18:00 Thu 14 Nov 2019
Touchstone Explrtn. - THIRD QUARTER 2019 RESULTS
TOUCHSTONE ANNOUNCES RESULTS FOR THE THREE AND NINE MONTHS ENDED
Highlights
· Achieved crude oil sales of 1,729 barrels per day ("bbls/d") and 1,871 bbls/d for the three and nine months ended
· Successfully drilled our first exploration well at Ortoire, which is currently rigged to commence production testing.
· Generated an operating netback of
· Delivered funds flow from operations of
· Exited the quarter with cash of
· Spudded our second Ortoire exploration well on
· Increased our financial liquidity by enlarging the principal amount of our credit facility from
Financial and Operating Results Summary
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Three months ended |
% change |
Nine months ended |
% change |
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2019 |
2018 |
2019 |
2018 |
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Operating Highlights |
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Average daily oil production (bbls/d) |
1,729 |
1,758 |
(2) |
1,871 |
1,674 |
12 |
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Net wells drilled |
0.8 |
3.0 |
(73) |
0.8 |
8.0 |
(90) |
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Brent benchmark price ($/bbl) |
61.95 |
75.10 |
(18) |
64.62 |
72.15 |
(10) |
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($/bbl) |
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Realized sales price |
56.67 |
60.98 |
(7) |
58.21 |
60.76 |
(4) |
Royalties |
(16.61) |
(15.70) |
6 |
(16.32) |
(16.66) |
(2) |
Operating expenses |
(15.50) |
(16.89) |
(8) |
(14.82) |
(15.87) |
(7) |
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Operating netback(1) |
24.56 |
28.39 |
(13) |
27.07 |
28.23 |
(4) |
Note:
(1) Non-GAAP financial measure that does not have a standardized meaning prescribed by International Financial Reporting Standards ("IFRS") and therefore may not be comparable with the calculation of similar measures presented by other companies. See "Advisories: Non-GAAP Measures".
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Three months ended |
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Nine months ended |
% change |
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2019 |
2018 |
2019 |
2018 |
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Financial Highlights |
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( |
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Petroleum sales |
9,011 |
9,862 |
(9) |
29,734 |
27,759 |
7 |
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Cash flow (used) from operating activities |
(1,205) |
831 |
n/a |
3,364 |
4,521 |
(26) |
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Funds flow from operations(2) |
1,082 |
2,497 |
(57) |
4,822 |
7,066 |
(32) |
Per share - basic and diluted(1)(2) |
0.01 |
0.02 |
(50) |
0.03 |
0.05 |
(40) |
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Net (loss) earnings |
(1,053) |
199 |
n/a |
(2,071) |
(194) |
968 |
Per share - basic and diluted |
(0.01) |
0.00 |
n/a |
(0.01) |
(0.00) |
n/a |
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Exploration capital expenditures |
3,234 |
443 |
630 |
4,275 |
954 |
348 |
Development capital expenditures |
517 |
3,475 |
(85) |
1,231 |
9,833 |
(87) |
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Net debt(1) - end of period |
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12,286 |
10,059 |
22 |
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Share Information (000's) |
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Weighted average shares outstanding - basic |
160,688 |
129,021 |
25 |
154,192 |
129,021 |
20 |
Weighted average shares outstanding - diluted |
160,688 |
130,728 |
23 |
154,192 |
129,021 |
20 |
Outstanding shares - end of period |
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160,688 |
129,021 |
25 |
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Notes:
(1) Non-GAAP financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable with the calculation of similar measures presented by other companies. See "Advisories: Non-GAAP Measures".
(2) Additional GAAP financial measure included in the Company's consolidated statements of cash flows. See "Advisories: Non-GAAP Measures".
Third quarter operating results
In the third quarter of 2019, Touchstone conducted minimal capital development activity and continued to allocate capital to exploration activities on our Ortoire property. As a result, crude oil production during the third quarter averaged 1,729 bbls/d, a 2% decrease relative to the 1,758 bbls/d produced in the third quarter of 2018, as incremental production achieved from wells drilled in the fourth quarter of 2018 were offset by natural declines. Production in the first nine months of 2019 averaged 1,871 barrels per day, representing an increase of 12% from production delivered in the prior year equivalent period.
Touchstone drilled its first exploration well on Ortoire for approximately
Third quarter financial results
Our third quarter operating netback was
We delivered third quarter 2019 funds flow from operations of
Touchstone exited the third quarter with a cash balance of
On
Operational update
Touchstone's
The Company has completed the primary target in the Coho-1 exploration well on the Ortoire block and is currently rigged up to commence production testing. Testing operations are expected to be completed next week. Production testing is slightly behind schedule due to delays in obtaining suitable surface testing equipment and required regulatory approvals.
Touchstone is currently drilling the Cascadura ST-1 exploration well on Ortoire. After some initial mechanical issues with the drilling rig, the well was sidetracked beneath surface casing and is now drilling at approximately 4,600 feet. We plan to set intermediate casing at approximately 6,000 feet and anticipate drilling the primary zone to a total depth of 8,150 feet by early December.
For further information about Touchstone, please visit our website at www.touchstoneexploration.com or contact:
Mr.
Mr.
Mr.
Shore Capital (Nominated Advisor and Joint Broker)
Nominated Advisor:
Corporate Broking:
GMP FirstEnergy (Joint Broker)
Camarco (Financial PR)
Nick Hennis / Jane Glover Tel: +44 (0) 203 781 8330
Advisories
Non-GAAP Measures
This announcement contains terms commonly used in the oil and natural gas industry, including funds flow from operations, funds flow from operations per share, operating netback and net debt. These terms do not have a standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. Shareholders and investors are cautioned that these measures should not be construed as alternatives to cash flow from operating activities, net income, total liabilities, or other measures of financial performance as determined in accordance with Generally Accepted Accounting Principles ("GAAP"). Management uses these Non-GAAP measures for its own performance measurement and to provide stakeholders with measures to compare the Company's operations over time.
Funds flow from operations is an additional GAAP measure included in the Company's consolidated statements of cash flows. The Company calculates funds flow from operations per share by dividing funds flow from operations by the weighted average number of common shares outstanding during the applicable period.
The Company uses operating netback as a key performance indicator of field results. Operating netback is presented on a total and per barrel basis and is calculated by deducting royalties and operating expenses from petroleum sales. If applicable, the Company also discloses operating netback both prior to realized gains or losses on derivatives and after the impacts of derivatives are included. Realized gains or losses represent the portion of risk management contracts that have settled in cash during the period, and disclosing this impact provides Management and investors with transparent measures that reflect how the Company's risk management program can impact netback metrics. The Company considers operating netback to be a key measure as it demonstrates Touchstone's profitability relative to current commodity prices. This measurement assists Management and investors with evaluating operating results on a historical basis.
The Company closely monitors its capital structure with a goal of maintaining a strong financial position in order to fund current operations and the future growth of the Company. The Company monitors working capital and net debt as part of its capital structure to assess its true debt and liquidity position and to manage capital and liquidity risk. Working capital is calculated as current assets minus current liabilities as they appear on the consolidated statements of financial position. Net debt is calculated by summing the Company's working capital, long-term lease liabilities and the principal (undiscounted) amount of long-term debt.
Forward-Looking Statements
Certain information provided in this announcement may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking information in this announcement may include, but is not limited to, statements relating to future positive cash flows expected from exploration/appraisal wells, the potential timing, production rates and costs of exploration well drilling and testing operations, and the sufficiency of resources and available financing to fund future exploration drilling operations. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Certain of these risks are set out in more detail in the Company's 2018 Annual Information Form dated
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