CALGARY, March 11, 2020 /CNW/ - Touchstone Exploration
Inc. ("Touchstone", "we", "our", "us" or the
"Company") (TSX, LSE: TXP) provides an exploration update,
highlighted by an update on production testing of the
Cascadura-1ST1 liquids rich gas discovery on the Ortoire
exploration block, onshore Trinidad and
Tobago (Touchstone 80% working interest operator, Heritage
Petroleum Company Limited 20% working interest).
Production testing of the Cascadura-1ST1 well was performed in
two stages. Stage one included the lowermost 162 feet of pay in the
Herrera formation, and the second stage included 345 feet of pay in
the upper part of the same horizon. Pressure recorders from the
first stage of testing have been recovered, and the recorders for
the second stage are expected to be recovered in the next month.
Flowback testing of the second stage of production testing has been
completed, and unless otherwise noted, all production volumes
referenced herein are stated in gross figures.
Highlights
- Stage two flow testing supports an initial production range
between 7,750 and 9,700 barrels of oil equivalent per day
("boe/d"), including an estimated 40 to 50 million cubic feet per
day ("MMcf/d") of natural gas and an estimated 1,100 to 1,400
barrels per day ("bbls/d") of natural gas liquids, significantly
exceeding pre-drill expectations.
- The second stage of production testing commenced on
March 8, 2020 and achieved a peak
flowback rate of 5,760 boe/d, including
29.4 MMcf/d of natural gas and 865 bbls/d of natural gas
liquids.
- 24-hour extended stage two flow testing yielded an average of
5,472 boe/d, including 28.1 MMcf/d of natural gas and 783 bbls/d of
natural gas liquids.
- Field estimates during the second stage of testing suggest an
absolute open flow ("AOF") potential of 120 MMcf/d.
- As previously announced, initial testing commenced on
February 4, 2020 and delivered an
average flowback rate of 5,157 boe/d, including 26.8 MMcf/d of
natural gas and 691 bbls/d of natural gas liquids during the final
24-hour flowback period.
- Downhole pressure recorders are expected be recovered in
approximately one month, and the Company will subsequently use the
pressure data, in conjunction with geophysical mapping, to define
resource potential.
Paul Baay, President and Chief
Executive Officer, commented:
"This second test, focusing on the upper 345 feet of pay,
confirms the material size of the discovery at Cascadura and the
vast opportunity that exists on our Ortoire property. In addition
to estimated production at our Coho discovery and our existing
production, this well gives us a clear path to 10,000 boe/d with an
estimated 75% natural gas and 25% liquids product mix. With
domestic demand for natural gas exceeding current production,
Touchstone is working with industry partners to bring these new
volumes on-stream as quickly as possible. With the Cascadura well
only three kilometres from existing infrastructure, we are
evaluating the most efficient path forward to tie these significant
volumes into the domestic sales network."
Cascadura-1ST1 Production Testing
As previously announced, the Cascadura-1 exploration well on the
Ortoire exploration block, onshore in the Republic of Trinidad and Tobago (Touchstone 80%
working interest operator, Heritage Petroleum Company Limited 20%
working interest) was sidetracked (ST1) and drilled to a total
depth of 6,350 feet. Cased hole wireline logs and drilling samples
indicated approximately 1,037 feet of prospective hydrocarbon pay
in the Cruse and Herrera formations at depths between 1,030 and
6,350 feet. The first stage of the production test of the
Cascadura-1ST1 well was designed to evaluate the lowest 162 feet of
prospective pay found in the Herrera Gr7c and Herrera Gr7a
formations between 6,056 and 6,218 feet. The second stage of the
production test evaluated 345 feet of prospective pay between 5,570
and 5,915 feet in the Herrera Gr7bc.
Stage one testing
Stage one was completed on January 17,
2020, and natural gas production testing commenced on
February 4, 2020 with flow tests
spanning a total of 44.5 hours, comprised of an initial clean-up
flow period, followed by an initial shut-in period and a four-step
rate test, including a final flow test which was extended to a
total of 24 hours.
