Touchstone Exploration Inc's (AIM:TXP, TSX:TXP, OTC:PBEGF) third quarter results chart a company progressing its ramp-up towards an ‘inflection point’ with new, higher volume wells now closer on the horizon.
Cascadura coming online in the first quarter of 2023 is expected to be the major catalyst, from a production growth perspective, though last month’s start-up of the Coho gas operation also moves the needle – adding 1,212 boepd over the first 19 days since first production.
The company’s incumbent oil production operations meanwhile averaged 1,272 barrels of oil per day, down 10% on the prior three months, driving US$9.93mln of realised oil sales at an average price of US$84.85 per barrel (versus US$7.65mln and US$62.37 in Q3 2021).
Touchstone paid US$1.38mln of income tax in the quarter, versus US$377,000 for the period a year ago, which included a US$1.17mln supplemental tax triggered by the crude price being above US$75 per barrel.
Cash at the end of the quarter amounted to US$8.73mln and the company reported funds flow from operations at US$377,000. It invested US$2.89mln of capital in the period as it continued to progress Coho and Cascadura.
The Coho facility came online on 10 October and Cascadura, which in prior tests saw volumes of over 9,000 boepd.
"The focus of the third quarter was the completion of the Coho natural gas facility which is currently on production, providing us with our first natural gas revenues in October,” chief executive Paul Baay said in a statement.
“Our base oil production continues to generate positive operating cash flows while we progress on construction of the Cascadura natural gas and liquids facility.
“Production from our Cascadura discoveries will mark an inflection point for Touchstone, both from a cash flow and production volume basis.”
Baay added: “As we plan for our next stage of production growth, we are targeting further expansion of our onshore asset portfolio, through both the Trinidad 2022 onshore bid round and by considering other licence acquisition opportunities to expand our exploration and development acreage in prospective areas in Trinidad."