Touchstone Exploration
Near term potential revenue increase from Central Block
One of the shareholders on the TXP Discord forum recently received a response from TXP CEO Paul Baay to a number of questions he submitted
One of the answers regarding upcoming drill targets : The next four wells to be drilled will be on the Central Block .
My thoughts :
Cascadura 5 gas well should be tied into the production line in the next couple of weeks, then Cascadura 4
gas well will be tied in sometime in November adding to the current production .
However, the biggest catalyst coule be the next four weels that are going to be drilled on the Central Block over the next 6 months .... with any decent success, production will increase from the current 17,000 mcf/d from Central Block. Any production above 22,000 mcf/d will be exposed to a mix of world LNG pricing based on the Japan/Korea Marker, Netherlands TTF and the Brent oil benchmark prices.
That means that any production over the contracted 22,000 mcf/d that TXP sends from the Central Block to the Point Fortin LNG plant will receive the current world LNG price, which is currently hovering around US$11.00 / mcf .
The net cost for each central block well should be around US$3.5 - $4.0 million with their partner picking up the other 35% cost per well.
References.
Trinidad LNG pricing
energynow.tt
"This is the first installment of a two-part series examining natural gas prices. In this segment, we focus on the international pricing benchmarks for natural gas across three key markets: the Netherlands Title Transfer Facility (TTF), the U.S. Henry Hub, and the Japan/Korea Marker (JKM). These markets play a critical role in determining natural gas prices globally and are particularly relevant to Trinidad and Tobago (T&T). In the past the price for LNG being exported from T&T was linked to Henry Hub prices, however the revised pricing formula for T&T LNG exports is now based on one third JKM, one third TTF and one third the Brent oil price benchmark. The U.S. Henry Hub, located in Louisiana, is the most widely recognized natural gas pricing point in North America.
This is the price that often gets quoted on news channels as the “natural gas price” though in reality, natural gas prices vary significantly based on both geography and on the contract under which the gas is sold. The Netherlands Title Transfer Facility (TTF) is a virtual trading hub for natural gas in the Netherlands and serves as the primary benchmark for gas prices in Europe. Meanwhile, the Japan/Korea Marker (JKM) is a key reference price for liquefied natural gas (LNG) in Asia.
Given that almost half of T&T’s natural gas is exported as LNG, variations in the prices of gas at the European and Asian hubs (as well as variations in oil prices) will have a big impact on the price of natural gas at the wellhead in T&T. This impacts the revenue collected by the Government."
Netherlands TTF ( Oct 10 Euro $32.88 / MWH )
finance.yahoo.com
1 MWH = 3.412 mcf
€32.88 / 3.412 = €9.62 / mcf x $1.157 exchange rate = US$11.14 / mcf
Conversion from MWH to mcf
kylesconverter.com
Japan/Korea Marker ( Oct 10 - US$11.08/mcf )
ca.investing.com
Brent Oil Benchmark ( Oct 10 currently $62.08 / 6 = US$10.35 mcf )
ca.investing.com |
