Trinidad-focused oil & gas firm Touchstone Exploration (LSE:TXP) stormed to an all-time high of 41.8p on Thursday upon revealing “monumental” well-testing results from Trinidad.
The firm said flowback testing of the first stage of the Cascadura-1ST1 on its highly-prospective Ortoire block has completed, confirming a “significant, liquids-rich natural gas discovery”.
The average flowback rate for the well during the final 14-hour test period was 5,180 barrels of oil equivalent per day (“boe/d”). This included 26.9 million cubic feet per day (“MMcf/d”) of natural gas and 694 barrels per day (“bbls/d”) of natural gas liquids.
Meanwhile, Cascadura’s peak flowback rate came in at 5,736 boe/d, including 30.2 MMcf/d of natural gas and 710 bbls/d of natural gas liquids.
Should rates such as this be sustained moving forward, then they will provide a massive boost to Touchstone’s current average daily oil production. This sat at 1,729 barrels a day (“bbls/d”) in the three quarters ended 30 September 2019.
It is also worth noting that these results could increase further yet, with current test results at Cascadura-1ST1 cover only the well’s lowest portion. Alongside this, 450 feet of contiguous sand has not been tested, leaving the potential for further upside in the structure’s full potential.
Meanwhile, Touchstone’s total production also stands to receive a significant boost from the Coho-1 well, also on Ortoire, where modelling in December supported initial production rates of 1,667 to 2,000 boe/d gross.
The significance of these figures has not gone unnoticed by the market in recent weeks. As at writing, following the release of the Cascadura results, Touchstone sits 93.4% higher than it did at the beginning of 2020 with a £48.4 million market cap.
With Cascadura producing a total of 4,770 barrels of oil and equivalent and 670 barrels of natural gas liquids throughout the testing period, Touchstone’s chief executive Paul Baay hailed a “dramatic change” for his firm.
“[The production test results confirm] the monumental resource potential of the Ortoire exploration block following the earlier success of our Coho-1 well,” added Baay. “To put these results in context, our average daily oil production for the three months ended September 30, 2019 was 1,729 bbls/d. The modelling from the final test results at Coho-1 supports initial gross production rates between 10 to 12 MMcf/d per day (approximately 1,667 to 2,000 boe/d) with Cascadura now set to provide a further step change.
“Given these results, the Company will focus on multiple tie-in scenarios in order to maximise economic value. The Ortoire exploration block continues to consistently and dramatically outperform expectations and presents an exciting new opportunity for both Touchstone and the onshore oil and gas industry in Trinidad.”
Cascadura-1ST1 will now be shut-in for an extended pressure build-up survey, which is anticipated to take two weeks. Following this, Touchstone will move on to the second stage of the well’s target “Herrera” formation to evaluate the structure’s full potential.
James Shipka, Touchstone’s chief operating officer, said Coho and Cascadura further prove up the Ortoire block as the firm moves forward with two further exploration wells on prospects called “Chinook” and “Royston”. These will target separate structures along the same geological trend.