FinnCap note8 Aug 2022 21:34
Completion of the Cascadura EIA Excellent news for Touchstone whose Cascadura EIA report has been given a clean bill of health by the Trinidad authorities, with the final environmental approvals for the Cascadura gas development expected in the coming days/weeks. With the start-up of the Coho gas field imminent, Touchstone is on the cusp of transformational volume growth that will see it become a major onshore gas producer in Trinidad. This will also provide a significant boost to cash flow, allowing Touchstone to further develop Cascadura while also restarting exploration drilling on the prolific Ortoire block in 2023. We reiterate our 137p/sh price target. - Cascadura final environmental approval expected soon. Touchstone has received confirmation from Trinidad’s Environmental Management Authority (EMA) that no additional information is required for its Cascadura Environmental Impact Assessment (EIA). The EIA’s remaining documentation has been submitted, paving the way for Touchstone to start developing the Cascadura gas field (TXP 80%) once the Certificate of Environmental Clearance (CEC) is provided, which the EMA has confirmed will happen by September 15 but is expected much sooner. - Once the CEC is received, Touchstone will start the construction of the Cascadura surface facility, access roads, liquids pipeline and future development drilling locations. This is expected to take 3-4 months with long lead equipment items already in country and major construction contracts in place. The Cascadura facilities (three separators, four compressors), including a 3km liquids pipeline, are expected to cost ~US$12m gross (TXP 80%).
Cascadura on track for early 2023 start-up. This announcement puts Cascadura on track for an early 2023 start-up, with initial gross production of 11,500 boepd (9,200 boepd net) expected from the Cascadura-1ST1 and Cascadura Deep-1 wells, a major uplift in volumes relative to Touchstone’s Q1 2022 reported production of 1,396 bpd. These volumes are expected to grow, with the Cascadura natural gas processing facility designed for a maximum gross capacity of ~200 mmcfd of natural gas and 5,000 bpd of associated liquids (38,333 boepd combined) from both existing wells and future planned development drilling at the Cascadura B and C locations.
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