Touchstone Exploration (TSX:TXP) — Investor Update

0:00 Good afternoon, and welcome to the TOUCHSTONE EXPLORATION INC investor update presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. It could be submitted anytime via the Q and A tab situated in the right hand corner of your screen. To click q and a, scroll to the bottom, type your question, and press send. Company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd also like to say it's fantastic to have so many of the TOUCHSTONE EXPLORATION team with us today. So I'll start with the list. We've got Paul Bay, president and CEO, Scott Baudai, CFO, James Shipka, COO, Brian Tolling's Head, VP of engineering and business development, Xavier Monan, manager of exploration Lyn Anderson, manager of subservice Christopher George, general manager operations and Ria de Gourville, manager of HSE.

0:51 I'd now like to hand you over to Paul Bay, president and CEO. Good afternoon, Paul.

0:55 Thank you very much, Paul, for the introduction, and welcome, everybody. Today, I think we've got a a really interesting presentation for you. And, really, the the concept for today is to give you a little more detail on some of the things that you've maybe seen in some of our previous presentations and, as well as meet some of the other members of the team that I'm sure a number of, people haven't haven't seen before. We're gonna break the presentation down into a number of, different areas. We're gonna start out just doing a a quick financial review of the information that was provided about a week ago in our year end numbers. We'll work through through some of the reserve numbers, then we'll go into a a fairly quick look at the legacy properties and then a a what I'll call a deep dive into the Orotois property, which obviously is a lot of the focus for us and for shareholders. So we'll we'll break that down and and update you on a a number of things going through there. And then we wanna figure finish off with some things that are very important to us, both the HSE and the ESG and sustainability portion.

1:51 And after that, as Paul mentioned, I'll give a quick little wrap up, and then we'll, we'll answer any questions that you might have. So the concept for today is, as I mentioned, is to to meet more of the team, and really understand the inventory of opportunities that we have and and hopefully give everybody an update on, on where things are at. So let me start out. I'll I'll turn it over to Scott, and he can run us through the, the numbers from last week. Thank you, Paul. Good morning, or afternoon, everybody. As Paul mentioned, my name is Scott Budow. I'm the CFO. Just a quick opening financial slide for everyone. This slide summarizes our current capital structure and

2:28 our 2021 financial results. I'll not go into too much detail given these were, released on Monday, but I think there's two key highlights, to point out, and that would be our our net earnings report in the year and our our funds flow from operations report in the year. 2021, we actually had net earnings of 5,700,000. This reversal was, this sorry. It was based on the impairment reversal that was previously took in 2019. I think the key takeaway here is that, you know, obviously, the the the crude oil strip price increased throughout the year, but this is also a a really based on our our strong reserve book that was released back in early March twenty twenty two. So I think the team will discuss that further, but really was a good booking this year.

3:16 From a funds flow perspective, our legacy crude oil properties continue to be cash flow positive. We reported funds sold approximately 4,100,000 in the year. And the fact that we continue to continually cover our overhead while we, you know, increase our workforce, increase our administrative functions that allocate towards or to ours is really key highlight, I think, that shouldn't be overlooked. And moving on to the balance sheet, we exit 2021 with approximately 18,000,000 in cash and 20,000,000 in net debt. And, I think the the key takeaway every investor should have after this presentation is is in 2022, our our main priority is increasing production and increasing cash flow from our our our TOUCHST discoveries.

3:58 And to that end, I think our balance sheet, we're fairly comfortable that we have ample liquidity to fund the remaining Coho pipeline costs, which are occurring as we speak, and then our budgeted Cascadura facility costs, which we are currently budgeting at approximately 9 to $10,000,000. Finally, I just would like to point out that our our twenty twenty two annual meeting of shareholders will be held virtually on 06/09/2022. And for those investors who can attend, we hope to see or hear from you then. Thank you.

4:30 Hi, everyone. I'm Brian Hollingshead, VP of engineering and business development. I'm gonna start off with some some reserves data. Over the last three years, our reserve book has grown significantly, thanks much to the successful art to our exploration program. On a two p basis, we've had 85% annual growth in reserves to the current 76, million BOEs, and we've also achieved a nice balance of commodity mix across gas and oil reserves.

5:04 Similarly, we've seen significant growth in reserves value, NPV 10. Over 60 annual growth in NPV 10 to about $536,000,000 3p currently, which compares to current market cap of about $250,000,000.

5:26 Thanks, Brian. I'm James Shipka, chief operating officer here at TOUCHSTONE, and I'll just, reintroduce or summarize here our land holdings. To the Southwest section here in Trinidad, we've got our long life, low decline legacy oil acreage. This is sweet, light sweet to light and medium grade oil. Been on production for quite some time. And then to the East, we have the Oroquois exploration block, which will be the core of the majority of the discussion we have here today. Taking a little bit deeper look at the legacy oil assets. Right now, we've got a total of seven producing assets there, but, really, the bulk of our production comes from from four key blocks or or three key blocks with Kura being being two separate agreements.

6:19 WD 4 does about 40% of our production right now. WD 8 does about 20%. Kura does about 30%. And our small noncore assets, Faizabad, San Francik, Barrickcore, and New Dom combined do about 10% of our production. In February, production was just under 1,400 barrels a day. And one of the key things that we did in 2021, Scott did a great effort in getting this across the line as we entered into a ten year extended agreements on those four key properties of Kura 1, Kura 2, W D 4, and W D 8 that gives us a running room into December 2030 to continue to develop those properties. Looking at the activity there on the legacy oil acreage in 2021, we drilled three wells.

7:09 We drilled P S 610, which was in W D 4. That well came on beginning of January of this year and has averaged since then about 95 barrels a day.

