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    Touchstone Puts its Money on Trinidad Gas


The Canadian producer is looking for a hedge against volatile crude prices.

by: William Powell

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Natural Gas & LNG News, Americas, Premium, Corporate, Exploration & Production, News By Country, Trinidad and Tobago

Touchstone Puts its Money on Trinidad Gas

Canada's Touchstone Exploration saw its Trinidad & Tobago oil production hit hard in the second quarter. It reported August 14 a loss of $2.74mn, about three times bigger than in Q2 2019 as it switches to gas output to protect it from volatile crude prices. 

Operating netbacks were down by $2.95mn, partly offset by savings in royalties and operating costs. Average daily crude production of 1,396 barrels/day was down from 1,589 b/d in Q1 and from 1,768 b/d in Q2 2019, although it did make reductions in operating and administrative expenses.

Touchstone will continue to let crude output slide as it focuses its funds on gas production at its Ortoire block, rather than combating field declines. It sees gas as less exposed to price volatility and it will bring its two natural gas exploration discoveries, Chinook and Coho, into production "as soon as possible."

It invested $1.25mn in Ortoire, mainly on Chinook-1 lease preparations and Coho-1 tie-in operations: it spudded the Chinook-1 exploration well August 13. The well is expected to take 40 days to reach its target. 

Touchstone has an 80% working interest in the well but is responsible for 100% of the drilling, completion and testing costs associated with the well. Heritage Petroleum holds the remaining 20% working interest.

CEO Paul Baay said the Chinook well, east of the Coho discovery, marked "the next phase of our Ortoire block exploration programme that has already delivered two successful natural gas wells in just over a year." Other work across the Ortoire block includes commissioning the Cascadura area independent reserves evaluation and starting the Coho-1 tie-in project.

It is working with the National Gas Company of Trinidad and Tobago to identify the optimal tie-in point for petroleum volumes from the Cascadura discovery. The final project design is contingent upon the drilling results from Chinook-1 and Cascadura Deep, as it is anticipated that any potential additional petroleum volumes would be aggregated to one gathering system.