CALGARY, ALBERTA - Touchstone Exploration Inc. ('Touchstone', 'we', 'our' or the 'Company') (TSX, LSE: TXP) reports its financial and operating results for the three months ended March 31, 2024 and provides an operational update.
Selected financial information is outlined below and should be read in conjunction with our March 31, 2024 unaudited interim condensed consolidated financial statements and related Management's discussion and analysis, both of which will be available under our profile on SEDAR+ (www.sedarplus.ca) and on our website (www.touchstoneexploration.com). Unless otherwise stated, all financial amounts presented herein are rounded to thousands of United States dollars, and all production volumes disclosed herein are sales volumes based on Company working interest before royalty burdens.
Paul R. Baay, President and Chief Executive Officer, commented: 'We are pleased to announce positive first quarter 2024 results during what has been a very busy time for the Company. Since coming onstream in September 2023, the Cascadura field has transformed Touchstone both operationally and financially, having contributed an estimated $20 million in operating netbacks, ahead of tying in the two further successfully drilled development wells from the surface location. Initial decline rates on our two producing Cascadura wells have been steeper than we first expected but we are learning more about the reservoir for further exploitation. We are maintaining our full year guidance given production increases are heavily weighted towards the fourth quarter of 2024. As announced on May 1, 2024, we were delighted to reach an agreement with the Board of Directors of Trinity Exploration and Production Plc on the terms of a recommended all-share acquisition. We believe the benefits of the proposed transaction will provide further scale and strength to Touchstone in addition to growth opportunities that will be driven by the increased production of the two companies. We are excited at the greater flexibility such a deal would give us around future capital programs, in addition to allowing us to potentially accelerate our development plans. We look forward to updating shareholders on our ongoing operating and corporate workstreams in due course.'
First Quarter 2024 Financial and Operating Highlights Achieved average quarterly production of 7,015 boe/d (80 percent natural gas), representing a 228 percent increase from first quarter 2023 average production volumes of 2,139 boe/d (40 percent natural gas). First quarter 2024 production decreased by 18 percent relative to 8,504 boe/d produced in the fourth quarter of 2023 (79 percent natural gas), mainly reflecting natural declines from our Cascadura field. Realized petroleum and natural gas sales of $16,584,000 (Q4 2023 - $20,759,000). - Cascadura field production volumes in the quarter contributed $6,961,000 of net natural gas sales at an average realized price of $2.49 per Mcf and $1,657,000 of net NGL sales at an average realized price of $69.59 per barrel. - Natural gas production from the Coho-1 well averaged net volumes of 2.8 MMcf/d (460 boe/d) in the quarter and contributed $542,000 of net natural gas sales at an average realized price of $2.16 per Mcf. - Crude oil production from our legacy fields contributed $7,424,000 of net sales at an average realized price of $69.95. Generated an operating netback of $10,463,000, a 24 percent decrease from the fourth quarter of 2 2023, primarily due to decreased natural gas and NGL sales volumes. Achieved quarterly funds flow from operations of $6,142,000 in the first quarter of 2024 compared to $10,489,000 in the preceding quarter. Delivered net earnings of $3,628,000 ($0.02 per basic and diluted share). $11,962,000 in quarterly capital investments primarily focused on expenditures directed towards one CO-1 crude oil development well and two Cascadura development wells, and progressing construction on the flowline from the Cascadura C surface location to the Cascadura natural gas processing facility. Exited the first quarter of 2024 with a cash balance of $9,537,000 and a net debt position of $27,621,000, resulting in a reduced net debt to annual funds flow from operations ratio of 1.45 times. Post Period-end Highlights Successfully drilled and cased the CO-375 development on our CO-1 block, with openhole logs and drilling data indicating a sand thickness of approximately 530 feet in the Forest Formation and approximately 625 feet in the Cruse Formation. On April 18, 2024 we executed a third amended and restated loan agreement with our existing lender providing for an additional $13 million of bank debt capacity, which will be used to finance our previously announced initial 2024 capital program. On May 1, 2024, we announced that we reached an agreement with the Board of Directors of Trinity Exploration and Production Plc on the terms of a recommended all-share 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'.
