Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF) shares jumped almost 19% after the Trinidad-focused oil and gas producer reported a sharp improvement in second-quarter earnings and encouraging early performance from its Cascadura compression project.
The shares were trading at around 9.5p in early London trading, up 18.75% from previous close.
Touchstone generated funds flow from operations of US$7.13 million during the 3 months to June 30, up from US$1.85 million in the previous quarter, while swinging to net income of US$2.34 million from a US$2.38 million first-quarter loss.
Petroleum and natural gas sales increased 39% quarter-on-quarter to US$17.47 million, supported by stronger realised commodity prices, while operating netback improved 77% to US$24.37 per barrel of oil equivalent.
Average production was 4,433 barrels of oil equivalent per day (boe/d), down 5% sequentially as planned maintenance at Atlantic LNG constrained natural gas production.
Cascadura performance ahead of expectations
The Cascadura booster compressor was commissioned in late June and entered service on July 9.
Initial performance has exceeded expectations, with gross natural gas production averaging around 16.5 million cubic feet per day despite wells remaining choke-restricted.
Touchstone also completed the Baraka East-1 recompletion, which averaged approximately 2.3 MMcf/d of gas and 72 barrels per day of liquids during its first 30 days. Two WD-8 oil development wells were also brought online during the quarter.
Balance sheet strengthened
Net debt fell 10% sequentially to US$68.71 million at quarter-end, while Touchstone completed financing generating US$10.2 million in net proceeds.
After quarter-end, an US$8.4 million debenture was repaid and the proceeds redirected into an equity subscription, eliminating the associated debt obligation.
Touchstone operates oil and natural gas assets across Trinidad and Tobago, including the Ortoire, Central and WD-8 blocks, with its near-term program focused on production optimisation and further development of its existing resource base.
