Touchstone Exploration Inc (LON:TXP) has announced that Primera Oil and Gas Limited (POGL), our wholly owned Trinidadian subsidiary, executed an Exploration and Production (Public Petroleum Rights) licence for the Rio Claro block on November 4, 2024.
The Rio Claro Licence has been formally entered into by POGL, the Government of Trinidad and Tobago, the Trinidad and Tobago Ministry of Energy and Energy Industries (“MEEI”), and a subsidiary of the National Gas Company of Trinidad and Tobago (“NGC”). POGL holds an 80 percent operating working interest in the Rio Claro Licence, while NGC retains the remaining 20 percent. Like the Company’s Charuma, Cipero and Ortoire licences, the Rio Claro Licence initially has a six-year exploration term, with the possibility of a 19-year extension for areas where commercial discoveries are approved by the MEEI.
Strategically located adjacent to the Company’s Ortoire block, the Rio Claro Licence acreage surrounds the recently acquired Balata East field, marking a vital extension of Touchstone’s exploration and development focus within the Herrera Formation fairway. Proprietary seismic data highlights several promising Herrera Formation anomalies, which extend from the Ortoire block into the Rio Claro Licence acreage, situated in structurally favorable up-dip positions. Notably, Touchstone’s Cascadura-3ST1 discovery within the Ortoire block appears to extend into the Rio Claro block. Furthermore, seismic interpretation reveals that both the Royston anomaly in the Herrera Formation and the Kraken anomaly in the Cretaceous Formation extend into the Rio Claro Licence acreage.
With existing sales infrastructure at Ortoire and Balata East, any future discoveries of liquid hydrocarbons or natural gas within the Rio Claro block can be seamlessly integrated into production.
Paul R Baay, Touchstone Exploration President and Chief Executive Officer, commented:
“The issuance of the Rio Claro License aligns with the commencement of production from the Cascadura C well pad. 3D seismic data indicates that a substantial portion of the Cascadura structure extends into the Rio Claro License area. This creates a significant opportunity, as any potential natural gas discoveries on this block can seamlessly integrate into our newly commissioned gathering system at the Cascadura C location, situated near the western boundary of the Rio Claro acreage. Notably, these resources will be marketed under a distinct natural gas arrangement, separate from our existing Ortoire agreement.
Subject to regulatory approvals, we anticipate drilling the first commitment well on this block originating from the Cascadura pad C surface location and targeting a bottom-hole location within the new Rio Claro License.
Beyond its strategic alignment with the Cascadura field, the Rio Claro property adds considerable value by granting us full control over the Kraken Cretaceous prospect. Additionally, it enhances our position on the highly prospective Herrera fairway, with updip closures on several promising prospects.“
In January 2023, POGL entered into an asset exchange agreement with a privately held Trinidadian entity, involving the exchange of specific onshore assets in Trinidad with no cash consideration. Under the terms of the initial agreement, POGL agreed to transfer its 100 percent working interests in the Fyzabad, San Francique, and Barrackpore producing blocks in exchange for the counterparty’s working interests in the Rio Claro Licence, Balata East, and Balata East Deep Horizons blocks.
The asset swap was contingent upon the counterparty obtaining an extension of the Rio Claro Licence. However, due to regulatory delays in securing the extension, the parties amended the agreement in October 2023. This supplemental agreement divided the asset swap into two potential exchanges. The first exchange, involving POGL’s 100 percent working interest in the privately leased San Francique field for the counterparty’s 100 percent working interest in the Balata East block, was completed effective June 1, 2024. As POGL directly negotiated the Rio Claro Licence with the MEEI, the completion of this negotiation marked the conclusion of the transaction, and the second asset exchange, which lapsed on August 31, 2024, will no longer be pursued by Touchstone.
| Summary of the Rio Claro Licence | ||
| Gross acreage | 31,983 | |
| POGL operating working interest | 80 percent | |
| NGC working interest | 20 percent | |
| Minimum work commitments:(1) | ||
| Geological studies | Conduct five studies | |
| Reprocess 3D seismic | 130 square kilometres | |
| Exploration drilling | Three wells | |
| Financial obligations over the six-year initial licence term(1)(2) | US$2.4 million | |
| Notes: (1) Gross reserves are the Company’s working interest share before deduction of royalties.(2) Reserve additions exclude period production. See “Advisories: Oil and Gas Metrics“.(3) Based on the three Consultants’ average December 31, 2022 forecast prices and costs. See “Forecast prices and costs“. | ||
Notes:
(1) POGL is responsible for 100 percent of the exploration minimum work commitments and financial obligations over the initial six-year exploration term of the Rio Claro Licence.
(2) Financial obligations represent estimated amounts payable pursuant to the Rio Claro License, which include bonuses, lease payments and surface rental costs over the initial six year licence term.
For further details, including updated 3D mapping of the Rio Claro Licence acreage, Touchstone Exploration’s latest corporate presentation is available here:
