Touchstone Exploration Inc (LON:TXP) has entered a long-term natural gas sales agreement with the National Gas Company of Trinidad and Tobago Limited (NGC), covering all future gas production from the Ortoire block.
It will allow the recent discoveries at 80%-owned Ortoire to be delivered into production, starting with the Coho-1 well which was drilled successfully in 2019. Coho-1 when tested, this time last year, flowed at a rate of 46mln cubic feet of gas per day which is the equivalent of 7,671 barrels of oil per day.
"This agreement provides a stable, multi-decade revenue stream for Touchstone to fully develop the world-class asset at Ortoire,” said Paul Baay, Touchstone chief executive in a statement
READ: Touchstone’s Ortoire discoveries keep beating expectations
“This transforms the company from being an exploration company to one that is a full cycle energy provider. The structure of the agreement provides the shareholders of Touchstone with a predictable cash flow and earnings stream for years to come while minimising the capital required to maximise the resource," Baay added.
Meanwhile, Mark Loquan, NGC president commented: “NGC is unwavering in its commitment to secure natural gas through innovation and strategic partnerships, especially in these challenging times. This is notable because onshore natural gas production has been for so long overlooked in the sector."
Coho-1 was the first of four successive discoveries at the Ortoire block – Coho, Cascadura, Chinook, and Cascadura Deep. All have delivered strong results against increasingly high expectations.
The most recent well, Cascadura Deep, was earlier this month described as the “best well drilled to date” in the Ortoire area.
