The Lemon Fool

A good interview with Paul. Youtube link below :

https://www.youtube.com/watch?v=eZ_pwDvAp70


Looking good if Cascadura can be online by April 2022, thats massive cashflow coming in and opens the door to take on new debt in Q2 2022 to fund development of Cascadura and Royston (in the success case for Royston). Which allows cash from operations to fund phase 2 exploration in H2 2022 (thats Guabine, Steelhead, Bass and Krakken).

Some talk around of a further 2 wells (on top of the planned 4) in the South West oilfields, which would be possible if Coho is on line by December this year.

No equity dilution, thats a big bonus that they are fully funded and planned until Cascadura is online.

The boot now swings on to the other foot. Someone has borrowed 9 million shares from CREST, is paying to borrow them and sold them. They, at some point, have to buy them back and hand those shares back to CREST.

The share price should be around circa 150p at the moment based on the proven reserves and resources only......excluding the potential up to 2000p upside from the over 20 Ortoire prospects that will be drilled in the coming 5 years. Its down where it is thanks to whoever borrowed those 9 millions shares from CREST and sold them, but they do have to buy them back and return to CREST......that will be fun.

Proselenes wrote:
No equity dilution, thats a big bonus that they are fully funded and planned until Cascadura is online.

The boot now swings on to the other foot. Someone has borrowed 9 million shares from CREST, is paying to borrow them and sold them. They, at some point, have to buy them back and hand those shares back to CREST.

The share price should be around circa 150p at the moment based on the proven reserves and resources only......excluding the potential up to 2000p upside from the over 20 Ortoire prospects that will be drilled in the coming 5 years. Its down where it is thanks to whoever borrowed those 9 millions shares from CREST and sold them, but they do have to buy them back and return to CREST......that will be fun.

I agree, the SP should be 150p on pre pandemic metrics for oil and gas reserves and production, but I am not sure how much the current SP is affected by the shorting and how much by more general aversion to fossil fuels. Most oil producing companies are spinning off cash like nobody's business at the moment, but share prices across the industry remain suppressed. Oil and gas shares are deeply unpopular (imo) due to covid demand suppression, climate change panic, and over optimism about the development of renewables etc.

This should represent an opportunity for contrarian investors but, so far, this has not come to pass. Hang in there.

S

Shorts update for TXP

August 2021 figures added. A small increase in the actual short level (percentage down as more stock on CREST). Price being suppressed is ongoing.

TXP Stock on Loan (Shorts) from Euroclear (% borrowed from CREST holdings)

Jan 2021____0.52%
Feb 2021____1.23%
Mar 2021____7.14%
Apr 2021____8.65%
May 2021____8.79%
Jun 2021____8.74%
Jul 2021____8.49%
Aug 2021____8.45% (Loaned 8.819 million up from 8.792 million in July)

If anyone has not read the TXP MDA for Q2/H1 (13th August release), the PDF file is on the link below. Some extra snippets of info are in there.

https://gofile.io/d/mgZRd9

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Confirmation of the boost to the target price given to TXP recently by Canaccord.

Upgraded price target now 160p. And if Royston strikes and flows, that will be upgraded again considerably.

https://www.marketbeat.com/stocks/LON/TXP/price-target/


In simple terms, add 50p to the share price for each 250BCF of gas potential (if any) from Royston. If it looks like it could deliver an upper estimate of 1TCF - thats 200p on the share price. And if it delivers a duster, expect a kick in the teeth until Cascaudra comes on line Q2 2022 and the share price moves to 150p then as the wall of cash coming in from Cascadura production starts.

For me, fair value at present is 150p (based on the proven and verified reserves) and so any incremental value from any discovery at Royston adds on top of that current proven 150p of reserves.

The 160p target of Canaccord is quite fair imo based on the current situation, current proven and verified reserves with 10p on top of the 150p basic.

Video link below to the presentation CEO Paul Baay just did at the AAPG E&P Summit

https://www.youtube.com/watch?v=Jvd8aCB ... xploration


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Massive Royston discovery !

Double expectations !!

https://www.londonstockexchange.com/new ... s/15147498

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Drilling at least one well to 10,000 feet was the final obligation under the license terms. And its completed with well number 5.

This is great news as TXP are probably the only company recently to now fulfill all obligations of the license.

However, this might also be bad news. With so many discoveries and a clean license - sadly, TXP now could be subject to a low ball takeover bid.

When I say lowball, I mean 200p to 275p per share offer.

And that would be lowball, considering that Cascadura is a monster and will deliver massive cash flow from when its online later in H1 2022. Royston is a monster and with so many targets now derisked (including the monster that is Krakken) - its now a sitting duck for some nasty people to take it out cheap before us shareholders get rewarded with the "Wall of Cash" coming in from when Cascadura is online and then relentless drilling on more and more massive exploration targets.

It really is no joke that if Royston flows and then phase 2 exploration including Krakken get some success, this could be 1000p a share plus plus plus in 24 months. While a lot could go wrong, it could also go right and then some.

And that is why, while the big boys might not be interested, some savvy people with cash to burn might try to steal TXP away from us shareholders with a lowball bid between now and when Cascadura comes online.

And a 200p to 275p bid in the coming months post a successful Royston flow test, would be taking the pee, and certainly I would reject it completely.

Malcys update:


https://www.malcysblog.com/2021/09/oil- ... d-finally/


........Touchstone Exploration

Touchstone reports that the Company has completed drilling the Royston-1 exploration well and has announced that the well encountered ‘substantial hydrocarbon accumulations based on drilling and wireline log data’.

