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TOUCHSTONE EXPLORATION ANNOUNCES PRIVATE PLACEMENT AND AN ACQUISITION
FINANCING UPDATE
CALGARY, ALBERTA (May 8, 2025) - Touchstone Exploration Inc. ("Touchstone" or the "Company") (TSX,
LSE: TXP) announces that it has successfully raised £15.375 million (approximately US$20.5 million) by
way of a private placement of 75,000,000 new common shares of no par value in the Company with certain
institutional and other investors in the United Kingdom (the "Private Placement").
Touchstone is also pleased to announce that it has additionally signed a binding term sheet with its Trinidad
based lender, Republic Bank Limited ("RBL"), to provide debt financing for the previously announced
transaction to acquire the entire share capital of Shell Trinidad Central Block Limited (the "Acquisition").
Private Placement
The placement price of 20.5 pence (approximately C$0.38) per new common share represents an 11.8
percent discount to 23.25 pence, which was the closing price of the Company's common shares on the AIM
market of the London Stock Exchange ("AIM") on May 7, 2025. The new common shares will, when issued,
represent approximately 24.1 percent of the total issued share capital of the Company as enlarged by the
Private Placement.
The new common shares will, when issued, rank pari passu in all respects with the Company's existing
issued common shares. All new common shares being issued by the Company pursuant to the Private
Placement will be freely transferable; however, any of these new common shares that are resold to
residents of Canada (or any person otherwise subject to the securities laws of any jurisdiction of Canada)
will be subject to applicable Canadian securities laws, which may include restrictions on resale, whether
through a Canadian exchange or otherwise.
Applications have been made for the new common shares to be admitted to trading on the Toronto Stock
Exchange ("TSX") and AIM (the "Admission"). Subject to the receipt of required approvals from the TSX
and AIM, it is expected that settlement of the Private Placement and Admission will occur at or before 8.00
a.m. (BST) on May 15, 2025. The Private Placement is conditional, among other things, upon Admission
becoming effective and the placing agreement entered into between the Company and OAK Securities in
connection with the Private Placement not being terminated in accordance with its terms. The Private
Placement is not conditional on the Acquisition.
The Company currently has 236,460,661 common shares in issue. Following Admission, the Company's
issued share capital will consist of 311,460,661 common shares. The Company does not hold any common
shares in treasury and, therefore, following Admission, the total number of voting rights attributable to the
common shares in the capital of the Company will be 311,460,661. This figure may be used by shareholders
to determine if they are required to notify their interest in, or a change to their interest in, the Company.
The Private Placement was arranged by Portillion Capital and OAK Securities.
Use of Proceeds of Private Placement
The Company intends to use the net proceeds from the Private Placement to finance the following
development activities and provide additional working capital to:
• finish drilling and completion of the Cascadura-4ST1 development well;
• drilling and completing the Cascadura-5 development well;
• tie-in the Cascadura-4ST1 and Cascadura-5 wells; and
• drill and complete two Central block development wells (subject to completion of the Acquisition).
Rather than finance the 2025 capital budget as previously announced through an expansion of its debt
facilities, the Company intends to finance its 2025 capital budget by way of the Private Placement. The
Cascadura-4ST1 and Cascadura-5 development wells formed part of the Company's 2025 capital budget
announced on December 9, 2024. The planned drilling of the two Central block development wells will
replace two of the Cascadura development wells previously included in the 2025 capital budget. As
previously noted, revised 2025 guidance will be issued by the Company subsequent to completion of the
Acquisition.
Financing of the Acquisition
As previously announced, on December 13, 2024 the Company's wholly owned Trinidadian subsidiary,
Touchstone Exploration (Trinidad) Ltd. ("TETL") signed a conditional share purchase agreement (the
"SPA") to acquire 100 percent of Shell Trinidad Central Block Limited ("STCBL") from BG Overseas
Holdings Limited. STCBL holds a 65 percent participating interest in the onshore Central block exploration
and production licence, as well as four producing gas wells and a gas processing plant in Trinidad, with
state-owned Heritage Petroleum Company Limited holding the remaining 35 percent participating interest.