7:21 In W D 8, we drilled two wells, f r eighteen fifteen and eighteen sixteen. 1815 came on a little bit later in January. Initial production was about a 100 barrels a day. It's averaged 50, and today, we actually have a a rig on that well optimizing production to get it back up to that 100 barrel a day mark. Eighteen sixteen came on in February. That well flowed for about about a month at 65 barrels a day, and we're putting it on pump actually as we speak as well, again, with a target of a 100 barrel a day production out of that well. For 2022, we have two wells that we'll be drilling on these legacy oil blocks. Inkura, G 17, IL 81, And 2 are targeting forest and cruise sands down between 5,500 feet and 6,500 feet.

8:10 And you can see there in in the bottom picture there, that is the surface location. Both of those wells will be drilled off a single well pad to minimize our environmental impact and to keep costs down and and move forward there. Looking at the Ortois block, and the team will get into detail on all of these different prospects. But what we wanted to give everyone a look at was what we're doing there right now, particularly interested at Coho, where we've got facility construction going on in the pipeline going in, over at Cascadura, where we're in the EIA review process, but we're also preparing the surface facilities, and over at Royston, where we are are doing our testing there

8:55 and getting ready to put together a a field development plan to share with the ministry. Much like the legacy oil blocks, in March of this year, we were granted a five year extension to Ottawa, which really is a a game changer for us. It gives us five more years to pursue some of the exploration targets that you'll see here shortly, but it also allows us the flexibility to prioritize the activities we'll have on the block in that time. We can look at development on a slightly different schedule. We can look at exploration when it's convenient or when we have windows for the rig. So it really allows us to find that balance, and it's gonna be really, really interesting to watch over the next year or two as Ortois goes from an exploration block to an exploration and development block.

9:45 Hi. Good morning, everyone. Christopher George, general manager of operations. I will be presenting to you an update on the core facility and pipeline regarding the surface facility. As you could see to the left of the screen, there's a pick of the surface facility at the core one well site at the moment. That has been 95% completed. Most of the major installation has been done. Currently working on some of the smaller installations, which includes the the installation of the gas meter, GC, flow computers, etcetera. All of these equipment has already been procured in the country and would be installed in the next coming coming weeks. Also, site facilities are also in place, fully powered by our solar power system as we remain committed to have green green co green in terms of power requirements on-site.

10:42 Regarding the pipeline, as you can see, there's a picture of welding activities that that has been ongoing for the last couple of weeks. The entire right away has been cleared. It should be noted that a major section of the right away actually lies along a preexisting old road infrastructure. It's approximately 1.7 kilometers that would have would have allowed us to to really minimize in terms of the impact in on the environment, in terms of vegetation clearance. So that was really good in terms of the installation for the pipeline works. We expect to be continuing well then over the next couple of weeks. That will be followed by of the pipe, trenching activities, installation of the pipe, thereafter, we would have the backfilling done.

11:30 On this slide, on the left of of your screen, you could see that we have the stringing of the six inch pipe along the right of way. That will be ongoing over the next couple of weeks. As well as on the right of your screen, you would see that there are some of the pipe sections that has already been welded. So we continue to move feverishly as we work towards meeting first gas for for me. And we we we believe that we would definitely meet that target as we have been having really good weather over the last couple of days, and that is expected over the next couple of months as we proceed first gas. Thanks. Thanks, Chris.

12:18 So moving over to the the Cascadura facility project, the equipment procurement and construction are are well underway. We've taken a proactive approach to the facility equipment process with all long lead items being procured, well ahead of time for this facility. We've also engaged with the local shipping and logistics firm, and they'll manage the the end to end shipping for for all the equipment. And this will help us avoid any shipping and supply chain bottlenecks.

12:49 Our procurement process for the facility has been to bid for equipment locally in Trinidad as well as Canada and The US, and then we move forward with the the best option. The three separators have been constructed in Canada. They're currently being created for shipment to Cascadura. On the left is the Cascadura one separator shown, which will be capable of about 55,000,000 cubic feet per day from that single well. And also included is the CASD separator as well as the condensate flash separator, which is on the bottom right. And that condensate flash separator will take gas vapors, that emit from the light condensate and divert it back into the system for gas sales.

13:39 The two VRU and two recycled compressors are currently being built in Houston, Texas, and they're scheduled to ship in late April. These compressors will take gas vapors from the tanks and flash separator and boost them back up to high pressure for gas sales. We've sourced two compressors to provide redundancies in the system and avoid any significant downtime due to any equipment repairs. So each unit will be sized for about 75% of total capacity. So if one happens to go down for repairs, the other one can pick up, most of the load and keep the gas flowing.

14:23 Thanks, Brian. Just wanted to walk everyone through the EIA process, where we are in it, and what it actually encompasses. So the way that the EIA works in Trinidad is it is an environmental impact assessment that comes as part of our approval to move forward with the project. The the EMA who governs this decided that this project was at a significant enough scope that an EIA was warranted. So what we did is we applied for approval to do really the entire development process of Cascadura. This EIA covers the construction of our surface facility up to a capacity of 200,000,000 a day of natural gas, 5,000 barrels a day of associated condensate.

15:09 It's got a total storage capacity of almost 10,000 barrels at the Cascadura a site, plus it gives us a line of sight for the Cascadura B and Cascadura C surface locations that Lynn will introduce to you shortly, and the wells associated with that, as well as the building of an access road to the south and this condensate sales pipeline that will take that to market with our partner Heritage there. This process kicked off in April of last year. We went through community consultations. We went through environmental reviews. We went through impact and mitigation surveys and emergency response planning. We submitted this to the ministry in December, and we should be notified by mid May as to the status of the project and its approval.

15:58 And to give you some some insight on there, you've got kind of the the 12 chapters that we have to focus on, and we don't have the leeway with the EIA process to make significant changes. So when we have a field development plan completed, we needed all of that to be submitted to to ministry. And this was a 1,700 page document.

16:20 And just for for fun, that required 13 hard copies to be delivered to the various government ministries and agencies. So a really significant project. But with its approval, not only will will we be able to continue with the, construction that that Brian has alluded to? It'll give us a clear path over the next three to five years of development of Cascadero to bring it on to its full potential of of what we see as being 200,000,000,000 a day of gas.

