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Touchstone Exploration promises “powerful potential catalysts” says broker

House broker Shore Capital had positive comments following this morning's latest well results out of Trinidad.

Touchstone Exploration Inc - Touchstone Exploration promises “powerful potential catalysts” says broker

Touchstone Exploration Plc (LON:TXP, CVE:TXP) promises “powerful potential catalysts” for investors, that’s according to stockbroker Shore Capital, which called today’s latest Trinidad well results “extremely encouraging”.

The oil and gas firm this morning revealed it had completed the final phase of testing on the Cascadura well in Trinidad, with two intervals both flowing above 5,000 barrels oil equivalent per day (boepd).

READ: Touchstone says well result confirms Cascadura’s potential

A 24-hour test, limited by the capacity of surface test equipment, saw the upper section flow at an average of 5,472 boepd while the lower flowed at 5,157 boepd.

Findings of flow and build-up testing suggested that the upper would have ‘absolute open flow (AOF) of 390mln cubic feet per day, while the same test suggested an AOF of 92mln cubic feet per day from the lower.

Touchstone pointed out that analysis of the AOF suggests that it is reasonable to design for an initial production rate between 7,750 to 9,700 boepd, comprising 40 to 50 mln cubic feet of gas and 1,100 to 1,400 of condensate. Additionally, it noted that the Cascadura reservoir appears to be unbounded within the area of investigation, confirming a larger pool than originally anticipated.

Craig Howie, analyst for Touchstone’s ‘house’ broker Shore Cap, in a note, said: “In our opinion, today’s update is extremely encouraging, confirming the strong flow rates previously announced along with an oil pool which is larger than previously anticipated.

“With Touchstone now focused on commercialising its very material gas discoveries in Trinidad and reporting today a sizeable reservoir with excellent production potential, the company confirms today that it expects to spud its Chinook well at Ortoire next month so, with a fully termed GSA in progress and an independent reserves evaluation also scheduled for July, we continue to see some powerful potential catalysts and an excellent opportunity for investors to gain exposure to this leading Trinidadian operator.”

Quick facts: Touchstone Exploration Inc

Price: 124 GBX

Market: AIM
Market Cap: £258.79 m

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