Touchstone Exploration released their Q3 Financials and MD&A on November 12
Market has reacted very negatively to the Q3 results and the low flow rate from
Cascadura 5. Alot of the negative sentiment has to do with the current debt levels
and cash flow.
News Release for Q3 results
touchstoneexploration.com
Q3 Financial Statements:
touchstoneexploration.com
Q3 MD&A:
touchstoneexploration.com
The company's share price is currently trading at a market cap equivalent to the current
cash position based on the US$12,865,000 Q3 cash balance, US$4,002,000 in accounts
receiveable for September petroleum and natgas sales and the US$9,100,000 cash received
end of October from the Purebond and retail financing.
The company has roughly US$25,867,000 available cash, and also has almost US$8 million in
Value Added Tax refunds owed by the Trinidad Gov't.
Cascadura 5 was not a complete failure and there is almost 600 feet of pay zone that can be
perforated. At current flow rates of 2,400 mcf/d and 106 bbl/d liquids, Cascadura 5 is generating
around US$1,125,000 in additional revenue, but far lower than the guided 14,000 - 17,000 mcf/d
and 200 bbl/d flush rates that CEO Paul Baay projected a few months ago. So yeah, that's
a disappointment. No mention of Cascadura 4, and there has been nothing mentioned about
the oil production from Cascadura 3.
Current cash flow is covering the debt servicing costs. The company needs to have a couple of
successful wells drilled on the Central Block and producing by the end of Q2 2026, when the
principal payments on the Central Block term loan begin on May 12, 2026. The principal payments
for the Central Block term loan are US$1,429,000 quarterly.
The drill rig is on its way to the new Central Block pad and should spud Carapal Ridge 3 by the
end of November. Each well is supposedly going to cost approximately U$6 million with their
partner paying for its 35% share the net cost of each well to Touchstone is just under US$4 million.
Touchstone is also committed to completing the compressor installation at their Cascadura facility
by the end of Q2 which will help stablilize production flow into the mainline where pressure
fluctiuates depending on other supplliers to that line. According to CEO Paul Baay, the comparessor
will add about 5,000 mcf/d to production. The company already paid a US$2.6 million deposit for
the compressor and owes another US$3.6 million when it arrives in Trinidad in Q1 2026
Best as I can see, the company is adequately capitalized to complete their intended CAPEX program
of 4 new wells on Central Block in the next 3 quarters and install the compressor at their
Cascadura facility.
Central Block is currently producing around 23,000 mcf/d, so any new production being piped to
the Point Fortin Processing Facility will be exposed to the current world liquid natural gas price
currently hovering over US$11.00 /mcf for any production over the 22,000 mcf/d contract which
ends in May 2027 when all production will be exposed to world LNG pricing
The holder of the US$12.5 million convertible debenture, Jeffrey Wood, continues to add to his
significant position, adding almost 2 million more shares this week to hold almost 5 million shares.
ceo.ca
I'm quite sure Jeffrey Wood went through the company's financials quite diligently and knew the
Cascadura situation prior to providing US$12.5 million to the company.
I would imagine Purebond would also have gone through the financials and production profile prior
to committng their funds in late October.
The company is being valued at ridiculously low levels ... |
