Hello Maynard,
Unlike you I am not a “numbers” person so the financials I leave to those like you who have a better grasp of figures. There is an excellent post on predictions and figures from an accountant and someone I am less familiar with on the ADVFN board which I repeat here for interest, so not my work, please note!
Assuming no further dilution nor macro shocks etc I personally foresee:
End 2022 (Coho & Cascadura online at predicted rates ‘on time’ and budget)
Realistic: £1.20 to £1.50 (yes would like more, but surely some factored in?)
Possible: up to £2 (if markets bullish and investor sentiment returns)
Unlikely: £2+ (market gets a bit ahead of itself?)
End 2023 (Extra Coho development well success, Cascadura at 200mmcf/d with no ‘hiccups’):
Realistic: £2.50 to £3.00
Possible: £3+
2023 with further ‘unquestionable success’ at Royston Deep (i.e a ‘good’ hit or two in the sub-thrust and further delineation of intermediate productivity):
Possible: £5+ (i.e clearly demonstrating ‘near-term’ potential and path to 10k+ bopd extra from Royston - with associated large recoverable reserves).
A prolific hit at Kraken, with flow rates in the thousands bpd?
Possible: £5 - £10+
Combine with further any significant exploration success at Steelhead, Gaubine, Bass, or Chinook (turns into a world class oil find instead of a world class gas/water disappointment i.e another Cascadura size commercial find).
Possible: £10+
Add in a potential positive change to the tax regime and who knows…
The following reply was also posted (more on the production figures + relevant prediction of figures):
BACK OF MY NAPKIN
Legacy Production- 1336 bpd
Using a conservative net back of $25/bbl at present prices, we had annual net earnings of $6.5M. If we assume that legacy production remains the same for all the doubters out there. The EPS was $0.03 for 2021.
Coho- Production @ 8 MMcf per day or 1333 bpd -
Free Cash Flow- $400,000 per month or $4.8M annually
Cascadura 1ST1 - 30MMcf per day (conservative estimate)
Free cash flow- $1.5M per month or $18M annually
Cascadura Deep- 30 MMcf per day
Free cash flow- $1.5M per month or $18M annually
NGL from both Cas 1 and Cas Deep projected as 750 bpd and 450 bpd respectively
For total NGL of 1200bpd and a net back of $40 per barrel
Assume annual net earnings of $6.0M
Going into 2023, Touchstone should be able to generate free cash flow in the region of 50M to 55M annually or EPS in the region of $0.25 per share.
Normally for oil and gas companies PE ratios are not used due to companies in the sector running with high debt. But TXP doesn’t have a lot of debt. Typically for O&G companies PE ratios average about 15. So using this ratio, it means that we should see the share price rise to at least US$3.75 by the end of 2022. And, assuming the Money Machine cranks up at least 3 fold by the end of 2023 and Coho 2 comes online, we are gonna be looking at EPS of about $0.75 which should support a share price of about USD$11.25.
All of this doesn’t include one barrel of oil from Royston.
So I agree with the tantalizing point you mention in the last paragraph based on current 3P figures. However, the potential in the Ortoire block is HUGE. There are so many prospects and so far they have done brilliantly with the drill bit. The delays monetizing the first two finds have created weakness in the price & there is a fairly large short on the stock at the moment too. Once these are closed (reduced) & news comes of the first income from Coho then Cascadura I think we should see a return in sentiment towards the company & a higher share price. After that the development of the Cascadura find + other new tragets around Coho that were mentioned in the last presentation (new targets!) will just keep adding to the story. As I said, long term should be kind to share holders. I certainly hope so anyway!
PS. Short = Mar 2022____7.77% (8.14 million short down from 9.02 million in Feb)
