WTI (Feb) $57.32 -10c, Brent (Mar) $60.75 -10c, Diff -$3.43 -22c
USNG (Feb) $3.62 -7c, UKNG (Feb) 72.9p -1.1p, TTF (Feb) €27.655 -€0.805

Oil price

Well, that was the move that shocked but didn’t surprise as Jim Joseph used to say. Few would try and guess how the Venezuela situation will affect international markets but this morning the oil price is virtually unchanged, early projections of a big rise were well wide of the mark. 

Venezuela produces maybe 1m b/d at best and despite the hype about its huge reserves, jacking that up would take time and money, perhaps $5bn might get up to 1.5m b/d. Chevron is clearly the king pin here down to previous investment in country but Exxon and Conoco won’t be far behind as will be Schlumberger and Halliburton et al in the oilfield services companies. 

Historically the country’s heavy crude has been more suited to US refineries that its own lighter grades so a market is guaranteed should the time come. Biggest loser is China, they still only source around 4-5% of their crude from Venezuela but they will have to source elsewhere for the foreseeable future.

Somewhat overshadowed at the weekend was the Opec+ meeting which unsurprisingly left quotas unchanged and until the end of Q3, this won’t pare back the current oversupply so lets see what the March meeting decides. 

And don’t forget whats going on in Iran, domestic protests shouldn’t be ignored and many thought that the US might step in there but two theatres might be too much even for them at one time. Any change of regime there might lead to easing of sanctions although to be honest who would notice given how much they are exporting in the shadows…

Touchstone Exploration

Touchstone has provided an operational update on the Carapal Ridge-3 development well (“CR-3”), located on the Central block onshore in the Republic of Trinidad and Tobago. Touchstone holds a 65 percent operating working interest in the well, with Heritage Petroleum Company Limited holding the remaining 35 percent.

Highlights

• CR-3 is the first well drilled into the Carapal Ridge pool in the past 17 years and encountered approximately 1,082 feet of net sand, including approximately 1,000 feet of net Herrera sand.

• Open-hole wireline logging, mud logging, and drilling data collectively indicate the presence of hydrocarbon-bearing sands throughout the Herrera interval.

• The well encountered a thick pay zone across multiple Herrera horizons, both above and below a shale marker.

• Completion operations are underway, with tie-in to the Central block natural gas processing facility targeted for the first quarter of 2026.

• The well results support the potential for up to three additional Herrera development wells on the Central block.

• CR-3 also established a second, uphole, gas-charged play in the Karamat formation, which is being evaluated as a stand-alone prospect for potential drilling.

The CR-3 well was spud on November 23, 2025, using Star Valley Drilling Rig #205 and was drilled to a total depth of 8,200 feet over a 35-day period. Following open-hole logging operations, the well was cased for future production. Based on initial field-level cost estimates, the well was approximately 25 percent over budget and did not require any sidetrack operations. The additional time and costs were primarily attributable to efforts required to control natural gas flows from the Karamat sands, which have not previously been produced on the Central block.

The primary target of the CR-3 well was the Herrera sands, which are prevalent within the Carapal Ridge pool. CR-3 is the first well drilled into the Carapal Ridge pool in the past 17 years and encountered approximately 1,000 feet of net Herrera sand. The well targeted Herrera sands within the developed reservoir section currently on production above a 30-foot shale marker, as well as unproduced Herrera sands below the shale marker. The lower sands were previously completed and tested, but not produced, by a prior operator in the offsetting Carapal Ridge-1 well. These completion tests, known as tests 4, 5 and 6, flow tested at combined peak average daily test rates of over 20 million cubic feet of natural gas and 500 barrels of condensate for periods of approximately one to two days.

CR-3 encountered approximately 635 feet of net sand in the developed Herrera reservoir at depths between 6,930 feet and 7,770 feet above the shale marker and approximately 365 feet of net Herrera sand below the shale marker within the unproduced reservoir at depths between 7,770 feet and 8,200 feet. Although drilling was terminated at 8,200 feet, the well remained within clean sand at total depth. In addition to the Herrera sands, approximately 82 feet of net Karamat sands were also encountered directly above the Herrara formation at depths between 6,530 feet and 6,760 feet. These Karamat sands are also present in the Carapal Ridge-1 and Carapal Ridge-2 wells.

The well was originally planned as a deviated well targeting the Herrera sands; however, during drilling, the well naturally built angle in the production section and approximately 341 feet was drilled horizontally into the unproduced Herrera sand package, optimizing reservoir exposure. Open-hole wireline logging, mud logging, and drilling data collectively indicate the presence of hydrocarbon-bearing sands throughout the Herrera interval, extending to and including the end of the horizontal section.

Completion operations are underway at CR-3. The Company intends to initially produce the undeveloped Herrera sands from the horizontal section of the well below the shale marker, while the uphole developed Herrera sands may be perforated at a later date. Much of the CR-3 facility tie-in equipment has been procured and is currently in Trinidad, with tie-in to the Central block natural gas processing facility targeted for the first quarter of 2026.

Paul R. Baay, President and Chief Executive Officer, commented:
“The CR-3 well is our inaugural development well on the Central block and the first well drilled on the field in over 17 years. The well was executed successfully by our drilling team and represents our first horizontal well drilled into the Herrera reservoir.

As anticipated, CR-3 encountered hydrocarbon-bearing sands both below and above a key shale marker. We intend to initially produce from the lower horizontal section of the well, with significant volumes of uphole sands available for potential future perforation. While the well has resulted in thick pay zone across multiple horizons, the ultimate deliverability will not be known until the well is completed and tied into the facility. Several variables will influence performance, including the fact that the formation has not previously been produced from a horizontal well and the management of downhole pressures.

Importantly, the well has confirmed both the seismic model and the areal extent of a thick Herrera section. These results are encouraging and support the potential for three additional Herrera wells on the block. The well has also established a second gas-charged play in the Karamat formation at approximately 6,700 feet, which is now being evaluated as a stand-alone prospect for future drilling. We look forward to tying CR-3 into our Central block facility in the quarter to enhance our natural gas sales volumes and realized pricing under our two liquefied natural gas marketing arrangements.“

This is a wonderful start to 2026 for the Touchstone team and its patient shareholders as CR-3 comes in big time, encountering approximately 1,082 feet of net sand, including approximately 1,000 feet of net Herrera sand. The company reports that the well has ‘resulted in thick pay zones across multiple horizons,’ but correctly cautions that ultimately, deliverability will not be known until the well is completed and tied into the facility. 

Also the company states that ‘several variables will influence performance’, including new horizontal technology and importantly confirms the seismic model and the areal extent of a ‘thick Herrera section’. The news includes potential for a second gas-charged play in the Karamat formation, which could be a stand-alone prospect for future drilling. 

With the likelihood of at least three additional wells on the block, the outlook for upcoming drilling is excellent, and what is more ticks a number of my boxes in my list of 9 key targets for the company to achieve after my visit to Trinidad last year. 

One of those boxes involved marketing gas and tying in the CR-3 well into the Central Block facility this quarter and is incredibly positive, indeed, remember that these volumes come under the LNG marketing arrangements and accordingly will achieve a much higher price than traditional gas sales in country. 

So, this find is very positive in a number of ways, apart from the pricing above it means that the purchase of the central Block asset has been more than fully vindicated at stage one. The shares are up some 25% today and this is totally justified and should do more. I have been positive on TXP for a long time and my stance is slowly starting to reap rewards, it may have gone into the Bucket List a tad early but could be a candidate for a top pick for 2026…

Original article   l   KeyFacts Energy Industry Directory: Malcy's Blog