WTI (Dec) $71.47 +$1.98, Brent (Jan) $75.08 +$1.98, Diff -$3.61 u/c. 
USNG (Dec) $2.79 +12c, UKNG (Dec) 103.19p +1.63p, TTF (Dec) €40.57 +€0.98.

Oil price- US Election Day

Oil rallied sharply yesterday and don’t try and tell me it was because the market suddenly ‘got’ the Opec announcement that it was not going to release the fabled 180/- b/d in December. More likely that the recalcitrant countries saying that they would ‘reaffirm their commitment to the cartel and return to full compliance by September 2025…

Touchstone Exploration

Touchstone has announced that Primera Oil and Gas Limited, our wholly owned Trinidadian subsidiary, executed an Exploration and Production (Public Petroleum Rights) licence for the Rio Claro block on November 4, 2024.

The Rio Claro Licence has been formally entered into by POGL, the Government of Trinidad and Tobago, the Trinidad and Tobago Ministry of Energy and Energy Industries (“MEEI”), and a subsidiary of the National Gas Company of Trinidad and Tobago (“NGC”). POGL holds an 80 percent operating working interest in the Rio Claro Licence, while NGC retains the remaining 20 percent. Like the Company’s Charuma, Cipero and Ortoire licences, the Rio Claro Licence initially has a six-year exploration term, with the possibility of a 19-year extension for areas where commercial discoveries are approved by the MEEI.

Strategically located adjacent to the Company’s Ortoire block, the Rio Claro Licence acreage surrounds the recently acquired Balata East field, marking a vital extension of Touchstone’s exploration and development focus within the Herrera Formation fairway. Proprietary seismic data highlights several promising Herrera Formation anomalies, which extend from the Ortoire block into the Rio Claro Licence acreage, situated in structurally favorable up-dip positions. Notably, Touchstone’s Cascadura-3ST1 discovery within the Ortoire block appears to extend into the Rio Claro block. Furthermore, seismic interpretation reveals that both the Royston anomaly in the Herrera Formation and the Kraken anomaly in the Cretaceous Formation extend into the Rio Claro Licence acreage.

With existing sales infrastructure at Ortoire and Balata East, any future discoveries of liquid hydrocarbons or natural gas within the Rio Claro block can be seamlessly integrated into production.

Paul R Baay, President and Chief Executive Officer, commented:
“The issuance of the Rio Claro License aligns with the commencement of production from the Cascadura C well pad. 3D seismic data indicates that a substantial portion of the Cascadura structure extends into the Rio Claro License area. This creates a significant opportunity, as any potential natural gas discoveries on this block can seamlessly integrate into our newly commissioned gathering system at the Cascadura C location, situated near the western boundary of the Rio Claro acreage. Notably, these resources will be marketed under a distinct natural gas arrangement, separate from our existing Ortoire agreement.

Subject to regulatory approvals, we anticipate drilling the first commitment well on this block originating from the Cascadura pad C surface location and targeting a bottom-hole location within the new Rio Claro License.

Beyond its strategic alignment with the Cascadura field, the Rio Claro property adds considerable value by granting us full control over the Kraken Cretaceous prospect. Additionally, it enhances our position on the highly prospective Herrera fairway, with updip closures on several promising prospects.“

It seems like that it was only yesterday as we drove through the country of Trinidad, our team leader telling us that we were about to physically cross over the Rio Claro licence. I say this to be able to put into perspective how important this news is, as we were driving through the Cascadura field at the time and knowing now that this valuable piece of real estate was genuinely adjacent is very important.

The geological thinking is that the likelihood is that the Cascadura structure extends into the Rio Clara block. It marks  ‘a vital extension of Touchstone’s exploration and development focus within the Herrera Formation fairway. Proprietary seismic data highlights several promising Herrera Formation anomalies, which extend from the Ortoire block into the Rio Claro Licence acreage, situated in structurally favorable up-dip positions’.

Touchstone’s Cascadura-3ST1 discovery within the Ortoire block appears to extend into the Rio Claro block. Furthermore, seismic interpretation reveals that both the Royston anomaly in the Herrera Formation and the Kraken anomaly in the Cretaceous Formation extend into the Rio Claro Licence acreage.

Notably, Touchstone’s Cascadura-3ST1 discovery within the Ortoire block appears to extend into the Rio Claro block. Furthermore, seismic interpretation reveals that both the Royston anomaly in the Herrera Formation and the Kraken anomaly in the Cretaceous Formation extend into the Rio Claro Licence acreage.

The company has also said that with existing sales infrastructure at Ortoire and Balata East, any future discoveries of liquid hydrocarbons or natural gas within the Rio Claro block can be ‘seamlessly integrated into production’ which we could see as we stood in the field next to Rio Claro. Indeed it actually gets better as at present gas sales are mandated into the domestic market, this could change as sales from Rio Claro might be able to be sold into the more lucrative LNG market.

So, I’m very happy that things are going so well for Touchstone who now have a 6 year exploration term and a possible 19 year extension on an approved commercial discovery. We have identified its proximity to existing production, the ability to ‘seamlessly integrate into production’ on success and its added value of its gas on production so what’s not to like?

As I have recently commented a couple of times I see a bright future for Touchstone and now that its canny investments are beginning, slightly belatedly, to bear fruit I think that investment here will be a wise decision. 

In January 2023, POGL entered into an asset exchange agreement with a privately held Trinidadian entity, involving the exchange of specific onshore assets in Trinidad with no cash consideration. Under the terms of the initial agreement, POGL agreed to transfer its 100 percent working interests in the Fyzabad, San Francique, and Barrackpore producing blocks in exchange for the counterparty’s working interests in the Rio Claro Licence, Balata East, and Balata East Deep Horizons blocks.

The asset swap was contingent upon the counterparty obtaining an extension of the Rio Claro Licence. However, due to regulatory delays in securing the extension, the parties amended the agreement in October 2023. This supplemental agreement divided the asset swap into two potential exchanges. The first exchange, involving POGL’s 100 percent working interest in the privately leased San Francique field for the counterparty’s 100 percent working interest in the Balata East block, was completed effective June 1, 2024. As POGL directly negotiated the Rio Claro Licence with the MEEI, the completion of this negotiation marked the conclusion of the transaction, and the second asset exchange, which lapsed on August 31, 2024, will no longer be pursued by Touchstone.

Notes:

(1) POGL is responsible for 100 percent of the exploration minimum work commitments and financial obligations over the initial six-year exploration term of the Rio Claro Licence.
(2) Financial obligations represent estimated amounts payable pursuant to the Rio Claro License, which include bonuses, lease payments and surface rental costs over the initial six year licence term.

Corcel

Antoine Karam has resigned as a NED at Corcel which I mention as I have been following the company lately and note that given the strategy move in Angola and recent successful raise is another repositioning for the future. My rock analysing spies tell me that Block 16 could well be the stuff dreams are made of so watch this space…

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog