Touchstone Exploration Inc. (TSX, LON:TXP) has announced that it’s indirect wholly-owned subsidiary has executed a long-term natural gas sales agreement with the National Gas Company of Trinidad and Tobago Limited for all future natural gas production from the Ortoire block (Touchstone 80% working interest operator, Heritage Petroleum Company Limited 20% working interest).
The National Gas Company of Trinidad and Tobago Limited (NGC) signed a natural gas supply agreement with Primera Oil and Gas Limited, a subsidiary of Canadian energy exploration company Touchstone Exploration on Friday 18th December 2020. Primera, acting on behalf of its Joint Venture partner Heritage Petroleum Company Limited, will supply gas from the Ortoire Block, initially from the Coho-1 field.
Paul Baay CEO of Touchstone Exploration commented: “This agreement provides a stable, multi-decade revenue stream for Touchstone to fully develop the world-class asset at Ortoire. This transforms the company from being an exploration company to one that is a full cycle energy provider. The structure of the agreement provides the shareholders of Touchstone with a predictable cash flow and earnings stream for years to come while minimising the capital required to maximise the resource.”
Chief Executive Officer of Heritage Petroleum Arlene Chow said, “This strategic partnership is not only promising for the industry and the companies involved, but ultimately, it will greatly benefit the people of Trinidad and Tobago. “
NGC’s President Mark Loquan noted that this signaled an important milestone in the country’s gas story. “NGC is unwavering in its commitment to secure natural gas through innovation and strategic partnerships, especially in these challenging times. This is notable because onshore natural gas production has been for so long overlooked in the sector.”
He also congratulated the teams who worked on the agreement, affirming that, “…in an epoch where the energy industry here and globally rarely fields a good story, this one bodes well for Trinidad and Tobago.”
Touchstone Operational Update
Touchstone has mobilized a service rig to the Chinook-1 location to perform a comprehensive completion and production testing program. The Company expects to perform three production tests to evaluate reservoir pressures and hydrocarbon deliverability of the Herrera sands observed while drilling and defined by open hole wireline logs. The first test will evaluate the previously untested subthrust Herrera sands while the other tests are expected to investigate the potential of the intermediate and overthrust Herrera sand intervals. We anticipate final results from the Chinnok-1 production testing program in the first quarter of 2021.
Following testing at Chinook-1, the service rig is expected to immediately move to the Cascadura Deep-1 location. The Cascadura Deep-1 production testing program is anticipated to include flow and buildup testing of three zones of interest. The first two tests plan to evaluate sands observed in two previously untested thrust sheets in the intermediate Herrera that are below the sands observed in the Cascadura-1ST1 well, while the third test will assess the base of the sands which were observed but not fully penetrated in the Cascadura-1ST1 well.
