presentation on Jan 14 made it very clear that their identified development wells and their 20 or so exploratory prospects are superior to anything they have considered on adjacent lands. It is clear the Herrera sands and the turbidite concept extends to west to the central block which has been producing for 20 years. And possibly to the balata cental and east areas just north of ortoire, though the sands are thinner there. But Paul made it clear that the sands are thinner to the north and peter off to the south. That was his most recent word on it. Plus he said they have 10 years of drilling with what they have. What I hope he is "sandbagging about" (an apt term in view of the topic) is that the herrera sands could well exist further west along the same trend and underlie some of the shallow oil wells that TXP has been drilling on its legacy blocks. Note that they are trying to extend the leases on those blocks by another 10 years.

Just a brief reply to a couple of comments by Malbrad in this thread.

1. Great success on 4 straight exploration wells is incredible. Having one of five exploration wells fail to be a discovery well should not sink the ship. Though I can argue that the Royston well has less risk now than before the geological concept was proven.

2. The turbidite sands that TXP has tapped are not equally distributed over Trinidad. They thin out to the north and peter out entirely to the south. I would not assume that it is a given that other drillers on Trinidad could easily do the same thing at the same scale.

I loved the comment that the next TXP is ...(drum roll please).....TXP. I have looked for the next one, and have nibbled at a few things including AAV which is very undervalued. But right now my highest conviction small cap O and P is TXP and I have been adding more around $2.00 US. I actually think it is totally safer to be investing now (on heels of 4/4 discovery wells, proof of the turbidite sands concept, contract from NGC which pays for the infrastructure and buys the gas at a very positive price at the well head) than it was 1-2 years ago when TXP had a hairbrained idea about hydrocarbons in turbidite sands on line, put forward a 5 well exploration program of which they had enough money for maybe 2 wells on a block they had held since 2014, and had no money to hook any wells up to production). It is a better buy now than it was at 50 cents. There was a very low probability that all that would come to pass. But it did. Kudos to Paul and the whole company, including the geologists! My targets are $3-5 US by end of 2021 and $5-10 US by end of 2022. They may be too conservative but I have not bumped them up.

Thanks for info and the links to Wells Services website. They have dressed that bigger rig up and it will be good for them and for TXP to have them drilling this succession of wells. We have get deeper at Cascadura and at Chinook - and at Royston and especially for Kracken. Both the Cascadura wells could hardly handle the pressures at the middle depths but it is never bad to have to stop because you are nearly overwhelmed with the amount of hydrocarbons you have encountered. They have been around 50 years. I see they have a drilling school too. They can add to their expertise with these new wells so it can be another win/win.

I'm sure they don't want to jump into the 2 rig program until they get cash coming in. Simply no need to go in debt to drill more in-fill wells until the ones that are sitting there ready to go are hooked up to production.

I bought a little more. Nothing has happened that changed my current targets of $3-5 US end of 2021 and $5-10 US end of 2022.

I figured with Paul's presentation that we needed one number or we would stagnate a bit. I thought it would be the test results on Chinook. When that wasn't there there was nothing really to change anything short term.

But we are locked and loaded for positive developments throughout this year and next. First will still be numbers from Chinook. Then will be numbers from Cascadura Deep (we should call it Cascadura not- deep, though it wanted to be). Then will be flow rate at which Coho is hooked up. Next could be Royston discovery announcement. If so next is Royston test results. Then production rates at which two Cascadura wells go on-line and likely soon after production rates from Chinook going on line. Along the way will be some development wells at Cascadura (one of which may finally get around to testing Cascadura deep) and Chinook and the tie in of those wells. Then there will start to be more financial numbers like production and also revenues and cash flows.

Anyway, I am along for this ride. I took advantage of the pause to get two of my friends to establish positions around $2 US. I feel very confident "selling" this story now where I did not 1-2 years ago even though the price was much lower. Back then we were sitting with a plan to drill 5 exploratory wells (on leases we had held for 5 years without doing anything) targeting a new idea of turbidite sands on land charged with hydrocarbons under seals with a geology similar to what is chased on off-shore wells. Kind of amazing we are 4/4 and it seems to be true.

My best to all. I really feel it is safer to buy here than at any point since I have followed the company, which is from the beginning.

Chinook not even tested yet and if the structure proves to be another like (or better than) cascadura then it will need its own pipe.

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Personally I would take a delay in COoho (8mmcf/day) to 3rd quarter in return for a certainty that Cascadura (includes Cascadura Deep) will come on in 3rd Quarter as well. That is a quarter earlier than expected and might be 10 times or more (80-100 mmcf/day) as Coho.

The price is fixed. (somewhere around $2.50). They take all the gas. I don't know if there is an inflation adjustment. There is a provision for either side to open discussions about the price after 5 years. The contract lasts for 25 years.

There is no penalty but that does not mean that NGC does not have to fulfill their contractual obligations. Otherwise what is a contract. It has been approved by the NGC and the national government. If they do not fulfill the contract they can be sued. Hopefully that won't happen as it is really structured as highly beneficial to both sides.