Member Info for Scott22

Super good.

1.6 to 2 B. Hints at unit price somewhere in #2's. Which is fixed it seems. Just deals with gas - extra for any liquids and for oil if they find a pool or several pools later.

NGC is natural gas aggregator on island - rated by several entities - has backing of government. Touchstone contract is selling to petrochemical industry and to electricity generation. Not to LNG exports. (Shell and BEP have that covered).

Price is at well head. They pay a nickel in operating costs and 12.5 cents in royalties and the rest is profit.

Listen to the interview - well worth it. Better than super good.

Sorry - Canaccord.

I liked the comment but probably because it echoes my own feeling.

The agreement moves TXP from a speculative buy to a buy. I confess that I still use a Peter Lynch framework for organizing my portfolio and I will have to move TXP from the the special circumstances/turnaround basket (3-5 names at 5-10 percent of portfolio) to my established small cap growth basket (3-5 names at 15-20% of my portfolio). To do that I have to make room in that basket. And keep thinking about what I add next to my special situations/turnaround basket.

Canaccord Genuity analyst Charlie Sharp upgraded Touchstone Exploration Inc. (TXP-T) to “buy” from “speculative buy”

“The formal conclusion of a gas sales agreement (GSA) with the National Gas Company of Trinidad and Tobago establishes the detail of the long-term offtake terms for Ortoire licence gas (TXP, WI 80 per cent),” said Mr. Sharp. “The delivery of the agreement was anticipated before YE20, but that does not diminish its importance. It is clearly a critical plank in providing security of commercialization of all the gas resources, found and to be found, on the licence. While the development plans for discoveries so far on the licence - Coho, Cascadura, Chinook Deep, and Cascadura Deep - were all gaining momentum, those can now be firmed up with clarity on the terms and conditions.

All good if it is true that NGC is becoming the mid-stream operator. That is how many E and P companies in US and Canada operate with a mid-stream partner, so that they do not have to carry the intense capital needs of the infrastructure build out. All they have to do is drill the wells and they get paid at the well head for the produced gas. Same here. But in this case the government agency will also have responsibility for permitting the entire collection infrastructure including any pipelines, pretty tricky in the wilder jungle areas.

Does the NGC run the current pipelines and processing plants on Trinidad? I have never heard of a separate pipeline company or midstream company on T and T. The details will be very interesting and of course it will be very important to have great operations people running the mid-stream efforts.

As for the pricing, I am sure it is a framework. It might depend somewhat on some benchmark price and there likely is some protection probably on low and high ends to protect the company and also ensure an economic supply source for the Trinidad petrochemical industry. Maybe it is a fixed number but 20 years is a very long time. Anyway it was negotiated with eyes open on both ends and should be a win win for TXP and for Trinidad. I am glad Paul has huge industry experience.

Researching Jubilee has been interesting and I like the recent froth growth and their focus on "mining" surface tailings and also their move into copper which gives them a good path for continued robust growth for the next two or more years.

However in looking at the PMG space more broadly I am thinking that SBSW is best positioned and I have started to add some of that to add a little coverage because there is a good long term story for the sector. PMG metals are in short supply and more will be needed for decreasing emissions, for other chemical processes including refining, for lithium batteries, for producing hydrogen which will have to be used in much greater quantities to meet growing electricity needs in a carbon free world. That is just part of it. Any thoughts about SBSW versus other choices.

Risk does come from not knowing what you are doing. But sometimes you accept a risk because of the potential for big reward.
In turnaround/special situations I always like to have 3-5 ideas. If 2 or 3 go bust, that is okay as long as 1 or 2 become 10 baggers. If I had known for sure which candidates were going to flourish, I could have easily avoided the others. But my handicapping has not always been precise. Sometimes something pretty unexpected happens, internal or external to the company. In both directions. In case of TXP we are further down the road than we were just a year ago. It is one thing to talk about a geological model including gas charged turbidites and another to have 4 pipes in the ground including a couple that have kicked gas all the way to surface and two that have been already tested and are waiting on hook-up.

Going into 2021 and 2022 TXP is my highest conviction buy. That stands after doing a recent year end assessment of all my holdings.

However TXP is a small cap speculative holding for sure and should have a small part in a balanced portfolio across different sectors and asset classes. It is a special situation with very low revenue from ho-hum light oil assets but a huge and promising (exciting even) new on-shore natural gas find (4 wells in a row) in a country that badly needs natural gas to keep its petrochemical industry humming. As yet there is not a dollar of revenue from that new discovery but the future looks promising and the shares could be a difference maker in terms of building wealth if the story unfolds as it it promises.

The problem is that it can all unravel or at least under deliver on that huge promise. I have learned that lesson before. So I never bet the farm on a speculative high risk issue.

