Touchstone Exploration Inc. (LON:TXP) has reported its operating and financial results for the three and six months ended June 30, 2023.
Selected information is outlined below and should be read in conjunction with our June 30, 2023 unaudited interim condensed consolidated financial statements and related Management’s discussion and analysis, both of which will be available under our profile on SEDAR and on our website (www.touchstoneexploration.com). Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.
Paul Baay, President and Chief Executive Officer, commented:
“I am pleased to provide an update on our financial and operational results for the second quarter of the 2023 financial year. The results come as we continue to focus our efforts on the commissioning of the Cascadura facility and completing production testing at Royston-1X. We look forward to providing shareholders with further updates in the near term.“
Second Quarter 2023 Financial and Operational Highlights
· Achieved quarterly production average volumes of 1,827 boe/d, representing a 29 percent increase relative to the 1,420 boe/d produced in the prior year equivalent quarter.
· Natural gas production from our Coho-1 well averaged net volumes of 4.2 MMcf/d (703 boe/d) in the quarter and contributed $811,000 of net natural gas sales at an average realized price of $2.11/Mcf.
· Realized petroleum and natural gas sales of $7,181,000 compared to $12,596,000 in the 2022 comparative quarter, as $811,000 in net natural gas sales were offset by decreased crude oil sales of $6,226,000, reflecting a 36 percent decline in realized crude oil pricing and a 21 percent decrease in crude oil production.
· Generated an operating netback of $2,826,000, representing a 51 percent decrease from the 2022 equivalent quarter primarily attributed to the 43 percent decline in petroleum and natural gas sales.
· Reported funds flow from operations of $6,000 in the quarter compared to $803,000 in the preceding quarter and $1,150,000 in the prior year equivalent quarter.
· Recognized a net loss of $71,000 ($0.00 per basic share) and comprehensive income of $136,000 in the quarter compared to a net loss of $262,000 ($0.00 per basic share) and a comprehensive loss of $529,000 reported in the same period of 2022.
· $5,135,000 in quarterly capital investments primarily focused on expenditures related to the construction of the Cascadura natural gas and liquids facility and two Royston-1X production tests.
· Amended our Trinidad based loan agreement in May 2023, allowing for an additional $7 million revolving loan component that was fully drawn in June 2023 to provide liquidity while we complete construction of the Cascadura facility.
· Exited the quarter with a cash balance of $10,138,000, a bank debt principal balance of $31,000,000 and a net debt position of $28,913,000.
Financial and Operating Results Summary
| Three months ended June 30, | % change | Six months endedJune 30, | % change | |||
| 2023 | 2022 | 2023 | 2022 | |||
| Operational | ||||||
| Average daily production | ||||||
| Crude oil(1) (bbls/d) | 1,124 | 1,420 | (21) | 1,204 | 1,408 | (14) |
| Natural gas(1) (Mcf/d) | 4,215 | – | n/a | 4,667 | – | n/a |
| Average daily production (boe/d)(2) | 1,827 | 1,420 | 29 | 1,982 | 1,408 | 41 |
| Average realized prices(3) | ||||||
| Crude oil(1) ($/bbl) | 62.26 | 97.48 | (36) | 63.64 | 90.61 | (30) |
| Natural gas(1) ($/Mcf) | 2.11 | – | n/a | 2.12 | – | n/a |
| Realized commodity price ($/boe)(2) | 43.19 | 97.48 | (56) | 43.64 | 90.61 | (52) |
| Production mix (% of production) | ||||||
| Crude oil(1) | 62 | 100 | 61 | 100 | ||
| Natural gas(1) | 38 | – | 39 | – | ||
| Operating netback ($/boe)(2) | ||||||
| Realized commodity price(3) | 43.19 | 97.48 | (56) | 43.64 | 90.61 | (52) |
| Royalties(3) | (12.94) | (34.97) | (63) | (12.98) | (31.80) | (59) |
| Operating expenses(3) | (13.25) | (17.52) | (24) | (12.61) | (17.35) | (27) |
| Operating netback(3) | 17.00 | 44.99 | (62) | 18.05 | 41.46 | (56) |
| Financial | ||||||
| ($000’s except per share amounts) | ||||||
| Petroleum and natural gas sales | 7,181 | 12,596 | (43) | 15,657 | 23,092 | (32) |
| Cash from operating activities | 2,975 | 3,533 | (16) | 3,888 | 3,883 | – |
| Funds flow from operations | 6 | 1,150 | (99) | 809 | 2,593 | (69) |
| Net loss | (71) | (262) | (73) | (350) | (498) | (30) |
| Per share – basic and diluted | (0.00) | (0.00) | – | (0.00) | (0.00) | – |
| Exploration capital expenditures | 4,795 | 2,932 | 64 | 13,545 | 4,806 | 182 |
| Development capital expenditures | 340 | 436 | (22) | 609 | 1,116 | (45) |
| Capital expenditures(3) | 5,135 | 3,368 | 52 | 14,154 | 5,922 | 139 |
| Working capital deficit (surplus)(3) | 10,913 | (346) | n/a | |||
| Principal long-term bank debt | 18,000 | 24,000 | (25) | |||
| Net debt(3) – end of period | 28,913 | 23,654 | 22 | |||
| Share Information (000’s) | ||||||
| Weighted average shares outstanding – basic and diluted | 233,144 | 212,204 | 10 | 233,091 | 211,517 | 10 |
| Outstanding shares – end of period | 233,428 | 212,275 | 10 | |||
Notes:
(1) In the table above and elsewhere in this announcement, references to “crude oil” refer to light and medium crude oil and heavy crude oil product types combined and references to “natural gas” refer to conventional natural gas, all as defined in National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). Refer to “Advisories – Product Type Disclosures” for further information.
(2) In the table above and elsewhere in this announcement, references to “boe” mean barrels of oil equivalent that are calculated using the energy equivalent conversion method. Refer to “Advisories – Oil and Natural Gas Measures” for further information.
(3) Non-GAAP financial measure. See “Advisories – Non-GAAP Financial Measures” for further information.
