Touchstone Exploration Inc · TSX:TXP
Touchstone Exploration — Investor Presentation (September 2020)
27 slides from Touchstone Exploration's investor presentation, September 2020
Slide 1: Corporate Presentation
Corporate Presentation Driving growth, profitability and responsibility in the Trinidad oil and gas industry September 2020 1
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: Touchstone's Competitive Advantage
Touchstone’s ➢ Proven and experienced leadership Competitive Advantage ➢ Focused strategy onshore Trinidad oil and gas ➢ Positive operating cash flows ➢ Significant exploration opportunities 3
Slide 4: Our Five Pillar Corporate Vision
Our Five Pillar Corporate Vision Exploration Upside Scalable Economic Growth Value Creation Environmental Stewardship Community Leadership 4
Slide 5: Land Holdings
Land Holdings Developed Acreage Exploration Acreage Oil Pool 7,836 net working interest acres 35,785 net working interest acres Proved (“1P”) reserves of 10,692 Mbbls(1) Coho – 1P reserves of 1,148 Mboe; 2P reserves of 3,348 Mboe(1) Gas Pool Proved plus probable (“2P”) reserves of 18,708 Mbbls(1) Ca
Slide 6: Exploration Upside
Exploration Upside The highly exciting exploration campaign at the Ortoire block represents a significant opportunity for Touchstone and the wider Trinidad oil & gas industry, as seen by the success encountered at the first two discoveries. 6
Slide 7: Exploration Upside – Ortoire Block
Exploration Upside – Ortoire Block Coho-1 Cascadura-1ST1 Chinook-1 Cascadura-Deep Royston Gas Discovery Gas Discovery Gas Prospect Gas Prospect Gas Prospect 28.1 MMcf/d 11.6 MMcf/d 783 bbls/d Constructing Constructing (1,925 boe/d)(3) (5,472 boe/d)(4) Drilling Q3 2020 Q1 2020 7
Slide 8: The Ortoire Block - 80% working interest and 35,785 net working interest acres
The Ortoire Block - 80% working interest and 35,785 net working interest acres Balata East Oil 10 MMbbls Pool Pipeline Gas Discovery Pool river Valve Station Pool CASCADURA Pipeline Well CAS-1ST1 Facility Pipeline tie-in CHINOOK-1 ROYSTON ROYSTON-1 CHINOOK COHO COHO-1 Baraka Central Block Gas Plant
Slide 9: COHO-1
Flowback testing exceeded expectations(3) COHO-1 46.0 MMcf/d AOF 11.6 MMcf/d average Estimated gross future production rate(3) 10 – 12 MMcf/d (1,333 – 1,600 boe/d net) Reserves(1) 1P - 1,148 Mboe 2P - 3,348 Mboe Natural Gas Fiscal Advantage Trinidad domestic price 12.5% crown royalty Not subject to
Slide 10: Cascadura-1ST1
Cascadura-1ST1 Upper Test Results(4) 390 MMcf/d AOF 5,472 boe/d average 86% natural gas Lower Test Results(4) 92 MMcf/d AOF 5,157 boe/d average 87% natural gas Reserves(2) 1P - 23,622 Mboe 2P - 45,030 Mboe 10
Slide 11: Chinook-1 and Cascadura-Deep
Chinook-1 and Cascadura-Deep Cascadura-Deep Chinook-1 ➢ Targeting to test two new ➢ The original well was drilled thrust sheets to understand in 1959 and encountered oil the true potential of the on core and oil while drilling. Herrera sands in the area. 11
Slide 12: Royston-1 – Natural Gas Prospect
Shell Trinidad Limited Royston-1 – Natural Gas Prospect Lizard Springs (OL-4) c. 1965 Original well was drilled in 1965. Logs indicated 700 feet of gas effect, but the well was never tested. Ortoire P10 Case Synclinal Basin P50 Case P90 Case ROYSTON-1 LOC 12
Slide 13: 2020 Goals
2020 Goals 2020 Corporate Goals ➢Negotiate and formalize a natural gas marketing contract for the Ortoire block. ➢Drill Chinook-1 and Cascadura-Deep prior to the end of 2020. ➢Bring Coho-1 onto production to increase cash flows and decrease the Company’s sole reliance on volatile crude oil pricing.