16:51 Starting to key in on some of the other properties from a geological point of view and a testing point of view, we'll look at Royston first, the the oil asset we've got there. And the nice thing about Royston is we've got a really good comparable field at Pinot Berwick pour, which has been on production at this point in time for almost a hundred years. It's produced about a 115,000,000 barrels of oil and over half a TCF of associated gas. The similarities between Royston and Pinna Pinnail Barakpur are are excellent, both with respect to geology and depths and thicknesses. Royston is actually a little bit thicker as is the majority of the Orotois, Herrera sands that we see. And you can see that our our reserve booking not reserve booking. Pardon me. Our original oil in place that Brian will just discuss here in a minute of of almost 212,000,000 barrels is pretty consistent with what you, you see out of that same Pinot Barracore field. So this has given us not only us confidence, but our reserve evaluators and other engineering and geological, specialists that we brought into the project, confidence with with how not only Royston should work, but Herrera, in this area should work.

18:08 So as James mentioned, GLJ, our independent reserves auditors, prepared an assessment of Royston at year end 2021. They calculated the the overthrust and intermediate sheets to contain between a hundred and twenty eight and two hundred and twelve million barrels of oil in place. This represents an exciting, sizable new oil pool discovery by TOUCHSTONE, and we're very excited over the years to delineate and develop it further. The subthrust was not evaluated by GLJ as the Royston one well did not penetrate it. However, the oil we've seen in the upper sheets bodes well for deeper prospects at Royston. So at at Royston, we performed three tests, and I'll just I'll summarize the three of them here.

19:02 The first test was at the bottom of the wellbore in the top of the intermediate sheet. That zone tested about 550 barrels a day flowing light sweet, clean crude oil. The second and third tests were in the overthrust section of the wellbore with the uppermost test three flowing at rates of around 750 barrels per day of total fluid with about 30 to 60% oil cuts.

19:29 We currently have the well on a long term production test in that that uppermost zone with oil rates of about 75 barrels per day. Reservoir inflow and pressures are are still performing well at Royston, and this is even despite the 2,000 foot downhole perforating assembly that's, stuck in the hole across the perforations, effectively impeding, reservoir inflow. And I think overall, the Royston one, while it exhibited, you know, strong initial pressures of over 7,000 psi and very solid flow rates. And, you know, the results we saw across the the intermediate and overthrust have aligned well with the the penile barric pour analog that James spoke to.

20:17 So going forward at Royston one, we're currently evaluating a drilling sidetrack operation, which would see us reenter the existing wellbore and kick off at about 7,000 feet and then drill out and evaluate the entire, intermediate sheet as the the Royston one well, as it stands, didn't get to the bottom of the intermediate. As well in our completions, at Royston one, we perforated, you know, large gross sand intervals with our perf guns. And I think going forward, we'll definitely look to be more selective in our our perforation intervals to reduce the water inflow.

21:03 Thanks, Brian. I'll turn this over now to to Lynn and Zap to kinda walk through the development prospects that we've got here at at Orotois starting at Coho and going through Cascadero and Royston. And, again, this this kinda keys in off what I touched on earlier that we're moving from this exploration phase to the monetization phase. And as we get these infrastructure projects done, as we get Coho tied in, as we get Cascadura facility built and tied in and roist and optimized, we can then select where we want to increase that production through development drilling on the individual properties. We're we're having a little bit of conductivity issues with Lynn who's in Trinidad, but I think she's there now. If you're there, Lynn, take it away.

22:06 Hi, Lind. Can you hear us okay?

22:12 Lind, just to test your connectivity there. It seems like you can't hear us at the moment. Paul, perhaps we'll give it a moment just to see if Lynn does connect. If not, we'll carry on with the presentation. Perhaps come back to this if we may, or if you could carry on, that'll be great. No. I think I can I can carry on? I think if when when Lynn shows up, we can let her jump in there if not. What we wanna talk about now is is really the development wells that we've got lined up throughout the Oritwa block. And I apologize that Lynn isn't able to join us. She's our manager of subsurface actually, in Trinidad right now, in the field, keeping an eye on a few things. So this is our Coho prospect. This is the one that James talked a little bit earlier about where we're currently tying in that well that you see that's the the flame on that map. But what we, what we really see is there's another development location just up to the north, just up to the north that you see there is Coho 2. And the real key to that, as you can see, we move up structurally, as we move up to the north. But on the other side of that little saddle that is, illustrated there by that dash green line, and, we can drill that from the same pad. It's about 450 meters, up to the north, and it'll access the other side of that saddle as we go forward.

23:28 This is in the engineering report, so it won't really add a bunch of reserves. But what what it really will do is is once the team's got that pipeline in place, we can start to evaluate and expand the the gas that's going into that area. So it's a, you know, it's a pretty pretty low risk opportunity for us to go ahead and and bring it on. So that's the the Coho development. And then if we move over to Cascadura, this is taken out of that EIA report that that James had talked about a little bit earlier. And what you see illustrated on here is basically on the the far left hand side of the screen is our existing surface facility, or our existing lease that has ST one, the first two wells that we drilled at Cascadero on there. And that's where Brian and the team along with Christopher will be building the main surface facility.

24:16 It'll mainly be a big knockout of of liquids and condensate. It'll go condensate will go down those green lines and then down to the south, and then the gas will go along that red dotted line up to the north, that 20 inches line. And that 20 inches line

24:31 is gonna be capable of two fifty million cubic feet of day of gas production. So it gives you a pretty good idea of kind of what anticipation is going along there. Will you run you back? Hold on. I was gonna say, I think we may have Lynn back. Yes. Can make can we make Thank you, Lynn. Yes. We can. Thank you. So, Lynn, why don't you just jump in? I just finished up CASE. If you can talk about the the development on CASB and C, that would be great. Yeah. Sure. Good day, everyone. My name is Lynn Anderson. I'm the subsurface manager for TOUCHSTONE EXPLORATION. One thing I wanted to point out pre like, to date, all of our wells have been drilled on preexisting sites. So this is a really important, factor because going ahead with this development phase, we now have the opportunity to high grade all of our locations where previously we had used existing sites to minimize our environmental footprint.

