Touchstone Provides Operations & Production Update
CALGARY, ALBERTA -- (Marketwired) -- 04/02/13 -- Touchstone Exploration Inc. (TSX VENTURE: TAB) ("Touchstone" or the "Company") is pleased to provide the following operations and production update.
Highlights
-- Current field estimated production of approximately 2,550 bbls/d.
-- Second quarter field estimated production of approximately 2,000 bbls/d.
-- 2013 exit production guidance of 3,000 - 3,300 bbls/d.
-- Resumption of the 2013 drilling program scheduled for April 8, 2013 with
up to 12 additional wells planned.
In mid-November Touchstone made the strategic decision to suspend its drilling program to focus on two key areas. The first was to improve the production from existing wells and put in place a strategy to deal with mobile sands that were impeding oil production. The second was to secure the required approvals and equipment to assure that upon recommencement of drilling Touchstone would be able to recognize the economic savings associated with a continuous drilling program. Touchstone plans to recommence its 2013 drilling program with rig mobilization beginning April 8, 2013.
Together with improved utilization of existing equipment, the Company has made both personnel and procedural changes to increase production from existing wells. Touchstone refers to this as duty factor and has seen an almost two-fold increase from approximately 48% in December 2012 to 80% in March 2013 under the new structure. Based on field estimates, sales production volumes for the period of January 1, 2013 to March 31, 2013 averaged approximately 2,000 bbls/d. Current field estimated production is approximately 2,550 bbls/d.
A number of key properties can be highlighted to explain the significant production increase during a period where no new wells were drilled. The WD-4 property, which was acquired in November 2012, has been integrated and is presently producing in excess of 645 bbls/d based on field estimates. The WD-8 property has now exceeded production volumes of 980 bbls/d based on field estimates due to an improved duty factor and full utilization of the coil tubing unit over the past 90 days. The main focus of the coil tubing unit has been the cleanout of sand filled wellbores along with perforation washes that have proven highly successful. The other property of note is Fyzabad where the Company drilled two wells in late October that now have current combined field estimated production of 200 bbls/d. As a result of the success of the production optimization program, the Company has now increased its field estimated September 30, 2013 exit production guidance to between 3,000 and 3,300 bbls/d.
In addition to the four wells drilled in the first quarter, the balance of the 2013 drilling program will include up to 12 additional wells drilled before the end of Touchstone's fiscal year-end of September 30, 2013. The Company plans to begin with two shallow development wells at Fyzabad drilled to depths of approximately 2,200 feet. The program will then move to the WD-8 property to drill two wells targeting the Cruse formation. The program will then proceed to the Coora block for a minimum of two wells before returning to the WD-4 and WD-8 properties. Ron Bryant, Touchstone's President and COO said "it is exciting to see the drilling program get back underway and the success that we have achieved on the production front is very encouraging for the 2013 and 2014 programs".
Touchstone has received approval of a Certificate of Environmental Compliance ("CEC") from the Environmental Management Authority for up to 50 future drilling locations and related facilities on its WD-8 property. This brings the Company's total number of CEC approved drilling locations to over 110 across all of its developed properties. A CEC is an important step in securing regulatory approval for future drilling locations and will ensure that the Company has an ample inventory of executable projects as it moves into future drilling seasons.
Touchstone is looking forward to evaluating the Trinidad onshore bid round opportunity that is scheduled to close mid-year. The government of Trinidad and Tobago is making available three onshore exploration parcels, some of which are adjacent to existing Touchstone acreage.
Touchstone and its partners continue to eagerly await the final renewal of the East Brighton off-shore licenses. No formal date has been set by the government, but the Company anticipates receiving the renewal in the first half of 2013.
Touchstone Exploration Inc. is engaged in the business of acquiring interests in petroleum and natural gas rights, and the exploration, development, production and sale of petroleum and natural gas internationally. The Company is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company's common shares are traded on the TSX Venture Exchange under the symbol "TAB". Please see the latest corporate presentation on the Company's website at www.touchstoneexploration.com.
This news release is not for distribution to United States newswire services, should not be disseminated in the United States and does not constitute an offer to sell or a solicitation of an offer to buy any securities in the United States. The securities of Touchstone Exploration Inc. have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.
The companies in which Touchstone Exploration Inc. directly and indirectly owns investments or assets are separate entities. In this news release "Touchstone" is sometimes used for convenience where references are made to Touchstone Exploration Inc. and its subsidiaries in general.
READER ADVISORY
The information herein contains forward-looking statements and assumptions. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and other similar expressions. Statements relating to "reserves" and "resources" are deemed to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and can be profitably produced in the future. Such statements represent the Company's internal projections, estimates or beliefs concerning future growth, results of operations based on information currently available to the Company based on assumptions that are subject to change and are beyond the Company's control, such as: production rates and production decline rates, the magnitude of and ability to recover oil and gas reserves, plans for and results of drilling activity, well abandonment costs and salvage value, the ability to secure necessary personnel, equipment and services, environmental matters, future commodity prices, changes to prevailing regulatory, royalty, tax and environmental laws and regulations, the impact of competition, future capital and other expenditures (including the amount, nature and sources of funding thereof), future financing sources, business prospects and opportunities, among other things. By their nature, forward-looking statements are subject to numerous known and unknown risks and uncertainties that could significantly affect anticipated results in the future and accordingly, actual results may differ materially from those predicted. Although the Company's management believes that the expectations and assumptions reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations and assumptions are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies.
The Company is exposed to numerous operational, technical, financial and regulatory risks and uncertainties, many of which are beyond its control and may significantly affect anticipated future results. Operations may be unsuccessful or delayed as a result of competition for services, supplies and equipment, mechanical and technical difficulties, ability to attract and retain qualified employees on a cost-effective basis, commodity and marketing risk and seasonality. The Company is subject to significant drilling risks and uncertainties including the ability to find oil reserves on an economic basis and the potential for technical problems that could lead to well blowouts and environmental damage. The Company is exposed to risks relating to the inability to obtain timely regulatory approvals, surface access, and access to third party gathering and processing facilities, transportation and other third party related operation risks. The Company is exposed to risks related to recent acquisitions including unforeseen difficulties in integrating acquired companies, properties, personnel and infrastructure into the Company's operations; the outcome of litigation brought against the Company or acquired companies or other disputes involving the Company or any acquired companies; or the failure generally to realize the anticipated benefits of such acquisitions. The Company is subject to industry conditions including changes in laws and regulations including the adoption of new environmental laws and regulations and changes in how they are interpreted and enforced. There are uncertainties in estimating the Company's reserve base due to the complexities in estimated future production, costs and timing of expenses and future capital. The financial risks the Company is exposed to include, but are not limited to, the impact of general economic conditions in Canada and the Republic of Trinidad and Tobago, the ability to access sufficient capital from internal and external sources, changes in income tax laws or changes in tax laws, royalties and incentive programs relating to the oil and gas industry, fluctuations in natural gas and crude oil prices, interest rates, the U.S./Canadian dollar exchange rate and the U.S/Trinidad and Tobago dollar exchange rate. The Company is subject to regulatory legislation, the compliance with which may require significant expenditures and non-compliance with which may result in fines, penalties or production restrictions or the termination of licence, lease operating or farm-in rights related to the Company's oil and gas interests in Trinidad and Tobago.
Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and as such, undue reliance should not be placed on forward-looking statements. Readers are also cautioned that the foregoing list of factors and assumptions is not exhaustive. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Additional information on these and other factors that could affect the Company's operations and financial results are included elsewhere herein and in reports, documents and disclosures on file with Canadian securities regulatory authorities and may be accessed on SEDAR.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.
Contacts:
Touchstone Exploration Inc.
Mr. Paul Baay
Chairman & Chief Executive Officer
(403) 992-8407
Touchstone Exploration Inc.
Mr. Ron Bryant
President & Chief Operating Officer
(403) 992-8407
www.touchstoneexploration.com
