Touchstone Exploration has successfully raised £15.375 million (approximately US$20.5 million) by way of a private placement of 75,000,000 new common shares of no par value in the Company with certain institutional and other investors in the United Kingdom. Touchstone has additionally signed a binding term sheet with its Trinidad based lender, Republic Bank Limited ("RBL"), to provide debt financing for the previously announced  transaction to acquire the entire share capital of Shell Trinidad Central Block Limited.

Private Placement 

The placement price of 20.5 pence (approximately C$0.38) per new common share represents an 11.8 percent discount to 23.25 pence, which was the closing price of the Company's common shares on the AIM market of the London Stock Exchange ("AIM") on May 7, 2025. The new common shares will, when issued, represent approximately 24.1 percent of the total issued share capital of the Company as enlarged by the Private Placement. 

Financing of the Acquisition 

As previously announced, on December 13, 2024 the Company's wholly owned Trinidadian subsidiary, Touchstone Exploration (Trinidad) Ltd. ("TETL") signed a conditional share purchase agreement (the "SPA") to acquire 100 percent of Shell Trinidad Central Block Limited ("STCBL") from BG Overseas Holdings Limited. STCBL holds a 65 percent participating interest in the onshore Central block exploration and production licence, as well as four producing gas wells and a gas processing plant in Trinidad, with state-owned Heritage Petroleum Company Limited holding the remaining 35 percent participating interest. Under the terms of the SPA, on closing Touchstone will pay $23 million in cash plus December 31, 2024 cash and abandonment fund balances, currently estimated to be approximately $30 million. 

TETL has signed a binding term sheet with RBL providing for a new $30 million six-year non-revolving term loan to partially fund the Acquisition. TETL and RBL are currently preparing a Fourth Amended and Restated Loan Agreement and related security registrations. Subject to the execution of the Amended Bank Loan Agreement, Touchstone intends to use the net proceeds from the term loan together with existing cash resources to fund the cash consideration payable under the terms of the Acquisition. The Acquisition is expected to close during the second quarter of 2025. 

The Acquisition 

As first announced on December 13, 2024, the Acquisition will be transformational for Touchstone. Gross field estimated production from the Central block from March 1, 2025 through April 15, 2025 was approximately 17.5 MMcf/d of natural gas and 185 bbls/d of NGLs (approximately 3,075 boe/d), equating to net production of approximately 2,000 boe/d for STCBL.  

Touchstone has assessed the pro forma net working interest reserves in STCBL, as of April 1, 2025 (based on a 65 percent working interest), to be approximately 3.2 MMboe of proved developed producing reserves, 5.1 MMboe of total proved reserves, and 5.6 MMboe of total proved plus probable reserves. These estimates correspond to before tax NPV10 values of approximately $41.7 million, $85.7 million, and $95.5 million, and after tax NPV10 values of approximately $19.4 million, $38.5 million, and $42.9 million, respectively. The estimates are based on reasonable assumptions. Actual results may differ materially from these projections, and all figures remain subject to change and are contingent upon completion of the Acquisition. 

STCBL holds one natural gas marketing contract accessing the Trinidad domestic market, and two natural gas marketing contracts accessing the Atlantic LNG facility in Trinidad. The pricing associated with the LNG contracts is a combination of commodities including Brent oil, Henry Hub natural gas and world LNG pricing. The pricing varies monthly depending on market conditions, which differs from the Company's current natural gas contract, which is a fixed price arrangement for volumes produced from the Ortoire block.  

Following completion of the Acquisition, the Company's initial Central block development plan will focus on the optimization of the four existing wells prior to drilling the two development wells set out above. Combined with the Cascadura development drilling noted above, the Company's 2025 budgeted capital activity has the potential to increase production during the second half of 2025 to between 8,000 and 9,000 boe/d, prior to natural declines. As noted above, revised 2025 guidance will be issued by the Company subsequent to completion of the Acquisition. 

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