Touchstone conditionally raises 6.32 M British pounds

Executive Summary

• Touchstone Exploration Inc. announced the completion of a private placement raising £6.32 million (US$8.44 million) and a proposed retail offer of up to £0.68 million (US$0.91 million), bringing total gross proceeds to approximately £7 million.
• The financing includes a strategic investment from Purebond Ltd., which has secured the right to appoint one non-executive director to the board.
• The company simultaneously updated its 2025 operational and financial guidance, citing delays in well completions at Cascadura, resulting in lower expected production, funds flow, and capital expenditures.

Key Details

• Private Placement Details:
  • Gross proceeds: £6.32 million (US$8.44 million).
  • Shares issued: 57,454,545 new common shares.
  • Price: 11 pence per share (approx. 20.6 Canadian cents).
  • Discount: 2.2% discount to the closing price of 11.25 pence on Oct. 23, 2025.
  • Investor: Purebond Ltd. (controlled by the Kansagra family) and existing investors.
  • Board Rights: Purebond receives the right to appoint one nominated non-executive director while holding >15% of share capital. Bhupendra Kansagra is the intended nominee.
• Retail Offer:
  • Proposed raise: Up to £0.68 million (US$0.91 million).
  • Shares: Up to 6,181,818 new common shares.
  • Target: Existing shareholders via bookbuild platform.
  • Status: Separate from the placing; terms to be announced separately.
• Use of Proceeds:
  • Finance revised 2025 capital program.
  • Satisfy remaining equity raising requirement under the fourth amended and restated loan agreement with Republic Bank Ltd.
  • Specific projects: Drilling one development well on the Central block and capital investments for the Cascadura natural gas facility compression project (scheduled for completion Q2 2026).
• Previous Placement Update:
  • The May 8, 2025, private placement had £10.32 million in gross proceeds unreceived by the June 27, 2025, deadline.
  • The company closed on £5.05 million (24,636,585 shares) from that previous attempt.
  • Touchstone determined it is unlikely to receive the outstanding balance and will not pursue litigation, reserving all rights.
• Updated 2025 Guidance:
  • Average Daily Production: Revised to 4,700–5,300 boe/d (midpoint ~5,000 boe/d), a decrease of ~600 boe/d (11%) from the previous revised guidance midpoint of 5,600 boe/d.
    • Driver: Delay in Cascadia-5 well (expected Nov 2025) and Cascadia-4ST2X well (expected 2026).
  • Funds Flow from Operations: Revised to ~$6 million, down from $11 million in previous guidance (a $5 million decrease).
  • Capital Expenditures: Revised to $26 million, down from $28 million.
    • Includes deferral of two WD-8 crude oil development wells ($3 million savings).
    • Offset by $1 million increase in Cascadia-4ST2X costs.
  • Net Debt: Expected to exit 2025 with ~$65 million net debt, an increase of $1 million (2%) from the previous $64 million estimate.
• Admission:
  • Shares expected to be admitted to trading on the Toronto Stock Exchange (TSX) and AIM of the London Stock Exchange.
  • Expected admission date: At or before 8 a.m. London time on Oct. 30, 2025.
  • Shares will represent ~18% of total share capital on admission (before retail offer).

Notable Quotes

• "This financing fully satisfies our outstanding obligations under our loan agreement, positioning us to advance our 2025 capital investment program focused on high-return projects, including drilling on the recently acquired Central block and the installation of the Cascadura compressor." — Paul R. Baay, President and CEO
• "We are grateful for the continued support of our existing investors and are pleased to welcome Purebond as a significant new shareholder in Touchstone. This strategic investment strengthens our financial position and adds valuable expertise to our board through the appointment of Mr. Kansagra, a U.K.-based director with extensive experience in the resource sector and capital markets." — Paul R. Baay, President and CEO