Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF) shares slumped, losing 19% to 7.5p, after it flagged near-term liquidity pressure and issued a going concern warning tied to debt covenants and funding needs.
It came, however, as the firm reported first-quarter production rose year-on-year, with average daily production up 8% to 4,657 barrels of oil equivalent per day, as output from the Central field helped offset natural declines across legacy assets.
Petroleum and natural gas sales totalled US$12.5 million, up from US$11.0 million in the fourth quarter, helped by higher realised gas and crude oil prices. Operating netback improved 46% quarter-on-quarter to US$13.73 per boe, while funds flow from operations rose to US$1.85 million from US$0.62 million.
Nevertheless, Touchstone reported a net loss of US$2.38 million, compared with net income of US$13.62 million in the prior quarter (which had been boosted by US$14.53 million of one-time non-cash gains), and net debt stood at US$76.07 million at the end of March.
The company said it had a working capital deficit of US$22.2 million, excluding its 2028 convertible debenture, and was pursuing a recapitalisation plan that includes lender talks, VAT recovery efforts in Trinidad and Tobago, operational cash-flow growth and possible equity initiatives.
Operationally, Touchstone said the Cascadura compressor arrived in Trinidad in April, with commissioning expected in June 2026, while its FR-1836 well on the WD-8 block encountered an estimated 227 feet of net hydrocarbon pay.