CALGARY - Touchstone Exploration Inc. ('Touchstone', 'we', 'us' or the 'Company') (TSX / LSE: TXP) announces a proposed placing (the 'Placing') of a minimum of US$9.1 million (approximately GBP7.0 million) through the issue of common shares of no par value (the 'Placing Shares') with institutional investors in the United Kingdom at a minimum price of 38 pence per Placing Share (approximately C$0.66) (the 'Placing Price').
The Placing Price represents a 14.6 percent and 8.3 percent discount to 44.47 pence and 41.46 pence, being the five and ten day volume weighted average price of the Company's common shares on the AIM market of the London Stock Exchange ('AIM') as of February 18, 2020, respectively. In the event of excess demand, the Company reserves the right to increase the size of the Placing. The Placing is being completed by way of an accelerated bookbuild. Shore Capital is acting as sole bookrunner in connection with the Placing.
Background to the Placing and Use of Proceeds
The Company commenced its exploration program on the Ortoire block, onshore in the Republic of Trinidad and Tobago (Touchstone 80% working interest) in the second half of 2019, drilling two gross exploration wells (1.6 net). Coho-1, the first natural gas prospect, had an encouraging production test that exceeded the Company's expectations. Touchstone completed drilling its second Ortoire exploration prospect, Cascadura-1, in December 2019, and the first stage of production testing in February 2020 confirmed a substantial liquids-rich gas discovery.
On the basis of the successful results from the first two Ortoire exploration wells, the Company is launching the Placing in order to support the drilling of a further Ortoire exploration well at the Chinook prospect, which is targeting a separate structure along the same geological trend. The net proceeds of the Placing are also expected to be used to complete the second stage of the Cascadura-1ST1 production test and provide additional working capital for the Company while it progresses the Ortoire exploration program. Subject to the result of the Placing, operational cashflows from ongoing production and prevailing commodity pricing, the Company intends to undertake drilling of the fourth exploration well at the Royston prospect on the Ortoire block and continue well recompletions on its current development properties in 2020.
Details of the Placing
The Placing is being completed within the Company's existing share issuance authorities. Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited (together, 'Shore Capital') will be conducting an accelerated bookbuilding process in respect of the Placing (the 'Bookbuild'). The book will open with immediate effect. Shore Capital has entered into an agreement with Touchstone (the 'Placing Agreement') under which, subject to the conditions set out therein, Shore Capital will agree to use its respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. Members of the public are not entitled to participate in the Placing.
The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with Touchstone's existing issued common shares of no par value each ('Common Shares'). Details of the final number of Placing Shares and the Placing Price will be announced as soon as practicable after the closing of the Bookbuild.
Application will be made for the Placing Shares to be admitted to trading on the Toronto Stock Exchange ('TSX') and AIM ('Admission'). It is expected that Admission will take place at or around 8.00 a.m. (London time) on February 26, 2020 (or such later date as may be agreed between the Company and Shore Capital). The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional upon the Placing Agreement not being terminated in accordance with its terms.
All Placing Shares will be freely transferable outside of Canada; however, the Placing Shares are subject to a four-month and one day restricted hold period in Canada which will prevent such Placing Shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement.
This announcement should be read in its entirety. In particular, you should read and understand the information provided in the 'Important Notice' section of this announcement.
About Touchstone
Touchstone Exploration Inc. is a Calgary 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'.
Advisories
For reference purposes in this announcement, one British pound has been converted into US dollars at a rate of 1.00 to 1.30 and Canadian dollars at a rate of 1.00 to 1.73.
Forward-Looking Statements
Certain information provided in this announcement may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements in this announcement include, but are not limited to, those in respect of the anticipated size, pricing and closing date of the Placing; the satisfaction of all required conditions and approvals (including approvals from the TSX and AIM) for completion of the Placing; the Company's intended use of the net proceeds of the Placing, including the potential undertaking, timing, number, locations and costs of future exploration and development well drilling and well recompletions and the sufficiency of resources and available financing to fund future exploration and development well drilling and well recompletion operations. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Certain of these risks are set out in more detail in the Company's December 31, 2018 Annual Information Form dated March 26, 2019 which has been filed on SEDAR and can be accessed at www.sedar.com. The forward-looking statements contained in this announcement are made as of the date hereof, and except as may be required by applicable securities laws, the Company assumes no obligation to update publicly or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
Contact:
Tel: +1 (403) 750-4487
TOUCHSTONE EXPLORATION INC. 