25:27 And we'd also hope to try and expedite some of the regulatory processes.

25:33 But so going ahead with development, we now have the ability to high grade our geological prospects and put them in the optimal position. As Paul mentioned, Cascadura 1 S T 1 and CAS Deep was drilled on the Cascadura A surface and the main facility. As we go eastward to Cascadura B, and c development site, we have four pads on each of these,

26:00 each of these, four locations on each of these pads. Again, trying to minimize our environmental footprint, optimizing, efficiencies for operating. And this will give us an opportunity to explore the upper sheet four or sorry, upper sheet three and, lower sheet four. So we'll be targeting, both of these sands in development, going forward. I believe Paul touched on the NGC gas line, which will go to the main NGC line to the east, and, we also have the six inch condensate that will go south to Heritage and Cats Hill.

26:52 Right. So this brings us to Royston, which was our last well that we drilled. Development in Royston will initially focus on the intermediate and the subthrust. The reason for this is because analogous fields in Trinidad have proven that the intermediate and the subthrust are the most prolific sands, so we'll be focusing on this initially. To the right of the screen, you can see a seismic section. The trajectory in purple and blue, that is Royston, which penetrated the overthrust and also went into the intermediate.

27:39 You can see that we penetrated the sub the overthrust in the crestal position, and the trajectory then went on to the southern limb or southern flank of the intermediate limb. Also on this section, you can see there are a number of development wells noted in red, all targeting the various sheets and different sands. You'll also see two exploration wells noted in black. Number two is Kraken, which is targeting the Cretaceous. And over on the right hand side, we also have Steelhead, which is going to, target Karamat Sands, entirely different play than than what we've done so far. On the left side of the map, we have the little diamonds are showing our surface pads.

28:35 Once again, we're utilizing these pads

28:37 to, to drill multiple wells and, again, just, reduce our environmental footprint. The seismic section on the map is dashed in red, and that is what is shown in the seismic section on the right hand side. That was from our recently, acquired Ortoire two d seismic program, and that is line 40 that you see there. I just wanted to note too that, for COHO, we had we have, submitted a field development plan, declared commerciality, and we have received approval on our field development plan. For Cascadura, We, declared commerciality.

29:26 We submitted the FDP and, just awaiting feedback from ministry. And Royston, we have sent in a notification of discovery, and we'll proceeding be proceeding from there. Yeah.

30:06 Hi there. Yeah. I got it. Thanks, Lynn. I'll pass this on to Zaf who will be able to do a much better job of discussing the exploration prospects we have here at in in Oroquois. What we'll focus on initially is what we call our phase two exploration prospects, which will encompass what what Lida just touched on, Kraken steelhead, and we'll take a look at Bass and Wabine. And then a little bit later, we'll have Zav just go into some of the additional prospects we have coming on the back end of that. So, Zav, I'll let you take it away. Hi. Good day, folks. I'm Zavy, exploration manager of TOUCHSTONE. So, yeah, as Lynn alluded to in the previous slide, we talked about the Kraken prospect, which is quite exciting.

30:52 And it's very quite it's quite exciting indeed because we tied this play back to the Guyana Suriname Basin, which, as you know, is a regional hotspot in Northeast And Latin America. We've actually we've done some recent work with Geomark, a regional geo geochem company, who have basically typed the oils that we've acquired from the well, and those actually type perfectly back to the Guyana Suriname Basin Cretaceous play. So this Cretaceous play is targeting similar type sandstones, some source from the Guyana Shield, and it's all being, overlain by, you know, very thick, marine sediments.

31:35 So this, play type, occurs within the Ottawa block, and we know that, that it occurs actually quite quite below the the Royston feature itself, so it can be targeted from the same pad.

31:52 So Kraken, it would be the first onshore Caucasus attempt in fifteen years. So it's quite a quite a highlight for the country on the whole, and it potentially may be the seventh deepest onshore well ever drilled. In vicinity of the Ottawa block itself, we've looked at all of well, we've looked at all of the Critias as well as across Trinidad. And in vicinity of the Ottawa block, we've got the Exxon drilled, Egwona River well to the south of us, and we've got the Talismans Wells to the north of us. And we've got a a a good handle of the play now. And and, yeah, the fact that Royston has hydrocarbons tells us that the Cretaceous there has a pretty good chance.

32:43 So I'll now move on to steelhead. Steelhead is basically targeting another part of the block, the upper block itself. We wanted to really fully evaluate this block laterally and extensively. Right? And in this play, we're targeting a feature on the southernmost part of the block itself. So that gives us a a tie in that area, and we will be looking at the Karmat sandstones here and the Herrera sandstones. And those sandstones are both based on modeling. They pinch out onto the northern flank of the lizard and the clonal structure. So that cross section you see at the center there, you see the sandstones, yellow sandstones all climbing up this very steep anticline feature there. That's the Lizard Anticline.

33:32 And we're basically targeting an area where those sandstones are then being implicated on the northern flank of it. So that's Steelhead.

33:41 The good thing another good thing about Steelhead is that it's accessible through the same road that we've also built for the Royston area. So pad and road are basically easily accessible. Moving on to the guabin and bass prospects. So these prospects are, again, targeting Herrera sandstones. Guabin, to start with first, it's it's actually got two well penetrations, and it's quite a broad feature, very broad antique mount feature south of the Cascadero area.

34:15 We've got two wells, Cast Castle 87 And 89, both which found 1,500 feet of highly resistive Herrera sandstones, but were not tested due to complications in the wells. And we've actually mapped this feature based on two d and three d seismic, and we see the feature climbing even further towards the east of those wells. So we plan to target that up dip potential.

34:40 Moving on to BAS. So BAS was a feature that we saw on the Southern Basin consortium, two d seismic lines, which were acquired back in the nineteen nineties. And we saw that on one of those lines, and our recently acquired two d seismic was able to highlight it on two further lines towards the west of it. So it confirmed the structural feature. So we see a nice tree with the closure feature in that area as well.

35:08 In the Coho area, so we already spoke of Coho 1 and the potential of Coho 2. Coho, if you look at the seismic section and to the right of the picture, you see a a pop up sort of triangular shaped feature. That's where we are going to produce the the Coho gas from.

35:29 Just to the north of that and to the south of that, there are two sub dress sheets. So we got the Yarrow feature to the north and the Gibber feature to the South. If you look at the seismic section to the left, there's a a large fault which downthrows the Herrera sandstone shown in yellow there. And there's an amplitude feature there that we have mapped up as a giver feature. So there are an a series of of near field exploration that we can target here and potentially tie back to Coho facility.

36:05 I'm moving on to the Chinook area. So Chinook, we basically drilled, again, from an existing pad to reduce the environmental footprint. This was at B W 7. We drilled and we were able to confirm hydrocarbons in three sheets three structural sheets, the overtrust, intermediate, and subtrust. Got great logs over it. We see that the feature climbs based on three d seismic towards the east. And so we've got two sites over there that we want to potentially target this resource.

36:41 Hi, everyone. My name is, the agency manager for TOUCHSTONE. So our goal at TOUCHSTONE is to be an industry leader in Trinidad in corporate governance as well as environmental and social responsibility.

36:55 One of the decisions we made as a leader in the industry is to hire local staff. About five years ago, we did an organizational restructure, and we focused on local Trinidadian staff within the organization to build their careers as well as provide opportunity for growth. TOUCHSTONE now employs about 94 full time staff, 15 of which are at the head office in Calgary that have mentally 79 staff in Trinidad. It's important to know that all 79 employees that are in Trinidad are indeed Trinidadian.

37:27 At TOUCHSTONE, we also believe in equal opportunity, and we value diversity in the workforce. So we provide equal employment opportunity for all employees and don't discriminate based on gender, race, sexual orientation, age, marital status, or disability. And for an example of that, 24% of the workforce are women, which is more than the double industry standard in Trinidad, which is 12%. Moving on to incidents. We had zero lost time incidents in 2021, and so far, zero as well for the year to date for 2022. In the environmental part, whilst we're also continuously strive for zero incidents. Unfortunately, we did have one incident in 2021. However, we're proud to say that it was the only environmental incident we have had in over the last two years.

38:18 Furthermore, as we laid out in our inaugural sustainability report, when it comes to the environment, not only are we following the environmental standards locally, but our goal is to significantly exceed them. So the team has been working diligently to put a plan in place to mitigate total vented gas on our development blocks. And our objective is to achieve and capture all solution gas from our wells and sale facilities to sell or to use back in our operations. Additionally, over the last few years, we've been aiming to eliminate all surface released water. And today, we're proud to say that all our blocks excluding one now has zero effluent release. We're working hard to find a solution for the last final block in W D 4, where we hope to have 100% of all our produced water injected back into the ground by early twenty twenty three.

39:10 Looking at safety of all our stakeholders, Tustin has initiated steps with the energy chamber of Trinidad and Tobago to renew our safe to work certification. This is a local certification program for contractor HSE management systems. And with this process, it would not only create opportunities for increased work in the sector, but would effectively help TOUCHSTONE continue to demonstrate that we govern our business according to industry best practices. Also, it would show that we meet all legislative requirements and effectively manage our risk and continue to do so. Finally, we're committed to giving back to the communities in which we operate. A committee was established to meet and ensure that we are having the greatest impact within our communities.

39:55 In addition, we also hired a community liaison who is out in the community regularly speaking with residents, charities, government officials, representatives, regulatory bodies, you name it, schools, and so on to ensure the contributions we make as a company touch as many people as possible. Thanks very much, Raya. Appreciate that. I hope this has given everybody a a pretty good overview of what we've got in front of us. You know, I think when we take a look at it, we really got four four producing assets now that, you know, one of them is on stream. That's our legacy oil asset. We'll let Coho, Cascadura, excuse me, Royston this year, as the other three producing assets.

40:45 And it really will be a step change for us, you know, go from where we are today at roughly 1,400 barrels a day to something north of 10,000, BOEs a day before the end of the calendar year. And, you know what? I think the other thing that hopefully people will take away from this is the depth of the inventory of opportunities we have, on the island in Trinidad. You know, it really is a multiyear program in what we have. So I think it's really important, to just understand that that's, you know, that's what we've been developing over the last number of years is this this large land base that has endless opportunities, really endless opportunities. As we drill every well, we learn something new for sure. You know, it's it's maybe not as exciting right now as it has been in the past in drilling some of these exploratory wells.

41:33 You know, building the, the shiny silver things that the engineers, love to do and getting this stuff on production, as I say, isn't as exciting as drilling some of the big exploratory wells. But, really, the key now is to take this from being a what I would say is basically a pure exploration company into something that's gonna be a a mid cap, production company with a really exciting exploration bent. And, you know, when you look at the the Karamat, you look at what we've got in the Herrera, and you look at, the Cretaceous that Xavier and Lynn have talked about, yeah, I think it's it's gonna set up a really interesting balance going forward. So on that note, I'll turn it back over to Paul, and and maybe you can fill some of those questions. Paul? Fantastic. Thank you, and thank you to all the team for updating investors today in the presentation. Ladies and gentlemen, do please continue to submit your questions using the q and a tab situated in the right hand corner of your screen.

