The Energy Report
Source: Streetwise Reports 01/24/2019
A Mackie Research Capital Corp. report discussed conclusions presented in a recent resource update.
In a Jan. 17 research note, analyst Bill Newman reported that “large resource upside [was] confirmed” on Touchstone Exploration Inc.’s (TXP:TSX) Ortoire block in Trinidad through the just released NI 51-101 compliant resource update. The report “highlights the potential to more than double the value of the company,” he added.
Newman relayed the specifics of the identified resource. Prepared by GLJ Petroleum Consultants Ltd., the report determined there exists, in the three exploration prospects on Ortoire, “a net unrisked P50 contingent and prospective recoverable resource of 21.8 million barrels of oil equivalent (21.8 MMboe) with a discounted value (NPV10%) of $255.1 million ($1.98 per share).”
Get our Weekly Commitment of Traders Report: - See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.
Get Our Free Metatrader 4 Indicators - Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter
As for the net unrisked contingent recoverable resource alone, the report outlines a best case P50 of 3 MMboe with an NPV10% value of $34.4 million, or $0.27 per share. GLJ calculated a 100% chance of discovery, given Ortoire is in a producing basin near other producing fields and service equipment is easily accessible. GLJ rated the chance of commercialization at 95%.
Regarding the net unrisked prospective recoverable resource, the report presents a best case P50 of 18.8 MMboe with an NPV10% value of $219.7 million, or $1.70 per share. GLJ gave it a “relatively high” average discovery chance of 35.7% as several large discoveries surround the Ortoire block.
Newman concluded the resource report “confirms substantial reserves and production upside potential of the first three prospects on Touchstone’s large Ortoire block, which directly offsets its current producing development blocks.”
Touchstone is expected to commence exploration on Ortoire, “which provides investors with high-impact upside potential,” Newman indicated. At the same time, the company will keep expanding its production base through continued exploration of its ‘low-risk locations on its development blocks.”
Mackie Research has a Speculative Buy and a CA$0.50 target price on Touchstone. The stock is currently trading at around CA$0.22 per shareat a “large discount to its core net asset value,” which Mackie estimates is about $1.11 per fully diluted share, or $143.7 million, Newman pointed out.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from Mackie Research, Touchstone Exploration Inc., Update, January 17, 2019
RELEVANT DISCLOSURES APPLICABLE TO COMPANIES UNDER COVERAGE
Relevant disclosures required under Rule 3400 applicable to companies under coverage discussed in this research report are available on our web site at www.mackieresearch.com.
Each analyst of Mackie Research Capital Corporation whose name appears in this report hereby certifies that (i) the recommendations and opinions expressed in this research report accurately reflect the analyst’s personal views and (ii) no part of the research analyst’s compensation was or will be directly or indirectly related to the specific conclusions or recommendations expressed in this research report.
Mackie Research Capital Corporation, its directors, officers and other employees may, from time to time, have positions in the securities mentioned herein.
( Companies Mentioned: TXP:TSX; PBEGF;OTC.MKTS,