Contact:
Mr. Paul Baay
President and Chief Executive Officer
Tel: 403.750.4487
Forward-looking Statements
The information provided in this news release contains certain forward-looking statements and information (collectively, 'forward-looking statements') within the meaning of applicable securities laws. Such forwardlooking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to assumptions, risks and uncertainties, many of which are beyond the control of the Company. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words 'expect', 'plan', 'anticipate', 'believe', 'intend', 'maintain', 'continue to', 'pursue', 'design', 'result in', 'sustain' 'estimate', 'potential', 'growth', 'near-term', 'long-term', 'forecast', 'contingent' and similar expressions, or are events or conditions that 'will', 'would', 'may', 'could' or 'should' occur or be achieved. The forward-looking statements contained in this news release speak only as of the date hereof and are expressly qualified by this cautionary statement. Specifically, this news release includes, but is not limited to, forward-looking statements relating to: the Company's business plans, strategies, priorities and development plans; Touchstone's preliminary 2024 guidance; the anticipated increase in 2024 annual average production from 2024 capital spending and the cash flows therefrom; anticipated timing of developmental and exploration drilling production; expected drilling activities, including locations and the timing thereof; anticipated timing of well tie-in operations and production coming online; expectations that proceeds from the Company's amended loan agreement will be able to fully finance its 2024 capital program; the Company's proposed acquisition of Trinity Exploration and Production Plc, including the Company's expectation that the proposed acquisition will close under the announced terms, the timing thereof, and the benefits to be derived from the proposed acquisition; the quality and quantity of prospective hydrocarbon accumulations based on openhole wireline logs and drilling data, including the Company's interpretations thereof; expected completion activities, including locations and the timing thereof and the expected timing of production therefrom; the Company's expectation of 6 conducting future well optimization activities and Touchstone's current and future financial position, including the sufficiency of resources to fund future capital expenditures and maintain financial liquidity. The Company's actual decisions, activities, results, performance, or achievement could differ materially from those expressed in, or implied by, such forward-looking statements and accordingly, no assurances can be given that any of the events anticipated by the forward-looking statements will transpire or occur or, if any of them do, what benefits that Touchstone will derive from them. This news release contains future-oriented financial information and financial outlook information (collectively, 'FOFI') about Touchstone's prospective results of operations and production included in its preliminary 2024 guidance, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the paragraphs above. The FOFI contained in this news release was made as of the date of this news release and was provided for the purpose of providing further information about Touchstone's future business operations. This information has been provided for illustration only and, with respect to future periods, is based on budgets and forecasts that are speculative and are subject to a variety of contingencies and may not be appropriate for other purposes. Touchstone and its Management believe that FOFI has been prepared on a reasonable basis, reflecting Management's best estimates and judgments, and represents, to the best of Management's knowledge and opinion, the Company's expected course of action. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results. Touchstone disclaims any intention or obligation to update or revise any FOFI contained herein, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law. Readers are cautioned that the FOFI contained herein should not be used for purposes other than for which it is disclosed herein, and the financial outlook information contained herein is not conclusive and is subject to change. The actual results of the Company's operations and the resulting financial results will vary from the amounts set forth herein and such variations may be material. For further information regarding Touchstone's preliminary 2024 guidance and the related advisories thereto, refer to the Company's news release dated December 19, 2023 entitled 'Touchstone Announces 2024 Capital Budget, Preliminary 2024 Guidance and an Operational Update' and the Company's most recent Management's discussion and analysis for the three months ended March 31, 2024 accompanying our March 31, 2024 unaudited interim condensed consolidated financial statements. For further information regarding the Company's proposed Acquisition of Trinity Exploration and Production Plc and the related advisories thereto, please refer refer to the Company's news release dated May 1, 2024 entitled 'Touchstone Exploration Announces Acquisition of Trinity Exploration and Production PLC' and the Rule 2.7 Announcement. All of the above referenced documents are available online on our SEDAR+ profile (www.sedarplus.ca) and website (www.touchstoneexploration.com). 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 forwardlooking 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 2023 Annual Information Form dated March 20, 2024 which will be available under the Company's profile on SEDAR+ (www.sedarplus.ca) and on the Company's website (www.touchstoneexploration.com). The forwardlooking statements contained in this news release are made as of the date hereof, and except as may be required by applicable securities laws, the Company assumes no obligation or intent to update publicly or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
TOUCHSTONE EXPLORATION INC. 