42:24 Just while the company take a few moments to review those questions submitted today, I'd like to remind you the recording of the presentation along with a copy of the slides and the published Q and A can be accessed via our investor dashboard. Paul and the team, obviously, we received a number of pre submitted questions from investors today, and we focused on on several specific areas. And thank you to everyone who submitted those so far. Perhaps I could start off with the first one, Paul, and you can just direct that to the member of the team. It's appropriate to do so. It reads as follows. Are Coho and Cascadero developments on track? Might there be more delays? Yeah. I think Christopher covered that off. Christopher and Brian covered that off pretty well. I mean, we're looking at, first gas in May at Coho and, you know, touch wood. The the the real thing there is weather. I mean, we've got everything in country, so that's just gonna be our case there. But we've we've built in some time for for those rainy days, so we're pretty comfortable with that. And then September is really driven, at Cascadura is really driven by the EIA process, and I think James did a great job of outlining how complicated that is. And I know that that Raya and her team were were on the ground putting that together. And, we've been working close with the ministry. I was actually in country last week, had a good meeting with the the ministers.

43:32 And, you know, that that May date that that that's set out there is is not only one that is sort of an indication, it's actually in legislation, for them to work to that date, and the ministry is trying to do something sooner for us. But we've built around that that May approval. As Brian pointed out, you know, things are getting shipped from Houston. Things are getting shipped from Canada, and they're gonna be down there in May, June. So, you know, even even if we got the EIA approved a little bit earlier, really, we're still gonna be waiting on on parts. So we're doing this parallel process and working through to that to that September date. Fantastic. Thank you, Paul. Next one we've got here, which I think we have touched on a little as well, is what are the cretaceous potential of the Ottawa license area? How many leads and how big? Yeah. I'm gonna turn that one over to, to Xavier if he's still there to to talk about it because it's it's a play that's only big for Ortois. I think it's big for the country as well. But, Zav, can I turn it over to you?

44:25 Yeah. Sure. I mean, like, it's like I said, it's gonna be, you know, the first test of this play in, like, fifteen years. Right? It's been tested in other parts and stuff. And, I mean, we we know that there are, leads in other other places, but, we will like to evaluate it in Ottawa first and, and see how how it works out. Yep. Yeah. And I think the the other part of that, Paul, is, yes, we do see other leads. They're not on lands that we currently control, so we're not gonna show anybody or talk about them too much. So leave that with us. Sounds like a good idea. Next question we've got here is please talk us through the future drilling plans at TOUCHSTONE covering Coho, Royston, Casadero, Chinook, and exploration. Yeah. I I I think when you know, and I know a lot of shareholders are really interested what our what our plan is as far as as where we go next. And that's gonna be, again, driven by, how quickly we get the IA. And and once we've got a clear view of of Cascadura coming on, I think Scott will be a lot more comfortable to to kinda let us go do things. I mean, we've been telling people since day one that, that since we have these discoveries that we were gonna manage, these assets, with minimum dilution. You know, we did some raises to drill the wells, but but Scott's got us in a position now where we're funded to get this on production. So that's gonna be the focus. But once we get the drilling program going, it'll start, probably on two fronts. So the two wells at Carr are obviously ready to go on the legacy assets.

45:50 And then the next one, as Brian talked about, will be that sidetrack at at Royston so we can get back down into the intermediate and, see what's going on there. But at the same time, you know, the quickest production adds and the the highest netbacks are gonna be around the infrastructure that we'll have in place by the end of the year, which is that Cascadero facility, TOUHO. You know, the advantage of having all that pipe in the ground now in those those facilities with excess capacities as we drill wells that come on very quickly. With the EIA, we don't have to go back for a bunch of applications at Cascadero. We can basically bring those, you know, those additional eight wells if they're successful on production. So, you know, that that sounds like a very roundabout way to answer that question. But when we're ready to go, the first wells will be the sidetrack at at Royston and the two Carrera wells once we get going. But we're hoping after that, it basically is just a continual drilling program.

46:42 And when we come back to talk to you next year, we'll be talking about the development we've been doing at Oritwa, the development we've been doing at the Legacy Cross specs, and then maybe a couple of, exploration wells along the way. But remember with that five year extension, there's there's absolutely no pressure on us, to do the, exploration wells right away. So we can we can kind of high grade. You know, it's one of the first times that the company's really been in a position where we can high grade some of the assets. You know, we can now pick and choose those that give us the better rates of return, and that's that's obviously when our focus will be. That's great. Thanks, Paul. And I think next two questions really relate to what is the potential of Royston Deep and might you sidetrack Royston one, and what is the plan for the development of Royston? Again, I think some of this we've actually covered off just previously and through the presentation.

47:28 Next one we've got here, a lot of the drilling has had downhole issues over the last few years, which has caused delays. What are you doing to correct these? Yeah. That's a great that's a really great question. And and so it's it's correct. We have a bunch of issues, and I'll I'll I'll take I'll say that part of that, you know, we've now minimized. We brought in some additional expertise, from around the world and and in Trinidad, and we've also brought in equipment. We have a a new drilling rig that's really designed specifically for doing this kind of work in the Oritwai area. That's the the the Star Valley rig that we brought in. But I I don't want anybody to underestimate, how complicated drilling is in Trinidad. It is a very difficult place to drill. And if you wanna look back, you can look back at Exxon, Talisman, you know, even these shell wells that we're keying off on the Orotois Block. The main reason most of them never got tested is they got stuck downhole, left fish in the hole. They lost the wells. So, you know, we've got some pretty big guys that have had similar problems to us. We're gonna improve it. You know, I think we we recognize that's an issue, but, but it's, it's a challenging area. But we I think with the new equipment that we have, some new methodology, quite frankly, what we've learned, I think we're in a really good position to minimize that going forward.

48:47 Well, perhaps we'll take a couple more of the presubmitted ones because I see you've got quite a number coming through during the meeting itself as well. Next one we've got here is what is the funding plan for the activity? Will it involve an extra issuance? When might you pay a dividend? Yeah. Scott and I you know, this is a continual continual discussion. I I I know it's a question that we have, but the the funding part, you know, we we specifically, fully drew the available credit at the end of the year last year. So we got lots of cash on the balance sheet to get these two projects on, and that is our focus. That that is what we're doing. It's it's that simple because once once those come on stream, you know, we get a significant amount of cash from day one, and that then funds the project. And that's just the logical thing for us to do. On the dividend side, you know, we talk about that at the board. We talk about it in management.

49:37 And the real trade off is gonna be, do you wanna pay part of the dividend, or do you wanna take all the cash and invest in the opportunities that that Lynn and Xavier and the whole team have put together? I think you you've seen the the potential and the opportunities as we go forward. So let us get to stage one, which is on production, and then we'll talk about it. But, you know, the model definitely kicks out excess cash flow, probably more than we can spend on the island. So the dividend is the the logical, the logical outcome down the road for sure. That's great. And the final one we've got here is can you talk us through the Trinidad fiscal terms? Yeah. I I would suggest the answer my answer to that is no because we don't have enough time, and we wouldn't have if we if we use the whole hour. But I'll I'll I'll maybe just hand it over to Scott, and he can just give you a real sort of quick thought on that.

50:27 Sure. My my short answer is it's complicated, especially, you know, for a small E and P company such as ourselves. But high level, I'll start with royalties. Any hydrocarbon produced in Trinidad is subject to 12 and a half percent crown royalty, we'll call it. That's our legacy oil blocks and our our or to our property. We do pay an additional royalty to Heritage on our legacy oil blocks only, and that is because we essentially sublicense those lands from Heritage who is licensed from the government. So legacy oil properties, we anticipate about 35 all in royalty, at these higher oil prices. And like I said, with Orator, it's only 12 and a half percent going forward on any product. We also have an SPT tax, which I'm sure most investors are aware of, and that is calculated quarterly and only applicable to oil and natural gas liquids. So it's not applicable to gas in Ortoire.

51:27 It's calculated quarterly based on your average realized price. And once you get over $75, there's a 18% tax, which is calculated on your revenue less your royalties. So it does kick in, and we are subject to that tax, especially in this quarter as as the crude oil prices increase. There are credits offsetting that. So 25% of our, allowable drilling credits, can go against that tax. So for instance, the, three well program we did, we did in q four, those, those pools are actually allocated towards our q one SPT, so we do have a reduction there based on on drilling. So I will, I will just, I guess, just reiterate that it's not on gas in Artoire. And so as we move forward, we can, kinda high grade our product mix or high grade, I guess, our next drilling, what we found, of course, we're gonna produce, but that is the best way to, to ensure we have the optimal tax strategy going forward. And then lastly is that PPT, which is just, I will call it, the standard corporate tax.

52:30 That was calculated annually on an entity basis, and, it would be a typical corporate revenue, less all your expenses, also less your SPT paid, and that's a 55% tax rate. I would encourage any investors if they have specific questions. I'm happy to go through. We do have a lot of summaries that we've used in the past with investors and our and our analysts. So I can definitely reach out to me, and I'll I'll get back to you. That's great. Thanks. Yeah. I think the other thing just to mention on that, twofold on that is, one, there has been a lot of talk in Trinidad that they're gonna change make some changes to the the tax act in the in the first quarter. So I I guess they gotta announce it today if they're gonna do that. But I I I think it's a you know what? I think it's something that the country recognizes there's room for improvement on, so we we may see some changes going forward. But at this point, we certainly haven't built it into any of our models or forecasts. And if it does happen, it'll be a it'll be a positive for us going forward.

53:25 Paul, I think that concludes the pre submitted questions. I can see we have a number of questions that have come through, I think some of which we have actually touched on. We have got a little bit of time to to go. So if I could charge you to click on that q and a tab. And, of course, the company, if we don't get around to responding to every question, we'll have the ability to review those questions, and we'll publish responses where appropriate to do so on the investor meet company platform. And, Paul, if I may just ask you to click on q and a and just read out the question or or direct it to to a member of the team where appropriate, please. Sure. There's a question here that is, what's the history of the Caramet Sands in Trinidad and the Trinidad Fairway? Maybe I'll turn that over to, Xavier and Lynn if if one of you just wanna touch on that very quickly. That's the the prospect at Steelhead that we're kinda targeting there. And we did see it uphold in the Royston well as well. But, Xavier, will you maybe touch on that or Lynn, whoever is best suited?

54:13 Yes. So the car match sands, they've been they've been noted in in previous wells, South of the Barakpo area, like, Saparia, Southern area. They produce out in the Palatto East area and as far south as the Antilles Innis sort of area, which is, like, Southwest Of Ottawa. Right? So they have they have produced in the past, and and they're they're understood to be thinner than the Herrera, but laterally, potentially extensive. Thanks, Seth. One of the other questions in here is in the future, will you be using two drill rigs to drill future wells? I I think the the short answer to that is yes. We've been looking at that because they're so geographically, far apart Orotois and our legacy prospects.

55:02 I think in the future, what you would see is one rig, being used down the legacy lands as we need it and then a continual drilling program for the bigger rig, up at Orotois, which would be, you know, sort of jumping around between Coho, Cascadura, Royston, and then the odd exploration well in the middle of there. So that program will just be prioritized on where we get, where we get the approvals on what we're what we're looking at doing. Yeah. There's another question here about, sorry. Will CASB and C target new gas pools, or is it in the existing gas pool? And maybe, Brian, you could just touch on that with the way we dealt in and the engineer in the reserve report. Sure. So so, yeah, as noted, the the CASB and c sites are are spaced across the structure. So all the wells off those sites would target the the existing structure. However, we do have a couple wells off of c that actually will will push boundaries out for the the book structure.

56:04 So there is potential for, obviously, reserve growth over time as we continue to step out and and prove up thickness of the the structure with each well. Thanks, Brian. Then Ian sent in a question here. It says, has EMA requested further information regarding the submitted EIA that may lead to any delays in authorization. It's a it's a great question. We we had a fulsome discussion on that last week. And maybe, Raya, you could just kinda walk through what the what the EMA was telling us last week on sort of how that process works up to the to the May deadline that James had put out. Sure. If they do ask for any further information, the time frame that they've allotted to give us feedback, we would be able to give them back any information that they require and still meet the eighty working day deadline that the law holds.

