Touchstone Exploration’s (AIM: TXP) latest quarter saw its revenues rise by 65% as it took advantage of higher crude oil prices.
The three-month period ending June 2022 saw an increase in petroleum sales to US$12.6mln from US$7.6mln last year, despite a decrease of only 1% in production at 1,420 barrels per hour.
Touchstone (netback), 71% of total sales, rose to nearly US$45 per barrel.
The quarter’s losses were US$262,00. This included US$540,000 to clean up vandalism at one site.
Second Quarter 2022 Financial and Operational Highlights
· Achieved quarterly average crude oil production volumes of 1,420 barrels per day (“bbls/d”), representing a 2 percent increase relative to the preceding quarter and a 1 percent increase from the 1,402 bbls/d produced in the second quarter of 2021.
· Realized petroleum sales of $12,596,000 from an average crude oil price of $97.48 per barrel compared to petroleum sales of $7,586,000 from an average realized price of $59.06 per barrel in the comparative quarter of 2021.
· Generated an operating netback of $44.99 per barrel, a 19 percent increase from the first quarter of 2022 and a 71 percent increase from the $26.30 per barrel reported in the second quarter of 2021.
· Recognized current income tax expenses of $1,547,000 in the quarter compared to $432,000 in the second quarter of 2021, driven by $1,043,000 in supplemental petroleum tax expenses based on our average realized oil price exceeding the $75.00 per barrel threshold in 2022.
· Our funds flow from operations was $1,133,000 in the quarter, which was net of $540,000 accrued for reclamation costs related to the previously announced oil spill which occurred as a result of vandalism in June 2022.
· Recognized a net loss of $262,000 in the quarter compared to a net loss of $284,000 reported in the same period of 2021, reflecting the $540,000 provision for oil spill reclamation costs.
· Capital investments of $3,368,000 primarily focused on facility and pipeline expenditures related to the Coho-1 facility and investments directed to the Cascadura natural gas facility.
· Exited the quarter with cash of $9,425,000, a working capital surplus of $346,000 and $30,000,000 drawn on our term credit facility, resulting in a net debt position of $23,654,000.
Post-Period-End Highlights
· Daily crude oil sales averaged 1,303 bbls/d in July 2022 with a realized price of $89.52 per barrel.
· Preparation for Coho gas facility and pipeline pre-commissioning operations is underway, which will be followed by system commissioning operations to introduce natural gas from the Coho-1 well into the facility and pipeline.
· Received confirmation from the Trinidad and Tobago Environmental Management Authority that determination of our Certificate of Environmental Clearance application for development operations in the Cascadura area will be made by September 15, 2022.
Paul Baay, chief executive said that the team from Trinidad successfully implemented their emergency response plan to Fyzabad’s vandalism. This had minimal impact on the environment or residents but did result in reclamation costs, which we fully incurred for the quarter.
Baay said that this quarter marks the end of an era in Trinidad as a crude oil producer. The next quarter will see a transition to natural gas production from the Coho-1 gas well.
“Our team has kept base production while remaining focussed on our Coho, and Cascadura projects including associated Commissioning Operations and regulatory approvals which are both moving.”
