Touchstone Exploration Inc (AIM:TXP, TSX:TXP, OTC:PBEGF)’s strength is in its strong volume, say analysts at Finncap, which set a target price of 137p.
According to the brokers, this will be the last quarter of it being a pure oil producer, with gas discovery in Ortoire close to start-up, while its project in Coho is expected on stream soon and Cascadura is on track for first gas in early 2023.
While results were restrained by Trinidad’s supplemental petroleum tax, which takes the upside of oil prices above US$75/bbl, this will not apply to its impending gas production, although fixed pricing is lower.
Analysts at the advisory firm added that what the firm “lacks in leverage to high oil/gas prices, it will make up for with strong revenue volume growth.”
This should drive a strong increase in cash flow, allowing further development of the Ortoire block resources and phase 2 of its exploration programme to commence.