57:02 So that way, there shouldn't be any delays even if they ask for any further information on the EIA. To date, we haven't received anything back as yet. Thanks, Rhea. The other the other question around the EIA was around the stakeholder meetings that we had and what was the input around the stakeholder meetings. And, I'll I'll just jump in here, but if if anybody has anything to add, we did have a number of different stakeholder meetings. And there was the real the real main concern was local content and employment in the area. And I think it's fair to say that we've done our best on that. And as these wells come on production, we'll even see more employment in the area from a point of view of, we're looking to hire a number of local operators for all the facilities, which also means, security, you know, maintenance, all of those things in the area. So that that will get that added on. That was probably the biggest issue and probably our biggest challenge in what we do, out in that particular area when we take a look at that.

58:05 Paul, I I think we covered off most of the other questions. There is one more here. I'm just I'll maybe turn this back to to James. That is, will the Royston Sidetrack test the subthrust? Is the Cascadura subthrust still a target of interest? The subthrust is definitely a target of interest at Coho, at Royston, at Cascadura, at Chinook. It's it's tremendously good quality reservoir. It typically, it based on pit al barric pour, it's some of the most productive reservoir. And specifically, roistered with the sidetrack. My answer to that would be it depends how things are going. One of the challenges with a sidetrack is you don't have a ton of flexibility with with how you can steer it. You're pushing the envelope a little bit with with how your casing is. So we're very comfortable we have a program to get down to the to the bottom of the intermediate sheet.

59:05 If we're in good shape as we drill, you know, there's an opportunity to take a look at it. But we also have the Royston Deep well that really is focused on trying to hit that subthrust sheet at the optimal position. That's just one of the challenges I think that that the team has kinda highlighted throughout the the drilling program that we've had is there's been compromises, and frankly, we'd like to avoid compromises going forward and just target the best possible reservoirs and and best possible locations in these structures. Thanks, James. One other question was in here. Can you elaborate on produced water from geological standpoint at Royston one? Yeah. I I I know this has sort of spooked the markets a little bit on the water cut, and I think, you know, we've taken a transparent approach where we're we're, you know, disclosing all the water cuts.

59:53 But when you look at all of the oil produced in Trinidad, it's there's always a water cut. We have it on our legacy properties. We have it everywhere. So this is really not unusual. And as a matter of fact, in what we're seeing at Royston one, both in the sub in the intermediate and the overthrust sheets are completely consistent, with the penal Barrick pour pool. It's done over a 100,000,000 barrels. So I know I know the market has kinda taken that as a as a negative, but that's just the reality of Trinidad. So the the the key here is to deal with the water production, as it comes up. And we're, you know, we're gonna design it so that we've got facilities to reinject the water right from day one. And as James just said, we'll we'll obviously target those thrust sheets and, those points in the structure that are highest up to get us away from from the water. And as Brian also mentioned early in the presentation, we think there is some ways to be more selective in what we perforate in each one of those zones and stay away from maybe some of the faults or some of the sands that aren't as as hydrocarbon charged. So, you know, I think the real takeaway from Royston is Royston was an exploratory well on a very large structure that has now proved up, two sheets that have have hundreds and millions of barrels of oil in them. And, and now we can go back and and work them up on an exploration basis and a facilities basis.

1:01:12 So, you know, I think that's a long winded answer to the question on the water, but we're trying to be fully transparent here, in what we're doing. Feeling like we maybe are getting penalized a little bit for it, but we need to educate the market and shareholders that this is completely normal in Trinidad. This is nothing out of the ordinary for sure. The other one question here, and then I'll maybe turn it back to Paul, is can you clearly state when you will continue drilling and in what order in 2022? The short answer is no. And the reason for that is we really wanna make sure we've got that EIA, approved, before we start to, make commitments on the drilling front. And and that is just simply a matter of managing the balance sheet, so that, so that we've got the cash to be able to do this, without without doing any more equity. Right? I mean, that's that is the plan. That's what we've talked about all the way along. So, as soon as we've got that EIA, as soon as Scott's comfortable, as soon as we, know, we've got the green light to do everything that we wanna do, and we know that all all of our our mainly our Cascadura date is firm. The Coho date is solid.

1:02:16 Once we know that Cascadura date is solid, then we'll be able to put the plan in place. And it's gonna likely kick off with with Gur and and Royston. That'll be where we'll go to next for sure. That's fantastic. Turn it back to you. There's a bunch more questions here I didn't get to, but we'll get back to them if we can. Absolutely. And and thank you and the team for answering as many questions you can in the time. Of course, as Paul said, the team will be able to review all those questions with public responses where appropriate to do so. Paul, I am conscious of time, but if I may just a a last couple of comments from you just before I redirect investors to give you some feedback, that'd be wonderful. Yeah. I really appreciate that, and I I hope everybody got an opportunity today to to get a real feel for how busy we are. I mean, there's a lot of things going on when we look at that, you know, even the Cascadura project itself. I mean, we're a a fairly, lean company, building a 200,000,000 a day gas, gas facility, condensate lines, pipelines.

1:03:13 You know, we're preparing drilling locations. We're building roads. We're doing all of those all those things. So, you know, as I said, it's maybe not as exciting as some of the exploration stuff that we've done in the past, but, that's really what our focus has gotta be is to get to get that done. I hope you also got an opportunity to to see the talent and the depth and the team that we've got. It's a it's a really exciting team. It's it's fun to be part of this, and it's really, it's really a great opportunity. And I I hope that that comes across a little bit, in the presentation today. So thanks for your time today, to listen to the, the TOUCHSTONE story. Appreciate it. Paul, thank you very much, indeed. Thank you to the wider team for your presentation updating investors today. Can I please ask investors not to close the session as you'll be automatically redirected to provide your feedback in order that the team can better understand your views and expectations?

1:04:01 This will only take a few moments to complete and will be greatly valued by the company. On behalf of the management team of TOUCHSTONE EXPLORATION INC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.