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RNS Number : 2856A
Touchstone Exploration Inc.
20 January 2020
TOUCHSTONE ANNOUNCES UPDATE ON CASCADURA-1ST1 WELL TESTING
CALGARY, ALBERTA (January 20, 2020) - Touchstone Exploration
Inc. ("Touchstone", "we", "our", "us" or the "Company") (TSX / LSE:
TXP) provides an exploration update, highlighted by the first stage
of production testing of the Cascadura-1ST1 well on the Ortoire
exploration block, onshore in the Republic of Trinidad and Tobago.
The Cascadura-1ST1 production test was designed to evaluate a
potential oil zone as indicated by cased hole logs. On commencement
of testing, significant pressures and natural gas volumes were
encountered on the clean-up flow. As a result, the Company
suspended testing to bring in the appropriate equipment to measure
high volumes of both natural gas and liquids.
Highlights
-- The initial test interval was completed on January 17, 2020
to evaluate the lowermost 162 foot pay interval between 6,056 and
6,218 feet.
-- The well was opened to test on January 18, 2020 on a 4/64"
choke for a period of 97 minutes with load fluid, hydrocarbon
emulsion and gas recovered at surface prior to shut-in.
-- Shut-in tubing head pressure observed at surface built to
4,200 psi, which we deemed to be higher than current equipment
could safely evaluate.
-- The well is currently shut-in while we mobilize a three-phase
separator and testing package designed to safely evaluate the high
pressures and gas volumes observed upon initial completion.
Paul R. Baay, President and Chief Executive Officer,
commented:
"This is the best possible outcome for the initial test results
from the Cascadura well, as natural gas and liquids have superior
economic value under the Trinidad fiscal regime. Based on the
information acquired while drilling, the thick sand we encountered
in the well appeared to contain oil with some associated gas. It is
now evident that it is likely a liquids rich gas structure. Given
this is only the lowermost 162 feet of pay in the well, these
initial results are extremely encouraging."
Cascadura-1ST1 Well Testing
As previously announced, the Cascadura-1 exploration well
(Touchstone 80% working interest operator, Heritage Petroleum
Company Limited 20% working interest) was sidetracked (ST1) and
ultimately drilled to a total depth of 6,350 feet. Cased hole
wireline logs and drilling samples indicated approximately 1,037
feet of prospective hydrocarbon pay in the Cruse and Herrera
formations at depths between 1,030 and 6,350 feet.
The initial production test of the Cascadura-1ST1 well has been
designed to evaluate the lower 777 feet of prospective pay found in
the Herrera Gr7c formation (5,516 - 6,162 feet) and the Herrera
Gr7a formation (6,162 - 6,350 feet). The test is being conducted in
two stages, with the first test evaluating the interval between
6,056 and 6,218 feet which is the lowermost pay interval isolated
behind a 7" liner.
This first test commenced on January 17, 2020. Surface pressure
of 2,100 psi was observed immediately upon completion and built
rapidly to 3,200 psi over the span of six hours. The well was shut
in overnight with pressure increasing to over 3,400 psi at surface
before the well was opened on a 4/64" choke for a period of 97
minutes. During this initial cleanup period, 64 barrels of load
water were recovered as well as approximately two barrels of
emulsified formation fluid. These liquids were accompanied by
significant gas flow which was too high to be measured with the
onsite testing equipment. Flowing pressure increased to 3,900 psi
during the cleanup test at which point the Company suspended
testing.
The well is currently shut-in while a three-phase test separator
is mobilized and installed which will allow the well to be tested
safely at the high pressure and gas rates observed to date. The
Company expects testing to resume over the next ten days and will
provide further updates when available.
Under the Trinidad petroleum tax regime, all petroleum liquids
are subject to the supplemental petroleum tax ("SPT") which, at
today's oil prices, equates to 18 percent of net petroleum
revenues. Petroleum revenues derived from the sale of natural gas
are not subject to the SPT. Given that the Company presumed the
initial test interval was predominantly oil bearing, the presence
of high volumes of natural gas in preliminary testing is
encouraging.
