Oil explorer Touchstone Exploration (TXP:AIM) gained 16.9% to 137.3p as the first of three planned production tests at an exploration well in Trinidad & Tobago confirmed a light oil discovery.
Significantly, the find represented a new pool that had not been encountered in any of the regional offsetting wells.
Touchstone shares started 2020 around the 20p mark but a string of drilling successes on its Ortoire block on the Caribbean island helped drive a substantial increase in its market valuation.
While the shares lost some momentum in recent months, this new discovery has helped set the stock back on an upward path.
‘MATERIAL UPSIDE SURPRISE’
Shore Capital analyst Craig Howie commented: ‘The discovery reported today has been made in a separate and previously unidentified new pool and therefore, in our opinion, provides a material upside surprise beyond the previously-announced discovery of liquids-rich natural gas in Royston.’
Howie added: ‘Ahead of the full set of Royston test results, we continue to believe that an FY22 exit production rate of 15,000 boepd (barrels of oil equivalent per day) is readily achievable and happily maintain our 7,000 boepd average daily production forecast for next year.
‘We continue to believe that 25,000 boepd appears perfectly achievable by the end of FY23. We also remain confident that Touchstone’s liquidity is ample and sufficient to see the company all the way through to commercial production from Cascadura - which we fully expect to provide substantial liquids-rich gas production and operating cash flow.’
