Page 15 - LatAmOil Week 02 2023

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INVESTMENT
Touchstone Exploration

executes asset exchange

agreement covering certain
onshore Trinidad assets

Touchstone Exploration has announced that its
indirect wholly owned Trinidadian subsidiary,
Primera Oil and Gas, has entered into an Asset
Exchange Agreement for the exchange of certain
onshore Trinidad assets with Lease Operators
Limited, a privately held Trinidadian entity.
Pursuant to the Agreement, the Company
has agreed to transfer its Fyzabad, San Fran-
cique and Barrackpore blocks, which currently
produce aggregate crude oil volumes of approx-
imately 130 barrels per day (bpd), in exchange
for the Rio Claro, Balata East and Balata East
Deep Horizons (Balata Deep) blocks, which
offset Touchstone’s Ortoire block and currently
produce aggregate crude oil volumes of approx-
imately 35 bpd. Production (Public Petroleum Rights) Licence turbidite fairway directly offsetting our Ortoire
Transaction Highlights: The Transaction (the Rio Claro Licence), and is expected to close block in close proximity to our Cascadura dis-
contemplates swapping producing legacy crude prior to the end of 2023. covery. With the technical data that we have
oilfields which we consider non-core due to The 100% working interest Balata East block reviewed on the three licences, we have identi-
limited scalability in exchange for highly pro- is governed by an Enhanced Production Service fied numerous drilling opportunities that can be
spective exploration and development acreage Contract with Heritage Petroleum Co. (HPC) incorporated into our infrastructure currently
contiguous to our Ortoire block. in the shallow horizon that is effective through being constructed. A revised map reflecting
Acquisition of approximately 28,000 work- June 30, 2030. The Balata Deep asset is a 100% the proposed Transaction can be found in our
ing interest acres directly offsetting our Ortoire working interest in the area identified in the Bal- updated corporate presentation available on our
block, allowing us to significantly expand devel- ata East block from a depth of 5,000 feet down- website.”
opment prospects adjacent to our Cascadura wards with no limit. The Balata Deep block is Touchstone Exploration, 09 January 2023
and Royston discoveries. governed by an Exploration and Production
The Balata East block has a liquids facility (Public Petroleum Rights) Licence with the Trin- Fitch rates Ecopetrol’s
which may potentially be used as a delivery point idad and Tobago Ministry of Energy and Energy
for future liquids volumes produced at Casca- Industries (MEEI), where the initial exploration senior notes BB+
dura and Royston. period expires August 13, 2025. The Rio Claro
The Transaction also provides Touchstone Licence with the MEEI is currently expired, and Fitch Ratings has assigned a BB+ rating to Eco-
access to an 18-km oil pipeline that transects our an extension through August 2025 is a condition petrol’s new issuance of up to $2.0bn senior
Ortoire block. precedent for closing. The Rio Claro Licence is unsecured notes due 2033.
Future potential production from the Rio for an 80% operated working interest, with The proceeds of the notes will be used to
Claro block is not subject to our current Ortoire Heritage holding the remaining 20% working prepay $472mn of the outstanding principal
block natural gas sales agreement with The interest. amount of the loan entered in 2021 to finance the
National Gas Company of Trinidad and Tobago As at and during the year ended December acquisition of Interconexion Electrica SA (ISA:
Limited, with any potential discoveries subject to 31, 2021, Touchstone’s Fyzabad, San Francique BBB/Stable) and for general corporate purposes,
separate product marketing arrangements. and Barrackpore blocks generated estimated including financing the company’s investment
Transaction Details: Under the Agreement, aggregate operating netbacks of $1.453mn, with plan for 2023.
Touchstone has agreed to swap its operated aggregate net liabilities of $89,000. Ecopetrol’s ratings reflect the close linkage
100% working interests in the Fyzabad, San As at and during the year ended December with the Republic of Colombia (BB+/Stable),
Francique and Barrackpore producing blocks 31, 2021, the Rio Claro, Balata East and Bal- which owns 88.5% of the company. Ecopet-
for the counterparty’s working interest in the ata Deep blocks recorded estimated aggregate rol’s ratings also reflect the company’s strategic
Rio Claro, Balata East and Balata Deep blocks for operating netbacks of negative $97,000 (unau- importance for the country, as well as its ability
no cash consideration with the swap becoming dited) and had estimated net assets of $683,000 to maintain a solid financial profile.
effective upon closing. The Agreement remains (unaudited). Key Rating Drivers: Linkage to Sovereign:
subject to certain closing conditions, including Paul Baay, President and CEO, commented: Ecopetrol’s ratings reflect the strong linkage with
receipt of applicable regulatory approvals and “The proposed exchange of assets further high- the credit profile of the Republic of Colombia,
an extension of the Rio Claro Exploration and grades our portfolio as we focus on the Herrera which owns 88.5% of the company’s total capital.

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