Coho-1
We are currently surveying the pipeline route for the previously
announced Coho-1 natural gas discovery while working with local
engineering firms on the design of the surface equipment required
to bring the well on production. In parallel, we are drafting the
required permitting documentation to construct the pipeline with
the aim of bringing the well on production by June 2020.
Further Ortoire Exploration
The Company has commenced civil work on the access roads to the
next two planned exploration prospects on the Ortoire exploration
property.
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary based company engaged
in the business of acquiring interests in petroleum and natural gas
rights and the exploration, development, production and sale of
petroleum and natural gas. Touchstone is currently active in
onshore properties located in the Republic of Trinidad and Tobago.
The Company's common shares are traded on the Toronto Stock
Exchange and the AIM market of the London Stock Exchange under the
symbol "TXP".
For further information about Touchstone, please visit our
website at www.touchstoneexploration.com or contact:
Touchstone Exploration Inc.
Mr. Paul Baay, President and Chief Executive Officer Tel: +1
(403) 750-4487
Mr. James Shipka, Chief Operating Officer
Shore Capital (Nominated Advisor and Broker)
Nominated Advisor: Edward Mansfield / Daniel Bush Tel: +44 (0)
207 408 4090
Corporate Broking: Jerry Keen
Camarco (Financial PR)
Nick Hennis / Jane Glover Tel: +44 (0) 203 781 8330
Advisories
Forward-Looking Statements
Certain information provided in this announcement may constitute
forward-looking statements within the meaning of applicable
securities laws. Forward-looking information in this announcement
may include, but is not limited to, statements with respect to the
quality and quantity of prospective hydrocarbon accumulations;
initial Cascadura-1ST1 well test results, the Company's anticipated
timing and completion of the well production test, and the
Company's anticipated development and timing of the Coho-1 well
including potential tie-in and production therefrom. Although the
Company believes that the expectations and assumptions on which the
forward-looking statements are based are reasonable, undue reliance
should not be placed on the forward-looking statements because the
Company can give no assurance that they will prove to be correct.
Since forward-looking statements address future events and
conditions, by their very nature they involve inherent risks and
uncertainties. Actual results could differ materially from those
currently anticipated due to a number of factors and risks. Certain
of these risks are set out in more detail in the Company's 2018
Annual Information Form dated March 26, 2019 which has been filed
on SEDAR and can be accessed at www.sedar.com. The forward-looking
statements contained in this announcement are made as of the date
hereof, and except as may be required by applicable securities
laws, the Company assumes no obligation to update publicly or
revise any forward-looking statements made herein or otherwise,
whether as a result of new information, future events or
otherwise.
Oil and Gas Matters
References in this announcement 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 are not indicative of long-term performance or of
ultimate recovery. Additionally, such rates may also include
recovered "load oil" fluids used in well completion stimulation.
While encouraging, readers are cautioned not to place reliance on
such rates in calculating the aggregate production for the Company.
A pressure transient analysis or well-test interpretation has not
been carried out in respect of the well. Accordingly, the Company
cautions that the test results should be considered
preliminary.
Competent Persons Statement
In accordance with the AIM Rules for Companies, the technical
information contained in this announcement has been reviewed and
approved by James Shipka, Chief Operating Officer of Touchstone
Exploration Inc. Mr. Shipka is a qualified person as defined in the
London Stock Exchange's Guidance Note for Mining and Oil and Gas
Companies and is a Fellow of the Geological Society of London (BGS)
as well as a member of the Canadian Society of Petroleum Geologists
and the Geological Society of Trinidad and Tobago. Mr. Shipka has a
Bachelor of Science in Geology from the University of Calgary and
has over 30 years of oil and gas exploration and development
experience.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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