Touchstone Exploration PLC’s (LON:TXP, TSE:TXP) latest discovery in Trinidad is “absolutely cracking” according to Shore Capital analyst Craig Howie.
Shares shot up around 26% in Wednesday’s deals after announcing a significant gas discovery at the Chinook-1 exploration well in Trinidad.
Chinook-1 was drilled down to 10,039 feet and has encountered some 589 feet of net gas pay across three sections in the Herrara sands, and also saw 20 feet separately in the shallower Cruse formation, the group said.
The well was a follow up to the successful Cascadura gas discovery well, testing a separate structural formation to the south.
It is planned that Chinook-1 will be tested and completed for production during the first quarter of 2021.
Touchstone's chief executive Paul Baay pointed out that the results from Chinook-1 have so far exceeded pre-drill expectations.
“Chinook-1 is Touchstone’s third exploration well drilled on the Ortoire block and continues the company’s 100% drilling success rate following commencement of its Ortoire exploration campaign,” Craig Howie said in a note.
“In the meantime, Touchstone expects mobilisation of the drilling rig to its Cascadura Deep well location before the end of this month, providing scope for continued important drilling catalysts in the nearer term.”
He added: “Accordingly, we continue to see an excellent opportunity for investors to gain exposure to this leading Trinidadian operator, which remains one of the most resilient names on our E&P coverage list.”
Paul Baay, in this morning’s statement, said: “The successful exploration well further confirms the geological model developed by our team and is expected to provide significant development opportunities in the Chinook area,” Baay said in a statement.
“With both the shallow and deepest zones being new to the area, it also identified future exploration opportunities. The company's focus is now on the drilling of the Cascadura Deep exploration well, which will impact the timing of Chinook-1 production testing operations to ensure the safety of operations.”
James Shipka, Touchstone chief operating officer added: “We continue to see the significant and growing potential of the Ortoire exploration block with Chinook-1 encountering over 2,000 feet of turbidite deposits, nearly 1,500 feet of developed sands and a total of over 600 feet of natural gas pay.
“At a depth of 10,039 feet, Chinook-1 is one of the deepest wells drilled onshore Trinidad in almost a decade and verifies the evolution of our drilling practices since commencing our exploration program.”