Stage one testing achieved a peak production rate in excess of
5,735 boe/d (12% liquids) during the extended 24-hour flow test
period. This production rate included 30.1 MMcf/d of natural gas
and 710 bbls/d of natural gas liquids, with a flowing pressure of
3,305 psi through a 40/64" choke. During the final 24-hour extended
flow test period, the well averaged a production rate in excess of
5,157 boe/d (13% liquids), including 26.8 MMcf/d of natural gas and
an estimated 691 bbls/d of natural gas liquids. The flowing
pressure of the well during this test period was 3,296 psi through
a 40/64" choke, resulting in an estimated 20% drawdown. A total of
39.4 million cubic feet of natural gas (6,570 barrels of oil
equivalent) was produced during testing, with 959 barrels of
natural gas liquids and 41 barrels of water. During the final
extended flow test, Cascadura-1ST1 yielded 55° API natural gas
liquids at a ratio of approximately 26 barrels of natural gas
liquids per million cubic feet of natural gas produced. Laboratory
analysis of the produced gas indicated liquids rich natural gas
with no hydrogen sulfide content.
Following the extended flow test the well was shut in for 20
days for a pressure build-up survey. Based on the shut-in
pressure data of the extended test, the stage one completion was
capable of an AOF rate of 99.3 MMcf/d.
Stage two testing
The second interval of the well was completed on March 6, 2020, and production testing commenced
on March 8, 2020 with flow tests
spanning a total of 49 hours. Stage two testing was designed to
follow the same time and testing parameters as initially performed
in the first stage.
Stage two testing achieved a peak production rate in excess of
5,760 boe/d (15% liquids) during the extended 24-hour flow test
period. This production rate included 29.4 MMcf/d of natural gas
and 865 bbls/d of natural gas liquids. The flowing pressure of the
well at this point in testing was 3,581 psi through a 40/64" choke.
During the final 24-hour flow test period, the well averaged a
production rate in excess of 5,472 boe/d (14% liquids), including
28.1 MMcf/d of natural gas and 783 bbls/d of natural gas liquids at
a flowing pressure of 3,578 psi through a 40/64" choke, resulting
in an estimated 13% drawdown. A total of 43 million cubic feet of
natural gas (7,162 barrels of oil equivalent) was produced during
testing, with 1,095 barrels of natural gas liquids and 78 barrels
of water which included 69 barrels of load fluid. During the final
flow test, stage two testing yielded 55° API natural gas liquids at
a ratio of approximately 28 barrels of natural gas liquids per
million cubic feet of natural gas produced. Laboratory analysis of
the produced gas indicated liquids rich natural gas with no
hydrogen sulfide content and no measurable solids.
The well has now shut-in for an extended pressure build-up
survey which is expected to take up to four weeks, after which the
Company will review the pressure data.
James Shipka, Chief Operating
Officer, commented:
"Based upon the results of our initial test, the second stage
of testing at Cascadura was in line with our expectations. Similar
to the first test, production testing was constrained by the
third-party surface equipment which limited us to a 40/64" choke.
This resulted in natural gas flow rates similar to what was
observed initially, although at a much lower surface drawdown. The
flowing pressures and the associated pressure drawdown exceeded our
expectations, suggesting that the sands evaluated during the second
stage of testing are of exceptional quality and significant
resource size. For comparison, in the lower sands we achieved a
flow rate of 26.8 MMcf/d at a reservoir drawdown of 20% with 691
bbls/d of associated liquids. In the upper sands, we
achieved a slightly higher flow rate of 28.2 MMcf/d at a reservoir
drawdown of only 13%, with over 800 bbls/d of liquids. Based on
these test rates, we are modelling initial production rates of
between 40 and 50 MMcf/d with approximately 1,100 to 1,400 bbls/d
of natural gas liquids, which would yield approximately 6,200 to
7,800 boe/d (net) to the Company."
Coho-1 Gas Discovery Update
The Company has completed surveying the pipeline required to
tie-in the Coho-1 dry natural gas discovery and is currently
awaiting local contract bids for construction. The pipeline has
been specified to allow for production rates of up to 20 MMcf/d to
accommodate the expected volumes from Coho-1 and potential future
locations. The Company anticipates having the Coho-1 well on
production early in the third quarter of 2020.
