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Highlights
- Touchstone expands its production footprint in Trinidad with the strategic $23M acquisition.
- Access to Atlantic LNG and development opportunities bolster Touchstone’s growth trajectory.
- Acquisition increases production by 2,080 boe/d, enhancing long-term revenue prospects.
Touchstone Exploration Inc. (TSX:TXP), a leading oil and gas company with operations in Trinidad and Tobago, is pleased to announce a significant acquisition deal that will significantly enhance its production capacity and market position. Through its wholly owned subsidiary, Touchstone Exploration (Trinidad) Ltd. (TETL), the company has entered into an agreement with BG Overseas Holdings Limited to acquire all the share capital of Shell Trinidad Central Block Limited (STCBL). This strategic move is set to bring exciting growth opportunities and increase the company’s production capabilities.
Acquisition Overview: A Strategic Expansion
Under the terms of the acquisition, TETL will pay BG Overseas Holdings Limited a cash consideration of $23 million before any closing adjustments. The deal is subject to customary regulatory approvals and partner consents, including the Ministry of Energy and Energy Industries’ approval in Trinidad. Touchstone has also confirmed that it is in active discussions with Republic Bank Limited to secure funding for the acquisition, with closing expected during the second quarter of 2025.
The acquisition is strategically timed, with an effective date set for January 1, 2025, and a four-month long stop date. STCBL holds a 65 percent working interest in the Central block exploration and production license in Trinidad and Tobago, with Heritage Petroleum Company Limited (HPCL) owning the remaining 35 percent interest. The Central block is a key asset, and the acquisition significantly enhances Touchstone’s foothold in the region.
Key Acquisition Highlights: Expanding Horizons
The acquisition of STCBL offers several key advantages for Touchstone, including:
- Access to Atlantic LNG:
STCBL’s involvement in natural gas sales contracts gives Touchstone direct access to both the local and global LNG markets, positioning the company to capitalize on attractive pricing opportunities. - Opportunity for Development:
Touchstone has identified several infill well locations and is excited about the potential of a deeper Cretaceous prospect in the Central block. These opportunities will further expand production potential and long-term profitability. - Strategic Infrastructure:
The acquisition includes valuable midstream assets, such as an 80 MMcf/d gas processing plant known as the Evergreen Facility. The plant’s gas export pipeline, which connects to both the domestic market and the Atlantic LNG facility, offers crucial infrastructure to support enhanced production capacity. - Increased Production:
With an estimated increase of 2,080 barrels of oil equivalent per day (boe/d) from current field rates, approximately 94 percent of which is natural gas, the acquisition significantly boosts Touchstone’s base net production. This increase will provide the company with incremental corporate cash flows, supporting future growth and expansion.
Production and Cash Flow Enhancement
The strategic acquisition of STCBL directly increases Touchstone’s production capabilities by approximately 2,080 boe/d, a welcome boost to its operational capacity. The fact that this increase is largely in natural gas (94 percent of the total increase) positions the company to benefit from the rising demand for natural gas globally, particularly in the LNG sector. This move will enhance Touchstone’s overall cash flow generation, which in turn supports its expansion plans and operational sustainability.
