Today’s guest on the ValueTheMarkets podcast is Paul Baay, President and CEO of Touchstone Exploration (LSE:TXP). Touchstone is currently undergoing a potentially transformational drilling campaign on the Ortoire Block in Trinidad, and yesterday announced higher than expected initial test rates from the first well, Coho-1.
The well was tested for seven hours using gradually increasing choke sizes with an average natural gas rate of 17.5 million cubic feet per day (mmcfd) over the period. This equates to 2,917 barrels of oil equivalent (boepd), well in excess of the company’s combined existing production of around 1800 bopd.
In the interview, Paul explains that the company chose to shorten the flowback period due to limitations of the testing equipment in handling the much higher than expected flow rates. Paul also mentions the benefits a diversification into natural gas brings to Touchstone and highlights the better economics with no Supplementary Petroleum Tax (SPT) payable.
Further tests and analysis will follow at Coho-1 shortly and the company will tie in the well via a 3 km pipeline to an existing production facility. It’s anticipated that the well will be brought onto production in the first half of 2020.
it’s worth noting that Coho is just the first, and smallest, of the four prospects Touchstone is exploring on the Ortoire Block. Drilling of the second well, Cascadura-1 is already underway with total depth expected to be reached by early December.
Author: Stuart Langelaan
Disclosure: The author was paid for this piece. The author owns shares in the company mentioned.
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