LONDON (ShareCast) - (Sharecast News) - Touchstone Exploration reported a significant rise in production in its second quarter on Friday, with average volumes reaching 1,827 barrels of oil equivalent per day, although its financials took a hit thanks to a decline in crude sales.
The AIM-traded firm said that made for growth of 29%, compared to the 1,420 equivalent daily barrels produced in the same period in 2022.

In terms of natural gas production, the Coho-1 well played a substantial role, having an average net volume of 4.2 million cubic feet per day, translating to 703 equivalent daily barrels for the quarter.

That resulted in net natural gas sales of $0.81m, priced at an average of $2.11 per million cubic feet.

However, the company saw a downturn in realised petroleum and natural gas sales, which stood at $7.18m, showing a sharp contrast to the $12.6m during the second quarter of last year.

The drop was put down to a decline in crude oil sales, which saw a decrease of 36% in pricing and a 21% reduction in production.

Touchstone's operating netback totalled $2.83m, marking a 51% year-on-year decrease, mainly due to the 43% fall in petroleum and natural gas sales.

The firm's funds flow from operations for the quarter was $6,000, a decline from both the preceding quarter's $0.8m and the $1.15m of the second quarter of 2022.

Financially, the company reported a net loss of $71,000 for the quarter, but recognised a comprehensive income of $136,000.

That made for a recovery from the second quarter of last year, where they experienced a net loss of $0.26m and a comprehensive loss of $0.53m.

Touchstone said it made significant capital investments in the period, spending $5.14m during the quarter.

The primary allocation of the funds was towards the construction of the Cascadura natural gas and liquids facility and two Royston-1X production tests.

To enhance liquidity, Touchstone amended its Trinidad-based loan agreement in May, integrating an additional $7m revolving loan component.

The component was fully utilised by June, primarily to aid the ongoing construction of the Cascadura facility.

Touchstone concluded the quarter with a cash balance of $10.14m, and reported a bank debt principal balance of $31m, resulting in a net debt position of $28.91m.

"I am pleased to provide an update on our financial and operational results for the second quarter of the 2023 financial year," said president and chief executive officer Paul Baay.

"The results come as we continue to focus our efforts on the commissioning of the Cascadura facility and completing production testing at Royston-1X.

"We look forward to providing shareholders with further updates in the near term."

At 0821 BST, shares in Touchstone Exploration were down 3.61% at 80p.

Reporting by Josh White for Sharecast.com.

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