Touchstone Exploration Announces 2023 Year-End Reserves

CALGARY, AB / ACCESSWIRE / March 1, 2024 / Touchstone Exploration Inc. ("Touchstone", "we", "our" or the "Company") (TSX, LSE:TXP) announces 2023 year-end reserves.

Touchstone's independent reserves evaluation was prepared by GLJ Ltd. ("GLJ") with an effective date of December 31, 2023 (the "Reserves Report"). Highlights of our total proved developed producing ("PDP"), total proved ("1P"), total proved plus probable ("2P") and total proved plus probable plus possible ("3P") reserves from the Reserves Report are provided below. Unless otherwise stated, all financial amounts referenced herein are stated in United States dollars. Financial information contained herein is based on the Company's unaudited results for the year ended December 31, 2023 and is subject to change. Readers are further cautioned to read the applicable advisories contained herein.

Touchstone's 2023 year-end reserves reflect the initial transition of our Cascadura production base into the PDP reserves category as we brought onstream the first two Cascadura wells, Cascadura-1ST1 and Cascadura Deep-1. In addition to successfully constructing and commissioning the Cascadura natural gas and liquids facility in 2023, we also prepared for our Cascadura C delineation and development program.

In 2023 we achieved initial production from our Cascadura field which produced net volumes of 37.4 MMcf/d of natural gas and 622 bbls/d of natural gas liquids in the fourth quarter of 2023, contributing to corporate average quarterly net production volumes of 8,504 boe/d and average 2023 annual net production volumes of 3,981 boe/d.

2023 Year-end Reserves Report Highlights

• Relative to year-end 2022 and after 2023 production, we increased gross PDP reserves by 180 percent to 13,547 Mboe, decreased gross 1P reserves by 12 percent to 33,696 Mboe, decreased gross 2P reserves by 10 percent to 67,379 Mboe and decreased gross 3P reserves by 10 percent to 108,859 Mboe in 2023.
• PDP reserves replaced 2023 annual production by 699 percent, reflecting Cascadura-1ST1 and Cascadura Deep-1 natural gas and associated liquids volumes that were brought online in 2023.
• With the addition of Cascadura property reserves, PDP reserves represent 40 percent of 1P reserves, reflecting an attractive ratio of base production to low risk proved undeveloped ("PUD") drilling targets.
• Reductions in our 1P, 2P, and 3P year-end reserves balances from 2022 reflected the removal of eight PUD locations on our non-core legacy crude oil blocks and Royston, technical revisions to the natural gas liquids yields at Cascadura, increased annual production volumes in 2023 and a limited 2023 development capital program.
• Our net present value of future net revenues discounted at 10 percent ("NPV10") on a before tax PDP basis increased by 142 percent to $151.4 million, decreased by 30 percent to $372.5 million on a 1P basis, decreased by 27 percent to $730.1 million on a 2P basis, and decreased by 29 percent to $1.05 billion on a 3P basis from the prior year.
• Realized after tax PDP NPV10 of $99.8 million representing an increase of 93 percent from the prior year, after tax 1P NPV10 decreased by 25 percent from year-end 2022 to $191.4 million, after tax 2P NPV10 decreased by 24 percent from the prior year to $342.5 million and after tax 3P NPV10 decreased by 26 percent from 2022 to $482.6 million.
• We continue to maintain a long producing reserve life index of 7.9 years 1P and 14.4 years 2P, reflecting the low decline nature of our asset base.
• The Cascadura-2 well was drilled subsequent to the effective date of the Reserves Report and will be reflected in our future reserve evaluations.

2023 Year-end Reserves Report Summary

Touchstone's year-end light and medium crude oil, heavy crude oil, conventional natural gas and natural gas liquid reserves in Trinidad were evaluated by independent reserves evaluator, GLJ, in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGE Handbook") and National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Additional reserves information as required under NI 51-101 will be included in the Company's Annual Information Form, which will be filed on SEDAR+ (www.sedarplus.ca) on or before March 30, 2024.

The reserve estimates set forth below are based upon GLJ's Reserves Report dated February 29, 2024 with an effective date of December 31, 2023. The Reserves Report uses the average price forecasts of the three leading Canadian oil and gas evaluation consultants (GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Ltd. (collectively, the "Consultants")). All values in this news release are based on the three Consultants' average forecast pricing and GLJ's estimates of future operating and capital costs as of December 31, 2023. Please refer to "Advisories: Reserves Disclosure" for further information. In certain tables set forth below, the columns may not add due to rounding.

2023 Reserves Summary by Category

^Notes:

^{(1) Gross reserves are the Company's working interest share before deduction of royalties.
(2) Reserve additions (reductions) exclude 2023 annual production. See "Advisories: Oil and Gas Metrics".
(3) Based on the Consultants' average December 31, 2023 forecast prices and costs. See "Forecast prices and costs" herein}

Year-Over-Year Reserves Data

^Notes:

^{(1) Prior year reserve estimates per GLJ's independent reserves evaluation dated March 3, 2023 with an effective date of December 31, 2022.
(2) Gross reserves are the Company's working interest share before deduction of royalties.
(3) Based on the three Consultants' average December 31, 2023 forecast prices and costs. See "Forecast prices and costs" herein.}

Summary of Crude Oil and Natural Gas Reserves by Product Type