Touchstone Exploration Inc. ("Touchstone") (TXP) reports its operating and financial results for the three and nine months ended September 30, 2022. Selected information is outlined below and should be read in conjunction with
our September 30, 2022 unaudited interim condensed consolidated financial statements and related Management's discussion and analysis, both of which will be available under our profile on SEDAR and on our website. Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.
Third Quarter 2022 Financial and Operational Highlights
- Produced quarterly average crude oil volumes of 1,272 bbls/d, representing a 10 percent decrease relative to the preceding quarter and a 5 percent decrease from the 1,333 bbls/d produced in the third quarter of 2021, as three key wells were down in the quarter.
- Realized petroleum sales of $9,933,000 from an average crude oil price of $84.85 per barrel compared to $7,650,000 from an average realized price of $62.37 per barrel in the comparative quarter of 2021.
- Generated an operating netback of $37.55 per barrel, a 17 percent decrease from the second quarter of 2022 and a 35 percent increase from $27.77 per barrel in the third quarter of 2021, with the variances primarily attributed to movements in realized crude oil pricing.
- Recognized current income tax expenses of $1,381,000 in the quarter compared to $377,000 in the third quarter of 2021, driven by $1,173,000 in supplemental petroleum tax ("SPT") expenses based on our average realized oil price exceeding the $75.00 per barrel threshold in the period.
- Our funds flow from operations was $290,000 in the quarter compared to $1,073,000 in the prior year equivalent quarter, and our year to date funds flow from operations increased 1 percent from the same period of 2021.
- Recognized a net loss of $778,000 in the quarter compared to a net loss of $51,000 reported in the same period of 2021, principally driven by higher current income tax expenses.
- Capital investments of $2,899,000 primarily focused on facility and pipeline expenditures related to the Coho-1 natural gas facility and investments directed to the Cascadura natural gas and liquids facility.
- Exited the quarter with cash of $8,732,000, a working capital deficit of $4,537,000 and a $28,500,000 term credit facility balance, resulting in a net debt position of $27,037,000.
Recent Highlights
- Delivered first natural gas from the Coho facility on October 10, 2022, with net October sales over 19 operating days averaging 7.3 MMcf/d (1,212 boe/d).
- In conjunction with initial Coho production, we sold the gathering pipeline from our Coho facility to the third party natural gas facility for net proceeds of $1.2 million.
- Daily crude oil sales averaged 1,304 bbls/d in October 2022 with a realized price of $81.32 per barrel.
- Clearing of the surface location expansion area has been completed at the Cascadura facility site.
Paul Baay, President and Chief Executive Officer, commented:
"The focus of the third quarter was the completion of the Coho natural gas facility which is currently on
production, providing us with our first natural gas revenues in October. Our base oil production continues
to generate positive operating cash flows while we progress on construction of the Cascadura natural gas
and liquids facility. Production from our Cascadura discoveries will mark an inflection point for Touchstone,
both from a cash flow and production volume basis. As we plan for our next stage of production growth, we
are targeting further expansion of our onshore asset portfolio, through both the Trinidad 2022 onshore bid
round and by considering other licence acquisition opportunities to expand our exploration and development
acreage in prospective areas in Trinidad.
