Touchstone Exploration Inc · TSX:TXP
Touchstone Exploration — Investor Presentation (May 2020)
33 slides from Touchstone Exploration's investor presentation, May 2020
Slide 1: Corporate Presentation
Corporate Presentation May 2020 Driving growth, profitability and responsibility in the Trinidad oil and gas industry TSX / LSE: TXP
Slide 2: Forward-looking Information
Forward-looking Information Unless otherwise stated, all financial amounts herein are presented in United States dollars (“$”). The Company may also reference Canadian dollars (“C$”), Trinidad and Tobago dollars (“TT$”) and Pounds Sterling (“£”) herein. Certain information regarding Touchstone Explo
Slide 3: Why invest in Trinidad?
Why invest in Trinidad? ➢ Proven oil reserves of approximately 200 million barrels as at year-end 2018(1) ➢ Largest oil and gas producer in the Caribbean, generating 87,000 bbls of crude oil per day and 3.3 Bcf of natural gas per day in 2018(1) ➢ The 8th largest exporter of liquified natural gas in
Slide 4: Why invest in Touchstone?
Why invest in Touchstone? ➢ Proven and experienced management team ➢ Focused strategy onshore Trinidad oil and gas ➢ Positive operating cash flows from current producing properties ➢ Significant exploration opportunities providing upside potential 4
Slide 5: Our Five Pillar Corporate Vision
Our Five Pillar Corporate Vision Exploration Upside Scalable Economic Growth Value Creation Environmental Stewardship Community Leadership 5
Slide 6: Land Holdings
Land Holdings | | Developed Acreage | | Exploration Acreage Undeveloped Acreage Oo Oil Pool 7,836 net working interest acres 35,785 net working interest acres 18,512 net working interest acres Proved (1P) reserves of 10,692MbbIs;,) Coho reserves — 1P of 1,148 Mboe; 2P of 3,348 Mboe,,, @ Gas Pool Pro
Slide 7: Exploration Upside
Exploration Upside Scalable Economic Growth Value Creation Environmental Stewardship Community Leadership 7
Slide 8: Ortoire Block
Ortoire Block 80% working interest and 35,785 net working interest acres Oil Balata East 10 MMbbls Pool Pipeline Gas CASCADURA Discovery Pool Pipeline CAS-1ST1 Well CHINOOK-1 Facility ROYSTON ROYSTON-1 CHINOOK COHO COHO-1 Baraka Central Block Gas Plant East c. 80 MMcf/d Capacity c. 40 MMcf/d Through
Slide 9: Exploration Upside – Ortoire Block
Exploration Upside – Ortoire Block Coho-1 Cascadura-1ST1 Chinook Royston Gas Discovery Gas Discovery Gas Prospect Gas Prospect 11.6 MMcf/d(4) 5,180 boe/d(4) Constructing Constructing 9
Slide 10: Coho-1 Significant Natural Gas Discovery
Coho-1 Significant Natural Gas Discovery Flowback testing exceeded expectations(4) Natural Gas Fiscal 46.0 MMcf/d AOF Advantage 11.6 MMcf/d Average Trinidad domestic price 19.8 MMcf/d Peak 12.5% crown royalty 9% Sandface drawdown Not subject to SPT Estimated future production rates of 10 – 12 MMcf/d
Slide 11: Cascadura-1ST1 Significant Liquids Rich Natural Gas Discovery
Liquids Rich Gas Cascadura-1ST1 Fiscal Advantage Significant Liquids Rich 12.5% crown royalty Natural Gas Discovery Natural gas not subject to SPT (c.87% of production test rate) Liquids Rich Gas Test(4) SPT payable only on NGL (c.13% of production test rate) Average 5,180 boe/d 26.9 MMcf/d Natural
Slide 12: Chinook-1 Natural Gas Prospect
Shell Trinidad Limited Shell Trinidad Limited BW-7, 7X & CHIN-1 Chinook-1 Balata West 7 (BW-7) Spud: May 20, 1959 BW-7X Sidetrack TD: August 18, 1959 Natural Gas BW-9 Prospect Chinook-1 was originally an oil prospect, however, due to the results at CAS-1ST1 the Company now has BW-7X CHINOOK-1 strong
Slide 13: Royston-1 Natural Gas Prospect
Shell Trinidad Limited Ortoire Lizard Springs (OL-4) synclinal Royston-1 c. 1965 basin Natural Gas Prospect Original well was drilled in 1965 - logs indicated 700 feet of gas effect, but the well was never P10 Case tested. P50 Case P90 Case ROYSTON-1 LOC 13
Slide 14: 2020 Corporate Goals on the Ortoire Block
2020 Corporate Goals on the Ortoire Block ➢ Bring Coho-1 onto production to increase cash flows and decrease our sole reliance on volatile crude oil forward pricing ➢ Drill and evaluate at least one commitment well on the Ortoire block subject to maintaining liquidity targets ➢ Formulate a design an
Slide 15: Scalable Economic Growth
Scalable Economic Growth Exploration Upside Value Creation Environmental Stewardship Community Leadership 15
Slide 16: Scalable Economic Growth
Scalable Economic Growth 19 Onshore blocks 10 Producing fields 208 Drilling locations(5) 16
Slide 17: Value Creation
Value Creation Exploration Upside Scalable Economic Growth Environmental Stewardship Community Leadership 17
Slide 18: First Quarter 2020 Results and Capital Structure
