Co Corporate Pre resentation November 2019 2019 “Driving growth, profitability and responsibility in the Trinidad oil and gas industry” LSE / TSX: TXP 1
Forward Looking Information Unless otherwise stated, all financial amounts herein are presented in United States dollars (“ $ ”) . The Company may also reference Canadian dollars (“C $ ”), Trinidad and Tobago dollars (“TT $ ”) and Pounds Sterling (“ £ ”) herein. Certain information regarding Touchstone Exploration Inc. (“Touchstone” or the “Company”) set forth in this presentation, including assessments by the Company’s Management of the Company’s plans and future operations contains forward-looking statements that involve substantial known and unknown risks and uncertainties. All statements other than statements of historical fact may be forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and other similar expressions. Statements relating to “reserves” and “resources” are deemed to be forward-looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and can be profitably produced in the future. The Company has a reasonable basis for disclosing such statements, which represent the Company’s internal projections, estimates or beliefs concerning future growth, and results of operations. With respect to forward looking information contained in this presentation, the Company has made assumptions regarding, among other things: production rates and production decline rates; the success of exploration opportunities; the magnitude of and ability to recover oil and gas reserves; plans for and results of drilling activity; well abandonment costs; the ability to secure necessary personnel, equipment, production licences and services; environmental matters; future commodity prices; changes to prevailing regulatory, royalty, tax and environmental laws and regulations; the impact of competition, future capital and other expenditures (including the amount, nature and sources of funding thereof); future financing sources; and business prospects and opportunities, among other things. Many of the foregoing assumptions are subject to change and are beyond the Company's control. Some of the risks that could affect the Company's future results and could cause results to differ materially from those expressed in the forward looking information are described under the heading “Business Risks” in this presentation. New factors emerge from time to time, and it is not possible for Management to predict all of such factors and to assess in advance the impact of each such factor on Touchstone’s business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In particular, forward-looking statements contained in this presentation may include, but are not limited to statements with respect to: the Company’s operational strategy, including targeted jurisdictions and technologies used to execute its strategy; the success of any new exploration opportunities; production levels; the quantity and estimated commerciality of the Company’s reserves; drilling and recompletion plans and the anticipated timing thereof; and activities to be undertaken in various areas. Investors should not place undue reliance on any such forward-looking statements or information. Further, any forward-looking statement or information speaks only as of the date on which such statement is made, and Touchstone undertakes no obligation to update any forward-looking statements or information except as required by law, including securities laws. All forward-looking statements and information contained in this presentation are qualified by such cautionary statements. 2
Why invest in Trinidad? ➢ Proven oil reserves of approximately 200 million barrels as at year-end 2018 (1) ➢ Largest oil and gas producer in the Caribbean, generating 87,000 barrels of crude oil per day in 2018 (1) The 8 th largest exporter of Liquified Natural Gas in the world (2) ➢ ➢ Mature infrastructure as a result of exposure to major oil companies including Shell, BP and ENI ➢ 11 km. from Venezuela, the largest oil reserves in the world 3
Why invest in Touchstone? ➢ Proven and experienced management team ➢ Focused strategy onshore Trinidad oil and gas ➢ Positive funds flow from operations (9) ➢ World class exploration opportunities providing major upside 4
Our Five Pillar Corporate Vision Exploration Upside Scalable Economic Growth Value Creation Environmental Stewardship Community Leadership 5
Land Position 6
Exploration Upside Scalable Economic Growth Value Creation Environmental Stewardship Community Leadership 7
Exploration Upside – Ortoire Block “Four world class exploration prospects - low risk, high reward, and a potentially transformational program” Cas Cascadura-1 Ch Chinook Royston Coho-1 Oil Prospect Gas Discovery Oil Prospect Gas Prospect 17.5 mmcf/d (5) Constructing Drilling 8
Ortoire Block 80% working interest and 35,785 net working interest acres ➢ Production test results from Coho-1 show an average of 17.5 mmcf/d during flowback, 19.8 mmcf/d peak (5) ➢ Drilling of our first exploration oil prospect has commenced at Cascadura-1 ➢ Lease preparation of our second oil prospect is underway at Chinook-1 Balata East Gas target 10 mmbbls Oil traget CASCADURA-1 ROYSTON-1 CHINOOK-1 COHO-1 Navette Catshill Central Block 60 mmbls 30 mmbbls 500 bcf 25 mmboe Liquids 9
Company Working Interest 80% Unrisked Ortoire Resource Low Estimate Best Estimate High Estimate Evaluation (4) Recoverable Volumes Contingent Resources (Development Pending) Residue (Natural) Gas (MMcf) 6,552 10,584 16,128 Oil (Mbbls) 396 944 2,190 Oil Equivalent (Mboe) 1,575 3,002 5,576 Recoverable Volumes Prospective Resources (Prospect) Residue (Natural) Gas (MMcf) 14,789 64,267 170,359 Independent resource Oil (Mbbls) 1,584 6,240 18,768 evaluation forecasts peak Oil Equivalent (Mboe) 4,394 18,801 53,204 net production of over 10% Net Present Value (C$000's) 16,500 boepd based on Contingent Resources 10,585 35,434 86,860 unrisked, high estimates Prospective Resources 31,410 219,666 649,688 Future Development Capital (Undiscounted)(C$000's) Contingent Resources 17,670 24,519 31,331 Prospective Resources 59,853 122,983 229,158 Peak Daily Oil Production (boepd) Contingent Resources 832 1,439 2,375 Prospective Resources 2,042 8,640 16,673 10
COHO-1 Transformational Gas Discovery (5) Flowback Testing FISCAL ADVANTAGE: NATURAL GAS 17.5 mmcf/d Average Trinidad Domestic Price 19.8 mmcf/d Peak 12.5% Crown Royalty 23% Drawdown No Supplemental Petroleum Tax COHO Extended (24-hr) Production Test 11.8 mmcf/d Average 18% Drawdown 11
Shell Trinidad Limited Balata West 5 (BW-5) CASCADURA-1 c. 1958 Oil Prospect Offsetting well drilled in 1958 produced 27,000 Upper sheet produced barrels of oil from the c. 27,000 bbls upper most Herrera sand sheet (6) CASCADURA-1 Lower sheet untested 12
Shell Trinidad Limited Shell Trinidad Limited BW-7, 7X & CHIN-1 Balata West 7 (BW-7) BW-7X Sidetrack CHINOOK-1 Spud: May 20, 1959 TD: August 18, 1959 BW-9 Oil Prospect The original well drilled in 1959 encountered oil on core and free oil BW-7X CHINOOK-1 while drilling BW-7 • 1,172’ Gross Herrera thickness • • Oil observed on core 1,552’ Gross Herrera thickness • • Interpreted to be uneconomic at Free oil while drilling • time and sidetracked “severe tectonics” (bed angles) • • Not tested Not tested 13
Shell Trinidad Limited Ortoire Lizard Springs (OL-4) synclinal ROYSTON-1 c. 1965 basin Gas Prospect Original well drilled in 1965 and logs indicated 700 feet of gas effect but was never tested P10 Case P50 Case P90 Case ROYSTON-1 LOC 14
Scalable Economic Growth Exploration Upside Value Creation Environmental Stewardship Community Leadership 15
Scalable Economic Growth “A 20 - year drilling programme providing Touchstone with a strong organic growth platform” 19 19 Onshore blo blocks 10 Producing fie 10 ields 208 208 Dr Dril illi ling locations (7) 16
200 10 100, 0,000 bbl bbl Cur Curve Econ onomic ics* s* (8 ) Well Type Curves 180 2017 & 2018 drilling IRR 46% economics 160 Payout 1.7 years Operating 140 ~$32/bbl Netback (10) Oil Rate (bbls/d) Repeatable and 120 Recycle Ratio 2.1x predictable production 100 Capital $1.1MM 80 60 40 20 0 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Cumulative Oil (bbls) 100,000 bbl Curve Average 2017 Well (4) Average 2018 Well (11) * Based on $65/bbl Brent pricing, 11% sales price differential and operating costs of $12/bbl . 17
2,500 Corporate Production January 2017 to October 2019 2,000 Crude Oil Production (bbls/d) 15 new development wells drilled since admission to AIM 2018 - 11 New Wells - achieving production growth 1,500 of 30% (9) 2017 – 4 New Wells Recompletions 1,000 Base production 500 Swab production 0 18
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