Touchstone Exploration Inc exited the first quarter of 2024 with a cash balance of US$9,537,000 and a net debt position of US$27,621,000, resulting in a reduced net debt to annual funds flow from operations ratio of 1.45 time.
In its quarterly financial and operating results, the Calgary-based energy company said it achieved average quarterly production of 7,015 boe/d (80 per cent natural gas), representing a 228 per cent increase from first quarter 2023 average production volumes of 2,139 boe/d (40 per cent natural gas).
However, first quarter of 2024 production decreased by 18 per cent relative to 8,504 boe/d produced in the fourth quarter of 2023 (79 per cent natural gas), mainly reflecting natural declines from its Cascadura field.
“Since coming onstream in September 2023, the Cascadura field has transformed Touchstone both operationally and financially, having contributed an estimated US$20 million in operating netbacks, ahead of tying in the two further successfully drilled development wells from the surface location.
“Initial decline rates on our two producing Cascadura wells have been steeper than we first expected, but we are learning more about the reservoir for further exploitation. We are maintaining our full-year guidance given production increases are heavily weighted towards the fourth quarter of 2024,” Touchstone’s president and chief executive officer Paul Baay said.
Touchstone realised petroleum and natural gas sales of US$16,584,000 compared to US $20,759,000 in the fourth quarter of 2023.
The Cascadura field production volumes in the quarter contributed US$6,961,000 of net natural gas sales at an average realized price of US$2.49 per mcf and US$1,657,000 of net NGL sales at an average realized price of US$69.59 per barrel.
Touchstone noted that achieved quarterly funds flow from operations of US$6,142,000 in the first quarter of 2024 compared to US$10,489,000 in the preceding quarter.
The energy company said delivered net earnings of US$3,628,000 (US$0.02 per basic and diluted share) and US$11,962,000 in quarterly capital investments primarily focused on expenditures directed towards one CO-1 crude oil development well and two Cascadura development wells and progressing construction on the flowline from the Cascadura C surface location to the Cascadura natural gas processing facility.
In its post-period end highlights Touchstone said it successfully drilled and cased the CO-375 development on its CO-1 block, with open hole logs and drilling data indicating a sand thickness of approximately 530 feet in the Forest Formation and approximately 625 feet in the Cruse Formation.
In April, the company executed a third amended and restated loan agreement with its existing lender providing for an additional US$13 million of bank debt capacity, which will be used to finance its previously announced initial 2024 capital programme.
Also earlier this month Touchstone announced that it reached an agreement with the board of directors of Trinity Exploration and Production Plc on the terms of a recommended all-share acquisition.
