Touchstone Exploration has provided updates on its bank debt and drilling operations.
Bank Debt
Touchstone's wholly owned Trinidadian subsidiary, Touchstone Exploration (Trinidad) Ltd., has entered into a binding term sheet with our existing Trinidad-based lender providing for an increase in borrowing capacity of $13 million (the 'Amended Bank Loan'). The parties are currently documenting an amended and restated bank loan agreement and related security registrations, following which the additional credit capacity will become effective.
The principal changes included in the Amended Bank Loan are as follows:
- a new $10 million five-year non-revolving term loan facility, with no principal repayment in the first year and sixteen equal and consecutive quarterly payments thereafter; and
- an increase in our current revolving loan facility borrowing capacity from $7 million to $10 million, which will mature two years from the execution date and may be renewed at the option of the parties thereafter.
Following execution of the Amended Bank Loan, Touchstone's facilities will consist of its unchanged existing seven-year term loan facility, the new five-year $10 million term loan facility, and the increased $10 million revolving loan facility.
The existing seven-year non-revolving term loan facility has a current principal balance of $21 million, with fourteen equal and consecutive quarterly principal payments of $1.5 million outstanding through to the June 15, 2027 maturity date. We have $7 million drawn on our revolving loan facility, resulting in an aggregate $28 million in bank debt principal currently outstanding.
We intend to use the additional Amended Bank Loan facility borrowing capacity to finance our 2024 capital program as presented in our December 19, 2023 news release entitled "Touchstone Announces 2024 Capital Budget, Preliminary 2024 Guidance and an Operational Update".
Drilling Operations
Touchstone has commenced drilling the Cascadura-3 development well and the CO-374 development well. Cascadura-3 was spud on March 1, 2024 from our Cascadura C surface location on the Ortoire block in which we have an 80 percent working interest. The well is targeting gas-charged sands in the Herrera formation northeast of the recently drilled Cascadura-2 well and is expected to be drilled to an anticipated total depth of 7,000 feet using Star Valley Rig #205. CO-374 was spud on February 28, 2024 on our CO-1 block, in which we have a 100 percent working interest. The well is targeting crude oil-charged sands in the Cruse and Forest formations and is expected to be drilled to a total depth of 6,600 feet using PCSL Rig #8.
The Cascadura-2 well has been successfully cased after we encountered wellbore instability issues due to high gas pressures which resulted in the need to sidetrack a portion of the well. Operations are proceeding on the road and pipeline right-of-way which will tie-in the Cascadura development wells to our Cascadura natural gas facility. This project includes the preparation of the Cascadura B surface location, which has been approved for the drilling of up to four additional development wells.
Source: Touchstone Exploration
