Touchstone Exploration Announces Third Quarter 2025 Results

Executive Summary

• Touchstone reported Q3 2025 net loss of $2.06 M and a 71 % drop in funds‑flow from operations to $0.74 M versus $3.02 M YoY.
• Revised 2025 guidance lowered average daily production to 4,700 boe/d (‑6 %) and funds‑flow from operations to $4 M (‑33 %), while capital spend rises to $27 M and net debt increases to ~$69 M.
• Completed a $9.1 M private placement, issued a three‑year 5 % convertible debenture (6.25 M shares @ US$0.22 conversion) with 6.25 M warrants @ C$0.40, and entered an agreement to divest the non‑core Fyzabad property.

Key Details

• Production: Q3 2025 average 5,141 boe/d (71 % gas); Central field contributed ~2,217 boe/d.
• Sales & Prices: Petroleum & natural gas sales $12.70 M (‑4 % YoY). Crude oil price $60.30/bbl; NGL $33.41/bbl; Natural gas $2.74/Mcf.
• Operating Netback: $5.86 M (‑21 % YoY).
• Funds Flow from Operations: $0.74 M vs. $3.02 M prior year quarter.
• Net Loss: $2.06 M ($0.01/share) versus $1.85 M profit YoY.
• Capital Expenditures: $9.60 M, mainly Cascadura drilling & compression equipment.
• Convertible Debenture (issued 8 Aug 2025): 3‑yr secured, 5 % interest, convertible @ US$0.22/C$0.30 per share; 6.25 M warrants exercisable at C$0.40 for two years. Proceeds used to finish Cascadura drilling.
• Net Debt: $77.75 M as of 30 Sep 2025 (up from prior).
• Asset Disposition: Agreement to sell non‑core Fyzabad property (WD‑8 & WD‑4 blocks) for three turnkey wells; property produced ~49 bbl/d, carries $2.59 M net liabilities. Subject to regulatory approvals.
• Private Placement (30 Oct 2025): Gross proceeds ≈ $9.1 M (£7 M) from 63,636,363 common shares at £0.11 (≈ C$0.205) each.
• Bank Waiver: Lender waived debt‑service coverage covenant for FY 2025 after private placement.
• Post‑Period Production (Oct 2025): Avg. 4,691 boe/d (‑3.3 % vs. Sep). Maintenance at Central facility cited.
• Drilling Update: Rig mobilizing to new Central block well targeting bypassed pay; results expected Q1 2026.
• Cascadura‑5 Well: On‑stream 1 Nov 2025, avg. 500 boe/d (incl. 26° API crude), 2.4 MMcf/d gas & 106 bbl/d oil – well below Revised Guidance (17 MMcf/d gas, 275 bbl/d liquids).
• Revised Guidance (Nov 2025):
• Avg. daily production: 4,700 boe/d (‑300 boe vs. prior 5,000 boe target).
• Funds flow from operations: $4 M (‑$2 M vs. prior $6 M).
• Capital expenditures: $27 M (+$1 M).
• Net debt year‑end: ~$69 M (+$4 M).
• Liquidity Concerns: Working capital deficit $16.74 M (excl. debenture); going‑concern statement included; management monitoring cash, tax receivables, and production ramp‑up.

Notable Quotes

“The Cascadura‑5 well commenced production on November 1, 2025…initial rates did not exhibit the high flush production observed in previous wells…we have identified additional reservoir intervals for perforation…” – Paul Baay, CEO

All figures are presented as disclosed by Touchstone Exploration Inc. and reflect unaudited interim results.