First Quarter 2020 Results Petroleum Sales Operating Netback(6)(7) $6,698,000 $18.61/bbl A Snapshot of Touchstone Average Crude Oil Production 1,589 bbls/d Funds Flow From Operations(6) Capital Expenditures $1,257,000 $2,043,000 Working Capital Surplus(6)(8) Cash $8,094,000 $12,219,000 Capital Struc
Slide 19: Equity Return Comparison
Equity Return Comparison Touchstone (TXP) vs. TSX Capped Energy Index ETF (XEG) vs. TSX60 Index ETF (XIU) April 30, 2019 to April 30, 2020 250 TXP: 83.05% XEG: -52.48% XIU: -10.08% 200 150 % Change 100 50 0 -50 -100 Apr Jul Oct 2020 Apr Source: TMX Money 19
Slide 20: Environmental Stewardship
Environmental Stewardship Exploration Upside Scalable Economic Growth Value Creation Community Leadership 20
Slide 21: Environmental Stewardship
Environmental Stewardship Taking care of the environment is not a requirement; it is a privilege. “Touchstone is committed to working with our partners at both national and local levels to ensure we set the benchmark for high environmental standards in Trinidad.” Becoming an World International Annu
Slide 22: What's Current: Water Disposal
Goal: Result: What’s Current: Eliminate surface release of Implemented the first water Water Disposal produced water disposal well in Trinidad Current water disposal well reduces surface effluent release by 100 bbls/d. Progressing towards becoming the first company in Trinidad to have no surface rel
Slide 23: Community Leadership
Community Leadership Exploration Upside Scalable Economic Growth Value Creation Environmental Stewardship 23
Slide 24: Community Leadership
Community Leadership ➢ Strong culture and history of engagement with local communities. ➢ Touchstone is dedicated to enhancing the livelihood of its employees and improving our local communities through a series of investments in physical activities and infrastructure projects. 24
Slide 25: Case Study – Restoration of Special Needs Centre
Case Study – Restoration of Special Needs Centre ➢ 11 employees, including our CEO, assisted in restoring a derelict building in the Rio Claro community into a development centre for special needs children. ➢ The centre will cater to children with intellectual, physical and developmental challenges
Slide 26: Investment Summary
Investment Summary 1 Significant exploration opportunities 2 Pipeline of healthy organic growth from a multi-year production programme 3 Strong capital discipline combined with positive cashflow 4 Management has a proven record of transforming small E&Ps 5 Achieve a sustainable level of social and e
Slide 27: Corporate Information and Abbreviations
Corporate Information Abbreviations Head Office bbl(s) barrel(s) Suite 4100, 350 7th Ave SW Year End: December 31 Mbbls thousand barrels Calgary, AB T2P 3N9 Engineers: GLJ Petroleum Consultants Ltd. MMbbls million barrels Office: (403) 750-4400 Auditors: Ernst & Young LLP bbls/d barrels per day Webs
Slide 28: Endnotes
Endnotes 1) Source: BP Statistical Review of World Energy 2019, 68th edition. 2) Source: International Gas Union: 2019 World LNG Report. 3) Based on December 31, 2019 GLJ Petroleum Consultants Ltd. independent reserves evaluation. See “Advisories: Oil and Gas Reserves”. 4) See “Advisories: Oil and G
Slide 29: Endnotes
Endnotes 8) ($000’s) March 31, 2020 Current assets (19,961) Less: current liabilities 11,867 Working capital surplus 8,094 9) Calculated as the product of the Company’s TSX common share closing price on May 25, 2020 (C$0.73/share) and 183,590,795 common shares outstanding. 29
Slide 30: Advisories
Advisories Advisories This presentation is for information purposes only and is not under any circumstances to be construed as a prospectus or an advertisement for a public offering of such securities. No securities commission or similar authority in Canada or elsewhere or the Toronto Stock Exchange
Slide 31: Advisories
Advisories Oil and Gas Reserves The reserves information summarized in this presentation are from the Company’s December 31, 2019 independent reserve report prepared by Touchstone’s independent reserves evaluator, GLJ Petroleum Consultants Ltd. (“GLJ”), dated March 4, 2020. This report was prepared
Slide 32: Advisories
Advisories Oil and Gas Test Results References in this presentation to production test rates and initial flow rates are useful in confirming the presence of hydrocarbons; however, such rates are not determinative of the rates at which such wells will commence production and decline thereafter and ar
Slide 33: Advisories
Advisories Non-GAAP Measures (Continued) Funds flow from operations is an additional GAAP measure included in the Company’s consolidated statements of cash flows. The Company uses operating netback as a key performance indicator of field results. Operating netback is presented on a total and per bar
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