I enjoy this thread and I appreciate all the good input. But when I go to the TXP screen I see the Director's Deals and see that John Wright is still exercising options and selling the shares. I almost have PTSD from seeing that as I lost very big $$ on the Petrobank, Petrobakken, Petrominerales, Lightstream Resources saga when that story seemed so very promising. Each new well in Columbia came on at 10,000 bpd of sweet light oil and there were also (later) strong assurances that the cash flow from the Canadian oil assets were covering the debt on Lightstream's great assets. However the banks didn't see it that way. There was a last ditch effort to re-organize and save 5% of the equity for the common share holders. That didn't work and private equity took it out in BK and it continued as Ridgeback Resources with initial involvement of some of the principals from Lightstream including Mr. Wright. It is still private but the old crew is no longer involved. Common shareholders got nothing from that. But I did hold on to some Touchstone shares from my original Petrobank holdings and I followed it carefully over the years (boring for a long time) and jumped in bigger as this new chapter started to unfold.

Anyway the only reason for this cautionary tales (triggered only by Mr. Wright's name on the exercising options list) is that if I had bet the farm on Petrobank/Perobakken/Petrominerales/ and Lightstream Resources I would not currently have the $$ to be placing a prudent amount of money in this great opportunity. From which I hope to benefit. Every individual investment has its place and purpose in a bigger strategy. Here is to a better 2020 in so many ways and for continued success of TXP operations which will lead to the story getting better and better and even more profitable.

There is also the Webinar on the books for January 14. Topics will almost certainly include the Contract and the testing results from the Chinook discovery well. There may be a few new details discussed including drilling plans for 2021. We know they are getting the bigger rig for Royston discovery well. But maybe they will move that rig back to Cascadura to test that deeper structure. And what about the rig that has just drilled Casca Deep. They have 3-4 more production wells to drill at Cascadura and at least 3 more at Chinook. But probably they are in no hurry to do those right away since they not hooked up to production. I am really hoping the new contract takes care of everything right to the well head in terms of pipeline construction and also processing capacity including what is needed for the liquids. Then there is the matter of adding another rig back to the light oil producing areas over to the west side of the island. They have been rightfully neglecting those areas but with rebound in oil price that part of operation becomes quite profitable again. So by end of year they may have small rig doing shallow light oil wells at old legacy area, current and now upgraded "big" rig churning out development wells, and biggest rig on island continuing to do exploration wells, hopefully after huge success at Royston and Cascadura Deep. With hopefully no other call on capital for infrasturcture since that may be covered by the new contract. Meanwhile ramp of production and revenue should be really impressive and ramping even more into 2022.

2020 was not good for much in the world, but was a great year for Touchstone. I think 2021 will be even better. And 2022 better yet. In US dollars I look for $2 by end of 2020, $3-5 dollars by end of 2021, and $5-10 by end of 2022. The latter two figures could aspirationally be twice those estimates.

Touchstone and the National Gas Company have already signed a Framework Agreement to develop plans and foster a strategic partnership with respect to the development, sale and purchase of natural gas and natural gas liquids produced from the Ortoire Block.

Is this new? Paul said they were just waiting for the respective boards to sign off on the agreement. Is this what they are talkign about or soemthing different?

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All good points - but they cannot move Royston forward as there is only 1 suitable rig on the island and they have contracted that for Q2. Now if that rig is idle they could maybe change the reservation time but that seems unlikely - when they reserved it it sounded like they had to get in line. Anyway lots of news to come in meantime.

1. NG contract

2. Chinook testing

3. Cascadura deep testing.

4. Coho to production.

All that before the Royston well spuds. That's plenty.

Gas contract is coming. Cascadura deep must be cased already. They may be able to bring the testing set-up into chinook Right away so that news (the chinook testing result) will likely come before any meaningful casca deep findings. Should only take a week or two.

I had no particular reason to add 1000 today. Just had some dividend income and figured why not add a little. Story is very solid. We are in a little pause before next leg up.

My target $5 US in one year and $10 US in 3-5 years. At that point would look at it and make a new calculation based on up to date information. Would consider selling if I feel it gets way ahead of itself. We are far from that now.

Trading in and out at this point is probably not that wise. Nor is harvesting all your gains.

I bought a small position in 2013 and have followed the company closely all that time. I was never tempted to add anymore shares until this year. Because of the unfolding story, I have gradually tripled my position this year. I plan on holding until it plays out. Coho, Cascadura, Chinook. Then Cascadura Deep and Royston. No need to sell any now. Just my opinion.

1. They want to drill several new wells at cascadura and a couple more at chinook - that is what the current rig will do in 2021. Those are development wells.

2. They have already reserved the bigger drill on the island for 2Q 2021 to drill Royston. That is new.

3. The contract with national gas compoany will be signed within a month. Currently it is designed to take all the pipeline and gas processing cost away from Touchstone. They will essentially be drilling and selling gas at the wellhead as the wells are drilled and come on line. He did not mention a price (NDA) but he said it would be favorable and did reference current Trinidad procing being favorable.

4. Mentioned a third rig drilling economic oil wells on the legacy acres. Much shallower wells. As long as price of oil is near $50. Also mentioned that the step up for extra oil surcharge tax has been bumped up wquite a bit - from 65 to 85(???).