Touchstone Exploration Inc (LON:TXP) Chief Executive Officer Paul Baay caught up with DirectorsTalk for an exclusive interview to discuss fantastic results at the two wells at Cascadura, the recently acquired Rio Claro block, drill-to-fill strategy, and when investors can expect to hear about drilling and CapEx plans for 2025.
Q1: Paul, some fantastic results today from two wells of your Cascadura field. Could you just talk us through what they mean and the work that the team has been conducting over the last week to achieve these results?
A1: I think there’s a bunch of things that that are really significant about this. So, we brought the wells on stream about a week ago and the idea was to test them individually and what we see today is the results of those of those tests.
The first one was a development well that we drilled into our Cascadura pool, far eastern side of it and it’s tested as well as the best well we’ve drilled so far to date, and almost 5,000 BOEs a day equivalent, and that came on stream actually yesterday so it’s now on continuous production. That really delineated the eastern side of the pool and now what we can do is drill development wells in between that and the original wells we drilled.
The second well, the Cas-3 well, it was a well that crossed into new acreage what we call crustal fault and the real exciting thing about it is that it tested beautiful light oil flowing to surface, against 700 pounds of resistance that the plant runs at, really, really a spectacular well.
There’s a couple of things that does is oil is very valuable in Trinidad, so we can make some good cash on it, but the other part of it is that it sets up for additional drilling up-dip from that well onto our new block that we announced last Monday, which is the Rio Claro block.
So, a lot of things wrapped up in those two test results, but really encouraging both on the development and the exploration side.
Q2: You talk about the new oil and gas play that’s been opened up by these results and the recently acquired Rio Claro block. Could you give us a bit more information on that?
A2: It’s really an exciting piece of business for us, and we haven’t been able to talk about it really at all until today, and over the next couple of months, I think people will understand the story a little bit more and we’ll roll it out a little bit more.
This is literally right next to the well we just drilled and we had a big 3D seismic that we already had over it, that particular block, the Rio Claro block. So, what this well does is it shows us that there’s hydrocarbon onto that block and everything moves up structure as you move onto the Rio Claro block. We’ve got a great map of that in our corporate presentation on page 27.
What it really does is we now sit right in the middle of this fairway of oil and gas and this well has really, quite frankly, proved up more than we would have imagined. We’re basically at the lowest spot where we drilled this well, everything from here is up dipped. I think it’s the beginning of what’s going to turn into a pretty exciting development oil play. On top of that, in some of the sheets over top of that, the additional sheets that we see that go over to Rio Claro, there’s still this gas development that we have at Cascaduras.
So, it’s a multifaceted exploration development programme that we now have.
Q3: Should investors expect more of this drill-to-fill strategy that you’ve outlined? And if so, where do you envisage targeting next?
A3: That drill-to-fill is really the Cascaduras gas plant, we just ramped that up, it’s now capable of a capacity of about 140M cubic feet a day. Today, we’re putting through north of 40M a day with basically the 3 wells we’ve got on stream and the drill-to-fill strategy is to get that up somewhere between 100M and 140M.
Now what we can do, because we drilled on the eastern side of this structure, is we can go back and start to do development wells in the middle and the first one of those wells, hopefully we’ll get subject to weather and everything else, should be drilling in December. So, we’ll get a good well down in December, a well down in January, and then go forward from there.
In answer to the question of the drill-to-fill, that’s our target now, all the infrastructure’s built, the rig’s sitting right there, we’ve got the locations built, this really looks like an outstanding couple of wells that proves out the programme so we can now go forward.
Q4: When can investors expect to hear more from you in detail on drilling and CapEx plans for 2025?
A4: On the drilling front, we built a new infrastructure in the back that consisted of pipelines and a roadway. The one piece of the roadway that we haven’t been able to get quite done yet is the bridge that goes over the Poole River, and part of that is we were building during wet season and we’re just heading into dry season now again. So, we’ll get that bridge done. As soon as that bridge is done, we’ll move the last pieces of the rig over to where we need to get it drilled.
So, we’re hoping to move that in November, I think that’s still the plan by the end of November, have it moved over there, which means we could drill in December. So, we get one well in December, then probably another well in January and February so that’s the drilling plan that we have from that point of view.
As far as the 2025 forecast, we’ll actually be putting that out following our strategy session, which will be probably the week of December the 9th, and we’ll lay out the 2025 numbers. By then, we’ll have a good idea of where we are with the existing wells, existing production, and that’ll give us a good base for 2025.
