Touchstone’s Trinidad Assets Deliver Strong Production Growth and Strategic Market Positioning
Calgary-based Touchstone Exploration Inc. is demonstrating compelling operational success and strategic execution within its Trinidad and Tobago portfolio, particularly from the recently integrated Central Block asset. The company has unveiled strong production figures and a diversified marketing strategy that positions it favorably for sustained cash flow and growth, offering a clear signal to investors monitoring the dynamic Caribbean energy landscape.
Central Block Production Performance: A Solid Foundation
Touchstone’s Central Block asset in Trinidad and Tobago has quickly established itself as a key production contributor. During the first quarter, the asset reported gross production volumes averaging 2,969 barrels of oil equivalent per day (boepd). For Touchstone, this translated to a net production figure of 1,930 boepd. The production mix from the Central Block primarily comprised natural gas, flowing at approximately 16.74 million cubic feet per day (MMcfpd), complemented by 179 barrels per day (bpd) of natural gas liquids (NGLs).
The positive momentum continued into the second quarter, with preliminary field estimates indicating further growth. Gross production for Q2 averaged 3,023 boepd, representing a net contribution of 1,965 boepd. This sequential increase underscores effective asset management and optimization efforts by Touchstone’s on-the-ground teams. The Q2 production stream consisted of approximately 17.05 MMcfpd of natural gas and 181 bpd of NGLs, reinforcing the asset’s consistent output profile.
A Strategic Acquisition with Immediate Impact
The Central Block asset represents a significant strategic acquisition for Touchstone, having been secured from Shell Trinidad Central Block Limited for approximately $28.4 million. Following the acquisition, the entity was rebranded as Touchstone Trinidad Central Block Ltd. Touchstone holds a commanding 65 percent operating interest in this onshore exploration and production license, with Heritage Petroleum Company Limited retaining the remaining 35 percent participating interest. This partnership structure combines Touchstone’s operational expertise with local industry presence.
The acquired Central Block infrastructure is robust, comprising four actively producing natural gas wells and a dedicated gas processing facility. This existing infrastructure has been instrumental in enabling Touchstone to rapidly integrate the asset and achieve immediate production growth and efficiency gains, proving the rationale behind the investment and offering investors a clear pathway to value creation.
Diversified Gas Marketing: Tapping Global and Domestic Demand
A cornerstone of Touchstone’s strategy for the Central Block is its sophisticated natural gas marketing approach, which strategically diversifies revenue streams. The company sells natural gas under two distinct contractual arrangements: one linked to international liquefied natural gas (LNG) export pricing and another catering to the domestic Trinidadian market, primarily serving the nation’s robust petrochemical sector.
The LNG export sales component introduces a dynamic pricing mechanism that can capture global market premiums, though it is subject to the availability of LNG vessels for liftings. From January through April, Touchstone successfully completed 11 LNG liftings, including associated liquids, totaling approximately 2.2 million British Thermal Units (MMBtu). Concurrently, the company supplied a significant 11,065 MMBtu into the stable domestic market during the same period. This dual-market approach not only optimizes pricing but also mitigates risks associated with single-market exposure, enhancing the predictability and resilience of Touchstone’s cash flows.
Future Growth Trajectory: Expanding the Footprint
Looking ahead, Touchstone is actively laying the groundwork for further expansion within the Central Block. The company has completed site surveys for two additional well pads, each designed to support up to four new drilling locations. This proactive planning demonstrates a clear commitment to maximizing the asset’s potential and ensures a pipeline of future development opportunities. Investors will be keenly watching for updates as the company awaits critical government construction approvals, which will pave the way for these planned drilling campaigns and subsequent production increases.
Leadership Confidence and Strategic Vision
Paul Baay, President and CEO of Touchstone, articulated strong confidence in the Central Block’s performance and strategic value. “We are pleased to provide our first operational update on the Central Block following the successful completion of the acquisition,” Baay stated. He highlighted the “quarter-over-quarter production growth through continued plant optimization,” attributing this success to the dedicated Central Block team. This operational efficiency not only boosts current output but also signals strong management capabilities.
Baay further emphasized the “strategic advantage of integrating LNG-based pricing into our marketing portfolio.” With commercial documentation now complete and the inaugural LNG payment anticipated by the close of July, Touchstone is poised to benefit from “predictable cash flows under the export contract.” This diversification across LNG, petrochemical, and fixed-price gas sales strengthens the company’s financial resilience and marketing flexibility, validating the acquisition rationale and enhancing its appeal to a broad base of energy investors.
Broader Trinidadian Operations: Ortoire Block Development
Beyond the Central Block, Touchstone continues to advance its wider Trinidadian development initiatives. Earlier in the month, the company announced the spudding of the Cascadura-5 (Cas-5) development well, situated on the prolific Ortoire block in the country. This ongoing drilling activity underscores Touchstone’s commitment to expanding its production base and unlocking further value across its diverse asset portfolio in Trinidad. The Cascadura development is a key part of Touchstone’s growth strategy, promising significant future contributions to its overall production profile.
Touchstone Exploration’s early success with the Central Block, coupled with its strategic marketing and ongoing development activities, paints a promising picture for investors. The company’s ability to drive immediate production growth, diversify revenue streams through sophisticated gas marketing, and plan for future expansion solidifies its position as a compelling player in the Trinidad and Tobago energy sector.
