Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF) told investors it averaged 7,015 barrels oil equivalent per day in its quarter ended 31 March, confirming significant year-on-year improvement.
The stronger performance was driven by the Cascadura field coming online, which has seen the field become a cornerstone Touchstone’s operations.
Year-on-year production was up some 228% from the same three months of 2023, although compared to the preceding quarter output had decreased by 18% from 8,504 boepd. It was described as natural decline from the Cascadura wells.
In its outlook, the company noted that it has so far drilled four of its planned six wells from which the next phase of production growth is earmarked.
Touchstone generated $16.58 million of sales in the three-month period and achieved net income of $3.63 million, equating to $0.02 per basic and diluted share.
Meanwhile, Cascadura and the company’s growing production profile has provided Touchstone the platform to expand via the deal table – with the company earlier this month striking terms to acquire Trinidad peer Trinity Exploration & Production.
The proposed deal aims to consolidate high-potential exploration and development projects, with Touchstone’s increasing ability to self-fund growth.
Paul Baay, Touchstone's chief executive, in today’s statement commented: “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.”
Investors will updated on the detail of Touchstone’s ongoing operating and corporate workstreams in due course, Baay added.
Looking back, he said: “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.”
Baay noted that Touchstone is maintaining our full-year guidance, and noted that its anticipated next production growth is “heavily weighted towards the fourth quarter”.