Chinook Exploration Prospect Update
The Company is close to completing construction of the surface
location and access road for the Chinook-1 exploration prospect.
The well location is approximately one kilometre south of the
Cascadura-1ST1 well location and is targeting hydrocarbons from the
same horizon encountered in both the Coho and Cascadura discoveries
in a new and unique fault block. The Company anticipates spudding
Chinook-1 in the middle of the second quarter of 2020.
Trinidad and Tobago Domestic Gas Sector
The domestic gas industry in Trinidad
and Tobago is well established, with natural gas production
accounting for over 90% of the domestic energy sector on a boe
basis. To capitalize on domestic production, Trinidad has aggressively built a world class
base of industries reliant on natural gas production. In
addition to one of the world's largest liquids natural gas export
plants at Point Fortin, a large-scale petrochemical industrial park
at Point Lisas has evolved to produce ammonia, methanol, iron,
steel, and aluminum. Additionally, natural gas fuels the country's
domestic power sector. Since 2002, domestic gas reserves have been
on the decline. In 2020 many industrial users are seeing natural
gas supplies curtailed, reflecting the imbalance between decreasing
supply and steady or increasing demand. As such, new natural gas
production and reserves are in demand for domestic use.
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary based company 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. Touchstone is currently active in onshore properties
located in the Republic of Trinidad and
Tobago. The Company's common shares are traded on the
Toronto Stock Exchange and the AIM market of the London Stock
Exchange under the symbol "TXP".
Advisories
Forward-Looking Statements
Certain information provided in this news release may constitute
forward-looking statements within the meaning of applicable
securities laws. Forward-looking information in this news
release may include, but is not limited to, statements with respect
to the quality and quantity of prospective hydrocarbon
accumulations; well test results; the Company's exploration plans
and strategies, including anticipated timing, development, tie-in,
and production from current exploration wells, and with
respect to future exploration drilling and the timing thereof; and
the sufficiency of resources and available financing to fund future
exploration operations. Although the Company believes that the
expectations and assumptions on which the forward-looking
statements are based are reasonable, undue reliance should not be
placed on the forward-looking statements because the Company can
give no assurance that they will prove to be correct. Since
forward-looking statements address future events and conditions, by
their very nature they involve inherent risks and uncertainties.
Actual results could differ materially from those currently
anticipated due to a number of factors and risks. Certain of these
risks are set out in more detail in the Company's 2018 Annual
Information Form dated March 26, 2019
which has been filed on SEDAR and can be accessed at www.sedar.com.
The forward-looking statements contained in this news release are
made as of the date hereof, and except as may be required by
applicable securities laws, the Company assumes no obligation to
update publicly or revise any forward-looking statements made
herein or otherwise, whether as a result of new information, future
events or otherwise.
Oil and Gas Matters
References in this news release to production test rates and
initial flow rates are useful in confirming the presence of
hydrocarbons; however, such rates are not determinative of the
rates at which such wells will commence production and decline
thereafter and are not indicative of long-term performance or of
ultimate recovery. Additionally, such rates may also include
recovered "load oil" fluids used in well completion stimulation.
While encouraging, readers are cautioned not to place reliance on
such rates in calculating the aggregate production for the Company.
A final pressure transient analysis and/or well-test interpretation
has yet to be carried out in respect of the well. Accordingly, the
Company cautions that the second stage of test results should be
considered preliminary.
Oil and Gas Measures
Where applicable, natural gas has been converted to barrels of
oil equivalent based on six thousand cubic feet to one barrel of
oil. The barrel of oil equivalent rate is based on an energy
equivalent conversion method primarily applicable at the burner
tip, and given that the value ratio based on the current price of
crude oil as compared to natural gas is significantly different
than the energy equivalency of the 6:1 conversion ratio, utilizing
the 6:1 conversion ratio may be misleading as an indication of
value.
SOURCE Touchstone Exploration Inc.