TXP Touchstone Exploration Inc

CALGARY, AB, April 12, 2021 /CNW/ - Touchstone Exploration Inc. ("Touchstone", "we", "our", "us" or the "Company") (TSX: TXP) (LSE: TXP) announces the completion of flowback testing of the Cascadura Deep-1 well, confirming a liquids rich natural gas discovery. Touchstone has an 80 percent operating working interest in the well, which is located on the Ortoire block onshore Trinidad and Tobago (Heritage Petroleum Company Limited ("Heritage") holds the remaining 20 percent working interest).

Highlights

• Touchstone perforated the top 199 feet of the 449 feet identified as potential pay in sheet four of the overthrust Herrera formation on April 8, 2021.
• The average flowback rate during the extended 24-hour test period was approximately 4,262 boe/d, including 22.9 MMcf/d of natural gas and 449 bbls/d of NGLs.
• Peak flowback rate of approximately 4,567 boe/d was observed, comprised of 24.5 MMcf/d of natural gas and 477 bbls/d of NGLs.
• Approximately 48.8 MMcf of natural gas (8,138 boe) and 1,081 barrels of NGLs were produced during the testing period.
• Field analysis indicated liquids rich gas with no hydrogen sulfide and no produced water.
• The well is currently shut-in for a minimum four-week pressure build-up test.

Paul Baay, President and Chief Executive Officer, commented:

"The positive test results from Cascadura Deep-1 further expands the opportunity on the Ortoire block as we now expect to have two distinct and separate sheets producing from two wells in the Cascadura structure. We will accelerate operations required to bring the two Cascadura wells onto production as the test results allow us to properly size surface facilities for reservoir management. We are also moving forward with the required applications to establish a second Cascadura surface location, designed for up to four development wells. The test results demonstrate the clear future production opportunities for the Company."

Cascadura Deep-1 Testing

Cascadura Deep-1 well production testing commenced on April 8, 2021, with flow tests spanning a total of 58 hours, comprised of an initial clean-up flow period, followed by an initial shut-in period and a five-step rate test, including a 24-hour extended flow test. Well testing was conducted by an international well testing and measurement company.

During the extended flow test period, the well achieved a peak production rate of approximately 4,567 boe/d (90% natural gas). This production rate included approximately 24.5 MMcf/d of natural gas and 477 bbls/d of NGLs flowing at 1,917 psi. During the 24-hour extended portion of the flow test, the well averaged a production rate of approximately 4,262 boe/d (89% natural gas), including 22.9 MMcf/d of natural gas and an estimated 449 bbls/d of NGLs. The flowing pressure of the well during this stage of testing averaged 1,856 psi through a 50/64-inch choke. Approximately 48.8 MMcf of natural gas (8,138 boe) was produced during testing, with 1,081 barrels of NGLs and 27 barrels of water which were less than the load fluid used in the well.

During testing, Cascadura Deep-1 yielded 59.5-degree API gravity NGLs at an average ratio of approximately 22 barrels of NGLs per MMcf of natural gas produced. Field analysis of the produced gas indicated liquids rich natural gas with no hydrogen sulfide content. Additional testing of fluid samples will be conducted to accurately assess the gas and associated liquids composition.

The well is currently shut-in for an extended pressure build-up survey for a minimum of four weeks to identify possible formation boundaries. Touchstone will not conduct further testing of the well and intends producing the well concurrently with Cascadura-1ST1.

James Shipka, Chief Operating Officer, commented:

"The exceptional performance noted during Cascadura Deep-1 well testing reinforces the geological concept of multiple stacked, independent hydrocarbon charged horizons in the Herrera turbidite fairway. We will not be conducting any up-hole testing in the well as we do not want to interrupt this interval at the risk of damaging the reservoir with water-based fluids. The data collected in this flow test indicates that sheet four is separate from sheet three, where production is expected from the Cascadura-1ST1 well. There remains an additional 558 feet of potential pay above the tested zone in sheet three which can be evaluated in future development wells."

Extension of Lease Operatorship Agreements

Touchstone has further extended the term of its Lease Operatorship Agreements ("LOAs") with Heritage for its Coora-1, Coora-2, WD-4 and WD-8 blocks to April 30, 2021. The LOAs were originally set to expire on December 31, 2020 and were previously extended to March 31, 2021. The LOAs remain under existing terms and conditions while Heritage progresses on regulatory approvals regarding new ten-year LOAs for each property.

Touchstone Exploration Inc.

Touchstone Exploration Inc. is a Calgary, Alberta 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 and information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Such forward-looking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to assumptions, risks and uncertainties, many of which are beyond the control of the Company. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or are events or conditions that "will", "would", "may", "could" or "should" occur or be achieved.

Forward-looking statements in this news release may include, but is not limited to, statements relating to the quality and quantity of prospective hydrocarbon accumulations; well test results; the Company's exploration plans and strategies, including anticipated drilling, production testing, development, tie-in, facilities construction, and timing thereof; and the Company's ongoing negotiations regarding its LOAs and anticipated terms, finalization, achieving regulatory approvals and timing thereof. 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 2020 Annual Information Form dated March 25, 2021 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 the well 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 production test results contained herein 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.

Abbreviations

SOURCE Touchstone Exploration Inc.