Could the Ortoire Block deliver 1 trillion cubic feet of gas for Touchstone Exploration

By Mark Sheridan


In this article

  • Loading...
  • Want to see what you should be buying? Check out our top picks.

Oil and gas explorer, producer, and developer Touchstone Exploration (LSE:TXP) is moving quickly to exploit its latest major natural gas find in Trinidad and Tobago. 

Oil and gas explorer, producer, and developer Touchstone Exploration (LSE:TXP) is moving quickly to exploit its latest major natural gas find in Trinidad and Tobago.  

On 14 October, the company reported that it had hit “significant hydrocarbon accumulations” far above expectations at its Chinook-1 well on the island, sparking a 25% jump in its share price.

The news marked Touchstone’s third major discovery since kicking off drilling on its highly prospective Ortoire block a little over a year ago. Confidence is now at an all-time high both inside and outside the company. 

At writing, Touchstone was trading with a £196 million market cap, some 730% higher than this time last year.

However, CEO Paul Baay sees more upside on the way. Speaking exclusively to ValueTheMarkets he told us that Chinook

proves our overall model and goes a long way to de-risking future plays across the Ortoire Block”.

Ortoire – six years in the making 

It was only in August 2019 that Touchstone revealed it was fully funded and ready to begin its ambitious four-well exploration programme at Ortoire. At the time, Baay said it made “no sense” to dilute early investors through an equity placing, given that the company’s $11 million cash balance meant the company had the funds to embark on its game-changing campaign. 

The Coho, Cascadura, Chinook and Royston wells were designed to prove the commercial potential of the block. The fact Touchstone has now hit three for three out of the park is the reason why the market now sees so much more potential upside here. 

After all, the firm’s original six-year exploration and production license over the block gives it an option to extend its 80% ownership by 25 years upon commercial discovery. In short, this really is a long-term play.

Touchstone’s first well, Coho-1, started its run of Ortoire successes. A spectacular late-2019 discovery supported initial production rates of 10-12 million cubic feet of natural gas per day. It’s now understood that revenues will begin to flow from here by year-end.

After Coho came Cascadura-1ST1. This well discovered a structure that could hold between 241.2 and 571.5 billion cubic feet of natural gas for a net present value of anywhere from US$287.7 million to US$519.2 million.

And now, Chinook-1 has added another enormous layer of potential to the block. Touchstone’s engineers are currently weighing up as many as 21 separate prospects to attack around the block.

“As a result of the latest successful discovery at Chinook, our confidence in the Ortoire Block is growing,” Baay told us. “We encountered thick, oil-bearing sands higher than anticipated and are now in a position to reinterpret the entire block. We could be looking at 1 trillion cubic feet of gas by the time we are done. This is a very exciting time for the company.”

Next steps 

The completion and testing of Chinook-1 are expected to begin in Q1 2021. In the meantime, Touchstone is mobilising its rig back to Cascadura to drill Cascadura Deep. This marks a significant expansion of the Cascadura discovery area and is expected to be in place before the end of this month. 

Touchstone is returning to this prospect because its first well was sidetracked to investigate a new opportunity discovered during the drilling process. Cascadura Deep will re-asses the original target, drilling down even further than the total 6,350ft depth hit by Cascadura-1ST1, to test new potential oil horizons.

What is particularly exciting about this well is that it is a hybrid crossover between development (30%) and exploration (70%) well. This goes a long way to de-risking the drill, while providing a huge possible new prize.

Moving beyond Cascadura Deep, and the truly exciting thing about Ortoire is that Touchstone has not even broken ground on its largest target yet. 

Royston, the firm’s final exploration well, could dwarf everything the company has achieved so far. Here, Touchstone is targeting a deep gas prospect with an estimated target depth of 11,500ft where wireline logs have indicated about 700ft of gas to exploit.

With Royston lying along the same geological trend that houses the Coho-1 and Cascadura-1ST1 discoveries, the prospect of another enormous hit is enticing. 

In our call, Baay confirmed that Touchstone plans to broaden its scope and approach many Ortoire targets that have never been drilled once its initial exploration campaign is complete.

“We believe we now have as many as 21 separate prospects and could be looking at 1TCF of gas by the time we are done.

The wells we have drilled at Ortoire so far (Coho-1, Cascadura-1 & Chinook) have been offset wells, from wells drilled previously in the 1970s. As a result of the latest successful discovery at Chinook, our longer-term plan is to drill our biggest target at Royston next year.

After that we expect to broaden our target range significantly to include prospects that have never been drilled. We could have as many as 21 of these to pursue. This is a very exciting time for the company.”

So, with much more to explore after such an exceptional start, Touchstone really could have only scratched Ortoire’s surface.

There’s no question that the company has come a long way from its £18 million valuation before the Coho discovery nearly a year ago. However, its move to a £196 million market cap could be the beginning of an even more impressive journey.


In this article:

Author: Mark Sheridan

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

Digitonic Ltd, the owner of, does not hold a position or positions in the stock(s) and/or financial instrument(s) mentioned in the above article.

Digitonic Ltd, the owner of, has not been paid for the production of this piece by the company or companies mentioned above.

Sign up for Investing Intel Newsletter