Slide 14: Scalable Economic Growth
Scalable Economic Growth Our developed properties have continued to be a key attribute to the Company’s success through the low base production decline rate and long- life production, that require minimal capital to maintain. 14
Slide 15: Developed Acreage and Production
Developed Acreage and Production “A 20-year drilling program providing Touchstone with a strong organic growth platform” YTD Q2 production of 1,493 10 Producing fields 208 Drilling locations(9) bbls/d 15
Slide 16: Value Creation
Environmental Stewardship Value Creation “I am happy to report that the Company finished the second quarter with a healthy cash position with increased financial flexibility through a new term loan, monetizing our Trinidad government issued bonds for past due value added taxes, and reducing our oper
Slide 17: A Snapshot of Touchstone
A Snapshot of Touchstone First Half 2020 Results Capital Structure at August 31, 2020 Petroleum Sales Operating Netback(5)(6) $10,453,000 $14.92/bbl Term Credit Facility Market Capitalization(8) Average Crude Oil Production $20,000,000 C$234,197,856 1,493 bbls/d Funds Flow From Operations(5) Capital
Slide 18: Environmental Stewardship
Environmental Stewardship Environmental Stewardship “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.” 18
Slide 19: Current: Water Disposal Next: Mitigating Natural Gas Release
Current: Water Disposal Goal: Result: Eliminate surface release of produced water Implemented the first 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 released w
Slide 20: Case Study: Restoration of Special Needs Centre
Environmental Stewardship ➢ 11 employees, including our CEO, assisted in restoring a Case Study: derelict building in the Rio Claro community into a development centre for special needs children. Restoration of ➢ The centre caters to children with intellectual, physical and Special Needs development
Slide 21: Investment Summary
Investment Summary Significant exploration Opportunities Pipeline of healthy organic growth from a multi-year production programme Strong capital discipline combined with positive cashflow Management has a proven record of transforming small E&Ps Achieve a sustainable level of social and environment
Slide 22: Corporate Information Abbreviations
Corporate Information Abbreviations Head Office Year End: December 31 bbl(s) barrel(s) Suite 4100, 350 7th Ave SW bbls/d barrels per day Calgary, AB T2P 3N9 Engineers: GLJ Ltd. Mbbls thousand barrels Office: (403) 750-4400 Auditors: Ernst & Young LLP MMbbls million barrels Website: www.touchstoneexp
Slide 23: Endnotes
Endnotes 1) Based on December 31, 2019 GLJ Ltd. independent reserves evaluation. See “Advisories: Oil and Gas Reserves”. 2) Based on June 30, 2020 GLJ Ltd. independent reserves evaluation. See “Advisories: Oil and Gas Reserves”. 3) See “Advisories: Oil and Gas Test Results”. Please refer to the Comp
Slide 24: Endnotes
Endnotes 7) ($000’s) June 30, 2020 Current assets 15,758 Less: current liabilities 9,224 Working capital surplus 6,534 8) Calculated as the product of the Company’s TSX common share closing price on August 31, 2020 (C$1.27/share) and 184,407,761 common shares outstanding. 9) Drilling locations are b
Slide 25: 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 has in any
Slide 26: Advisories
Advisories Oil and Gas Reserves The reserves information summarized in this presentation are from the Company’s December 31, 2019 and June 30, 2020 independent reserve reports prepared by Touchstone’s independent reserves evaluator, GLJ Ltd. (“GLJ”), dated March 4, 2020 and July 17, 2020, respective
Slide 27: Advisories
Advisories Non-GAAP Measures This presentation may contain terms commonly used in the oil and natural gas industry, such as funds flow from operations, working capital, and operating netback. These terms do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) an
Touchstone Exploration — Investor Presentation (September 2020) on 6ix