Shore Capital is acting as Nominated Adviser and Joint Broker to Touchstone Exploration Inc. (“Touchstone” or “The Company”) on its proposed admission to AIM and conditional placing of 20,000,000 shares to raise £1.45 million at 7.25 pence per share.
Touchstone Exploration Inc. (TSX: TXP), the Toronto Stock Exchange (“TSX”) listed oil and gas exploration and production company active in the Republic of Trinidad and Tobago (“Trinidad”), today announces that it is proposing to raise approximately £1.45 million (before expenses) through a private placement (“Private Placement”). A total of 20,000,000 new common shares have been conditionally placed (“Placing Shares”), at an issue price of 7.25 pence (approximately C$0.1276) per Placing Share (“Placing Price”) with new UK institutional investors.
In addition, the Company announces its intention to seek a dual listing by applying for admission of its issued and to be issued common shares of no par value (“Common Shares”) to trading on the AIM market of the London Stock Exchange (“Admission”). Dealings are expected to commence on AIM on 26 June 2017.
The issuance of the Placing Shares is conditional on customary closing conditions, including the Admission becoming effective and the approval of the Private Placement by the TSX.
Touchstone has an experienced management and executive team with a track record of delivering value to shareholders
• Paul Baay, President and Chief Executive Officer of Touchstone, founded True Energy Inc. which increased production between 2000 and 2007 from 350 boepd to 20,000 boepd
• True Energy Inc. then split into Bellatrix Exploration Inc. and Vero Energy Inc.; subsequently Vero Energy Inc. was sold to TORC Oil and Gas Ltd. for approximately C$200 million in 2012
Touchstone is one of the largest independent onshore oil producers in Trinidad, currently producing 1,300 bbls/d
• Operator of approximately 78,000 gross acres of exploration and development rights
Touchstone has a low risk production business model with material upside
• Low finding and development costs: C$7.35 per barrel for proved reserves and C$6.00 per barrel for proved plus probable reserves
• Low operating costs per barrel and low decline rate – resilient in a low oil price environment
• 208 potential development drilling locations and potential exploration upside
Touchstone has a strong reserve base
• Proved reserves of 8.97 Mbbl with an net present value (“NPV”) (10% discount after tax) of C$72.7 million and a reserve life index of 15.1 years
• Proved plus probable reserves of 15.7 Mbbl with an NPV (10% discount after tax) of C$130.7 million and a reserve life index of 24.0 years
• Proved plus probable plus possible reserves of 20.4 Mbbl with an NPV (10% discount after tax) of C$169.0 million with a reserve life index of 28.7 years
• Only 36% of potential drilling locations booked under the proved plus probable case
Touchstone has an active work programme fully funded by existing cash resources
• Initial program for the drilling of 4 new wells and 24 recompletions in 2017
Touchstone has strong financials and operating cash flows
• C$13.0 million of cash as at March 31, 2017
• Operationally cash generative – C$6.1 million of cash generated from operations in FY2016
• C$15 million, five-year term loan with no mandatory repayments of principal until January 2019