CALGARY, ALBERTA - Touchstone Exploration Inc. ('Touchstone' or the 'Company') (TSX, LSE: TXP) announces that the Company launched a private placement in Canada (the 'Canadian Private Placement') at 5 p.m. EST on December 5, 2022 to raise a minimum of C$7.5 million (approximately US$5.5 million and GBP4.5 million) up to a maximum of C$10 million (approximately US$7.4 million and GBP6.1 million) at a price of C$0.90 (approximately 54.5 pence) per Common Share (as defined below) of no par value (the 'Canadian Placement Shares').
The Company further announces a proposed placing in the UK (the 'UK Placing') to raise approximately US$5.5 million (approximately GBP4.5 million and C$7.4 million) through the issue of Common Shares (as defined below) of no par value (the 'UK Placing Shares') with institutional and other investors in the United Kingdom at a price of 54.5 pence per UK Placing Share (approximately C$0.90) (the 'Placing Price'). The Canadian Private Placement and the UK Placing (collectively, the 'Fundraise') are expected to raise aggregate gross proceeds of between US$11 million (approximately GBP9 million and C$14.9 million) and US$13 million (approximately GBP10.6 million and C$17.5 million) to allow Touchstone to accelerate its Ortoire exploration and development program.
In the event of excess demand, the Company reserves the right to increase the size of the UK Placing and/or the Placing Price. The UK Placing is being completed by way of an accelerated book building process (the 'Bookbuild') and UK Placees (as defined below) will be subscribing for Common Shares pursuant to the terms and conditions set out in the Appendix to this announcement. Shore Capital and Canaccord (each as defined below) are acting as Joint Bookrunners in connection with the UK Placing. The Bookbuild in respect of the Canadian Private Placement and the UK Placing is expected to close on or around 3.00 p.m. London Time (10.00 a.m. EST) on December 6, 2022 but the timing of the closing of the Bookbuild for the UK Placing is at the absolute discretion of the Joint Bookrunners and the Company.
Background to the Fundraise and Use of Proceeds In recent years, the Company has been focusing on its successful exploration and development program on the Ortoire block, onshore in the Republic of Trinidad and Tobago (Touchstone 80% working interest), which has identified significant natural gas discoveries at the Coho and Cascadura projects and an oil discovery at Royston. Touchstone recently completed the development of its facility at Coho and announced initial natural gas production on October 10, 2022, with the Coho-1 well delivering average net natural gas sales of 7.3 MMcf/d (approximately 1,212 boe/d) over 19 operational days in October. On August 16, 2022, the Company received a Certificate of Environmental Clearance ('CEC') to conduct development operations within the Cascadura area of the Ortoire block from the Trinidad and Tobago Environmental Management Authority. The CEC approved the construction of a multi-well surface production facility with a designed production capacity of 200 MMcf/d of natural gas, 5,000 bbls/d of associated liquids and 200 bbls/d of produced water, with a storage capacity of 8,800 barrels of liquids on the Cascadura A wellsite. In addition to the facility, the CEC includes the drilling of up to eight wells on two additional well pads (Cascadura B and C) and the establishment of associated pipelines and infrastructure within the Ortoire block. Construction of the Cascadura surface facility and associated infrastructure required to bring production online from the two existing Cascadura wells is in progress. Once production at Cascadura is online, which the Company anticipates will be by the end of the first quarter of 2023, initial gross aggregate natural gas and associated liquids production from the Cascadura-1ST1 and Cascadura Deep-1 wells, based on previous well tests, has been forecasted at approximately 11,500 boe/d (9,200 boe/d net). In addition to the development of the Cascadura facility, the Company has a portfolio of further exploration and development drilling targets at the Ortoire block. In order to allow the Company to continue to accelerate these prospective exploration, development and production opportunities while the Company's cash balance and cash flows from operations are being allocated towards the Cascadura facility construction, Touchstone is seeking to complete the Canadian Private Placement and the UK Placing in order to side track Royston-1ST1 to drill and test the intermediate and subthrust sheets of the Herrera Formation. Net proceeds will also be applied to bring forward the drilling and potential completion of the Cascadura-2 development well. The funds raised will strengthen the Company's balance sheet and the Company also intends to use a portion of the net proceeds for working capital purposes as it continues constructing the Cascadura facility.
Admission and Settlement
Application will be made for the Canadian Placement Shares and the UK Placing Shares to be admitted to trading on AIM ('Admission') and the Toronto Stock Exchange (the 'TSX'). It is expected that Admission will take place at or around 8.00 a.m. (London time) on December 14, 2022 (or such later date as may be agreed between the Company, Shore Capital and Canaccord). The UK Placing is conditional upon, inter alia, the completion of the Canadian Private Placement and Admission becoming effective. The UK Placing is also conditional upon the Placing Agreement not being terminated in accordance with its terms. UK Placing Shares issued in connection with the UK Placing will be subject to a four-month and one day restricted hold period which will prevent such UK Placing Shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement. Any such UK Placing Shares will otherwise be freely transferable. This announcement should be read in its entirety. In particular, you should read and understand the Appendix and the information provided in the 'Important Notice to Investors' section of this announcement
Touchstone Exploration Inc.
Touchstone Exploration Inc. is a Calgary, Alberta based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company's Common Shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol 'TXP
Contact:
Touchstone Exploration Inc.
Mr. Paul Baay
President and Chief Executive Officer
Tel: +1 (403) 750-4487
Mr. Scott Budau
Chief Financial Officer
Shore Capital
Nominated Advisor and Joint Broker
Daniel Bush
Toby Gibbs
Iain Sexton
Tel: +44 (0) 207 408 4090
Canaccord
Joint Broker
Adam James
Gordon Hamilton Sam Lucas
Darren Furby
Tel: +44 (0) 207 523 8000
Camarco
Financial PR
Billy Clegg
Emily Hall
Lily Pettifar
Tel: +44 (0) 203 781 8330
Forward-looking Statements
Certain information provided in this announcement may constitute forward-looking statements and information (collectively, 'forward-looking statements') within the meaning of applicable securities laws. Such forward-looking statements include, without limitation, forecasts, estimates, expectations and objectives for future operations that are subject to assumptions, risks and uncertainties, many of which are beyond the control of the Company. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words 'expects', 'plans', 'anticipates', 'believes', 'intends', 'estimates', 'projects', 'potential' and similar expressions, or are events or conditions that 'will', 'would', 'may', 'could' or 'should' occur or be achieved. Forward-looking statements in this announcement include, but are not limited to, those in respect of the UK Placing and the Canadian Private Placement, including the size, pricing and timing thereof, the type of securities being offered thereunder, the investors participating therein, the intended use of proceeds therefrom (including with respect to future exploration, development and production activities and the locations thereof), the conditions and approvals required and applications being filed in connection therewith, the expected construction of the Cascadura facility and timing thereof, and the expectation of bringing exploration wells to production and the forecasted production rates derived from previous well production tests. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Certain of these risks are set out in more detail in the Company's December 31, 2021 Annual Information Form dated March 25, 2022 which has been filed on SEDAR and can be accessed at www.sedar.com. The forward-looking statements contained in this announcement are made as of the date hereof, and except as may be required by applicable securities laws, the Company assumes no obligation nor intent to update publicly or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.
TOUCHSTONE EXPLORATION INC. 
