Touchstone Exploration (LON:TXP CVE:TXP) is the ‘stand-out operator’ in Trinidad according to broker Shore Capital.
Since it joined AIM in June, operational news from Trinidad has been excellent with Touchstone having successfully drilled and brought on stream four new wells.
Production currently stands at circa 1,500 barrels per day and Touchstone appears well set to achieve an average of 1,450bopd said Shore, which has now raised its 2018 production forecast to 1,800bopd (from 1,700bopd).
The house also now expects an adjusted net profit of C$2m in 2018 (versus a loss estimated previously).
“With the shares trading at just 0.3x Risked NAV and at a deep discount on EV/production and EV/reserves measures, we believe that Touchstone has emerged as one of the most interesting relative value plays in our small cap E&P coverage universe.”
Canadian broker Mackie is also keen on the junior.
“Touchstone currently produces about 1,500 bbl/d of a medium to light grade crude oil from about 11 oil fields in Trinidad.
“Most of the fields are very large and have been producing for decades but have only recovered 2% to 13% of the original oil in place.
“Touchstone has booked a total of 78 development locations and 122 recompletion candidates providing years of low risk drilling and recompletion opportunities.
“A drilling and well recompletion program is underway which should boost production in H2/17.”
Speculative buy with a C$30c (18p) target price is Mackie’s view. Shares were 8.72p in London.