Oil and gas outfit Touchstone Exploration (TXP:AIM) fell 8.8% to 92.5p despite positive results from a third test on its Royston-1 well in Trinidad.
The fall perhaps reflects recent volatility in the oil price and investors expecting more after the company reported very encouraging initial results from the well back in November. They now have to wait until some point in the first quarter of 2022 for more news on how a production test has gone.
The well flowed at rates up to 1,368 barrels per day (bbls/d) of total fluids with indicated oil cuts between 40% and 60% of 31-degree API sweet crude. A non-measurable amount of solution gas was also observed during the test.
In aggregate, the well produced 1,786 barrels of total fluid at an average flow rate of 705 barrels per day with oil cuts varying between 40% and 60% throughout the test.
EXTENDED PRODUCTION TEST PLANNED
‘We plan to place the well on an extended production test following a seven-day build-up period to re-evaluate bottomhole conditions,’ Touchstone said.
‘The extended production test will be designed to assess optimal flowing conditions to maximize production and data collection.’
Analysts were encouraged. Canaccord Genuity’s Charlie Sharp commented: ‘We think this is a very encouraging test result, markedly better than the second test (up to 430 bbls/d fluid, 10% oil), and more comparable to the very successful first test (up to 550 bbls/d fluid, 94% oil).
‘All three tests in the well have produced light oil over thick reservoir intervals highlighting the resource potential in Royston.’
His counterpart Craig Howie, from Touchstone’s house broker Shore Capital, said: ‘The result announced today confirms the commercial materiality and presence of a compelling oil development opportunity at Royston, where all three of the tests recently undertaken have encountered economic oil and have confirmed the presence of hydrocarbons over the entire interval.’