Under the terms of the SPA, on closing Touchstone will pay $23 million in cash plus December 31, 2024
cash and abandonment fund balances, currently estimated to be approximately $30 million.
TETL has signed a binding term sheet with RBL providing for a new $30 million six-year non-revolving term
loan to partially fund the Acquisition. TETL and RBL are currently preparing a Fourth Amended and
Restated Loan Agreement and related security registrations (the "Amended Bank Loan Agreement").
Subject to the execution of the Amended Bank Loan Agreement, Touchstone intends to use the net
proceeds from the term loan together with existing cash resources to fund the cash consideration payable
under the terms of the Acquisition. The Acquisition is expected to close during the second quarter of 2025
.
The Acquisition
As first announced on December 13, 2024, the Acquisition will be transformational for Touchstone. Gross
field estimated production from the Central block from March 1, 2025 through April 15, 2025 was
approximately 17.5 MMcf/d of natural gas and 185 bbls/d of NGLs (approximately 3,075 boe/d), equating
to net production of approximately 2,000 boe/d for STCBL.
Touchstone has assessed the pro forma net working interest reserves in STCBL, as of April 1, 2025 (based
on a 65 percent working interest), to be approximately 3.2 MMboe of proved developed producing reserves,
5.1 MMboe of total proved reserves, and 5.6 MMboe of total proved plus probable reserves. These
estimates correspond to before tax NPV10 values of approximately $41.7 million, $85.7 million, and $95.5
million, and after tax NPV10 values of approximately $19.4 million, $38.5 million, and $42.9 million,
respectively. The estimates are based on reasonable assumptions. Actual results may differ materially from
these projections, and all figures remain subject to change and are contingent upon completion of the
Acquisition.
STCBL holds one natural gas marketing contract accessing the Trinidad domestic market, and two natural
gas marketing contracts accessing the Atlantic LNG facility in Trinidad. The pricing associated with the LNG
contracts is a combination of commodities including Brent oil, Henry Hub natural gas and world LNG pricing.
The pricing varies monthly depending on market conditions, which differs from the Company's current
natural gas contract, which is a fixed price arrangement for volumes produced from the Ortoire block.
Following completion of the Acquisition, the Company's initial Central block development plan will focus on
the optimization of the four existing wells prior to drilling the two development wells set out above.
Combined with the Cascadura development drilling noted above, the Company's 2025 budgeted
capital activity has the potential to increase production during the second half of 2025 to between
8,000 and 9,000 boe/d, prior to natural declines. As noted above, revised 2025 guidance will be
issued by the Company subsequent to completion of the Acquisition.
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary, Alberta based company engaged in the business of acquiring
interests in petroleum and natural gas rights and the exploration, development, production and sale of
petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of
Trinidad and Tobago. The Company's common shares are traded on the Toronto Stock Exchange and the
AIM market of the London Stock Exchange under the symbol "TXP".
For further information about Touchstone, please visit www.touchstoneexploration.com or contact:
Touchstone Exploration Inc.
Paul Baay, President and Chief Executive Officer Tel: +1 (403) 750-4405
Scott Budau, Chief Financial Officer
Brian Hollingshead, EVP Engineering and BD
James Shipka, EVP Asset Development and HSE
Email: touchstone@fticonsulting.com
Advisories
Shore Capital (Nominated Advisor and Joint Broker)
Daniel Bush / Toby Gibbs / Tom Knibbs Tel: +44 (0) 20 7408 4090
Canaccord Genuity (Joint Broker)
Adam James / Charlie Hammond Tel: +44 (0) 20 7523 8000
OAK Securities (Broker to the Private Placement) Tel: +44 (0) 20 3973 3678
Jerry Keen / Calvin Man
FTI Consulting (Financial PR)
Nick Hennis / Ben Brewerton / Lucy Wigney Tel: +44 (0) 20 3727 1000
Currency
For reference purposes in this announcement, one British pound has been translated into United States
dollars ("$" or "US$") at a rate of 1.00 to 1.38, and one British pound has been translated into Canadian
dollars ("C$") at a rate of 1.00 to 1.84.
Source:
touchstoneexploration.com
GLTA !
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