Touchstone Exploration Announces Second Quarter 2025 Results

Executive Summary

• Touchstone Exploration Inc. reported its financial and operating results for the three and six months ended June 30, 2025, highlighting a strategic acquisition of Shell Trinidad Central Block Limited and a subsequent private placement of convertible debentures.
• The company reported a net loss of $0.71 million for Q2 2025, driven by a 22% decrease in petroleum and natural gas sales and increased operating expenses, while production averaged 4,399 boe/d.
• Management updated its 2025 guidance, significantly lowering the midpoint for average daily production to 5,600 boe/d (from 7,000 boe/d) and funds flow from operations to $11 million (from $22 million), citing the impact of the Central Block acquisition and deferred drilling.

Key Details

• Strategic Acquisition: Completed the acquisition of Shell Trinidad Central Block Limited, adding approximately 1,910 boe/d of liquids-rich natural gas production and providing access to global LNG pricing.
• Q2 2025 Production: Averaged 4,399 boe/d (69% natural gas), compared to 4,317 boe/d in Q1 2025 and 5,432 boe/d in Q2 2024. Q2 volumes included ~1.5 months of production from the Central block acquisition.
• Q2 2025 Financials:
  • Petroleum and Natural Gas Sales: $11.01 million (down 22% from $14.1 million in Q2 2024).
  • Crude Oil Sales: $6.08 million from 1,142 bbls/d at $58.52/bbl.
  • NGL Sales: $0.68 million from 210 bbls/d at $35.40/bbl.
  • Natural Gas Sales: $4.25 million from 18.3 MMcf/d at $2.55/Mcf.
  • Operating Netback: $5.04 million (down 38% from Q2 2024), with an operating netback of $12.59/boe.
  • Funds Flow from Operations: $1.43 million (down from $3.97 million in Q2 2024).
  • Net Loss: $0.71 million ($0.00 per share), compared to net earnings of $3.34 million in Q2 2024.
• Capital & Financing:
  • Capital Investments: $4.66 million, primarily for the Cascadia-5 development well.
  • Private Placement (Q2): Raised net proceeds of $5.22 million from issuing 24,636,585 common shares at 20.5 pence sterling (~C$0.38) per share.
  • Convertible Debenture Offering (Post-Period): Closed a $12.5 million private placement of convertible debentures and common share purchase warrants on August 13, 2025. Proceeds will fund the remaining 2025 Cascadia development drilling program and reduce accounts payable.
  • Net Debt: Increased to $63.89 million at June 30, 2025, reflecting the close of the Central block acquisition funded by an additional $30 million term loan facility.
• 2025 Updated Guidance:
  • Capital Expenditures: Updated to $28 million (up from $23 million original).
  • Average Daily Production: Updated to 6,700–7,300 boe/d (midpoint 5,600 boe/d), down from original midpoint of 7,000 boe/d.
  • Funds Flow from Operations: Updated to $11 million, down from $22 million original.
  • Net Debt (End of Year): Updated to $64 million, up from $30 million original.
  • Strategy Change: The 2025 capital program now replaces two Cascadia wells with one Central Block well and two WD-8 property wells. An additional equity financing of ~$7.3 million is expected to close before year-end to satisfy loan agreement obligations.
• Post-Period Production Update: July 2025 field-estimated production averaged 5,281 boe/d (up 3.8% from June's 5,088 boe/d), including 22.3 MMcf/d of net natural gas and 1,564 bbls/d of net crude oil and liquids.