Touchstone Exploration (LON:TXP) on Wednesday said light oil had been discovered on the Ortoire block in onshore Trinidad and Tobago, adding a further level of opportunity for the company.
Most recently, Touchstone completed and tested the third interval of the Chinook-1 well and found 35 degree API gravity crude oil. To date, Touchstone has hit hydrocarbons at every one of its Ortoire wells, with the exploration block being the company’s main focus for exploration.
API is a measure of density with a higher API indicating lighter, lower density crude oil. Lighter crude oil, like the oil found at Chinook-1, is more highly valued. Additional evaluation, however, will need to take place to find out the commerciality of this new oil discovery.
The firm holds an 80% interest in onshore block Ortoire, while Heritage Petroleum has a 20% working interest. So far, all three Herrera thrust sheets in Chinook-1 have found light oil, which suggests the structure is mostly oil charged.
The next step for Chinook-1 will be placing it on pump to conduct an extended production test. This will evaluation the reservoir and help guide Chinkook-1’s development. This is set to begin once the service rig at Cascadura Deep-1 has finished its current operations.
Touchstone is planning to form a development plan for oil within the exploration well, focusing on identifying locations in the Herrera sand sheets.
The company pointed out that oil production from Herrera thrust sheets is common along the Herrera fairway in Trinidad. In fact, since discovery in the 1960s, the Penal-Barrackpore Herrera oil pools have cumulatively produced more than 80 million barrels.
Chief executive Paul Baay said:
“This light oil discovery on the Ortoire property provides another level of opportunity for the company and is in line with our original Chinook exploration model which indicated the target was oil charged.”
What next for Touchstone?
After the extended oil test, Touchstone is considering an uphole shallow gas interval in the Cruse formation, or testing a Karamat shale gas prospect that was found when drilling.
Baay acknowledged that some Touchstone shareholders could be “disappointed with oil findings”. However, he stressed that the company’s “view towards gas” evolved only after the Cascadura gas discovery, which is 1.5 kilometres away in a different geological structure.
The chief executive further pointed out that the Chinook results emphasise the potential of the Herrera sands when it comes to light oil, gas, and hydrocarbon combinations.
Baay also stated that Touchstone does not believe the Chinook-1 results will correlated in any way to the upcoming Royston well, targeting a deep gas prospect. Royston is also a separate structure and is located “in a different geological position”.
Wireline logs from the 1960s indicate around 700 feet of gas, though the well has yet to be tested. A primary access road to the Royston-1 well has already been cleared, with road resurfacing and lease building operations already begun.