Royston-1 was drilled to a total depth of 10,700 feet and is the deepest exploration well drilled by Touchstone to date, mud logging and wireline logs indicate hydrocarbon accumulations in the Lower Cruse, Karamat and Herrera sections.

The well encountered a total Herrera turbidite thickness of 1,014 feet (609 feet net sand) in two stacked thrust sheets. An aggregate 393 gross feet of hydrocarbon pay was identified in two unique thrust sheets in the Herrera sands from 9,700 feet to total depth, with wireline logs indicating that the well was in hydrocarbon pay at total depth.

The well is currently being cased and prepared for production testing of the Herrera Formation.

Paul Baay, President and Chief Executive Officer, commented:

“The Royston-1 well was the fifth and final well of the first phase of our exploration drilling program on the Ortoire block, with logging data indicating better than expected results. The amount of identified hydrocarbon pay further verifies the opportunity in the block for our future phase two exploration program. Prior to drilling, we targeted 200 feet of gross sand pay, with results almost doubling our expectations. The team has commenced planning production testing operations in the Herrera Formation using the same equipment that verified the Cascadura discovery. I would also like to commend the team for drilling the well safely and in adherence to all health protocols. With the assistance of the new seismic and upcoming production testing data, we anticipate this to be the largest geological structure identified on the block in the Herrera Formation.”

This looks like a very decent well despite the lower porosity, which incidentally is like other wells in the programme and not markedly different to when Shell was producing. The pay was nearly double the expectations and the whole Ortoire area looks fit for further drilling and has so far more than matched expectations. I don’t normally quote more than one company executive but I think that COO James Shipka provides really important data here as the company look to identify the second exploration phase.

Readers know that I am a big fan of Touchstone whose value is way above the current price even after today’s run up.........

Interview with the CEO after Rpyston results ;

https://www.youtube.com/watch?v=q0s60WW ... =Proactive

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Good news that the 2021 onshore license nominations and process is now open. The sooner this is done and TXP are awarded whatever they want to win, the sooner that a Deep Well at a Herrera prospect in the South West oil fields can be planned for and carried out.

Currently until the onshore license bid round is done and dusted and completed and awarded, no deep wells will be planned in the South West to avoid giving a competitive advantage to other companies to bid against TXP.

https://www.bnamericas.com/en/news/trin ... hore-round

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The map of the areas is here :

https://www.energy.gov.tt/wp-content/up ... on-Map.pdf

I am sure TXP will be interested in Guayaguayare (next door to Ortoire) and also perhaps the South West Peninsula areas.

Shorts update for TXP

September 2021 figures added.

A tiny decrease in the actual short level (percentage down as more stock on CREST). Price being suppressed is ongoing.

TXP Stock on Loan (Shorts) from Euroclear (% borrowed from CREST holdings)

Jan 2021____0.52%
Feb 2021____1.23%
Mar 2021____7.14%
Apr 2021____8.65%
May 2021____8.79%
Jun 2021____8.74%
Jul 2021____8.49%
Aug 2021____8.45%
Sep 2021......8.39% (Loaned 8.808 million down from 8.819 million in August)

WD4 well has spud.

hTTps://twitter.com/touchstoneexp/statu ... 29185?s=21

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Cormark upgrade TXP price target to 4 Canadian dollars.


Touchstone Exploration (TSE:TXP) Given New C$4.00 Price Target at Cormark - Watch List News


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Stifel with 2.75 CAD target on 1st October and Cormark with 4.0 CAD target on 4th. Latest two broker price target increases in the below link.

https://www.marketbeat.com/stocks/TSE/TXP/price-target/

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Trinidad and Tobago budget highlights released in news by TRIN, worth read for #TXP holders.

https://www.investegate.co.uk/trinity-e ... 00105748O/

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Very nice news, progress marches forwards. Cascadura online mid Q2 2022........

Done some detective work and found the following - which if Royston is analogous to the Carapal Ridge gas discovery - we should expect to similar porosity, condensates etc... from the Royston Herrera test results.

What makes me excited now is that at Carapal Ridge the 7bc was oil bearing..............which means, we might see the lower Herrera 7bc at Royston being oil bearing, with the upper Herrera 7a being gas/condensate. Mmmmmmm I am even more excited now - might we have oil down below in the 7bc and gas condensate upper 7a. Lets not forget the drill stopped in the 7bc in pay.........which means we might have the 1TCF of gas in the upper 7a and then a few hundred millions of barrels of oil in the lower 7bc........with the potential billion barrel Krakken still to be drilled below that. Also note BG never found a water/gas contact or oil/water contact. This all bodes extremely well and exciting.

So we are looking for around 17% (0.17) (plus or minus a couple of points) porosity from Royston-1.


The Carapal Ridge field was discovered by the Carapal Ridge-1 well, the first well to penetrate the Carapal Ridge thrust sheet. The Carapal Ridge-1 exploration well is currently the only well within the field and has been completed as a producer. The well is producing 20mmscfd from a 678ft interval (6568ft - 7246ft) within the Herrera Member sandstones of Mid Miocene age.

The Carapal Ridge-1 well encountered a 937ft continuous column of gas condensate pay within a single thrust sheet of good quality Herrera Member sandstones. Herrera sandstones have an average porosity of 17% and a net-to-gross of 58% within the pay interval. The sands consist predominantly of stacked upwards fining and blocky proximal turbidite channels and lobes. FMI and dipmeter data confirm low angle amalgamated sand bodies.
The Carapal Ridge fluid is a rich retrograde / gas condensate with an initial CGR variable from 50 to 22 bbl/mmscf. Top Herrera sandstone is at a depth of 6568ft. A gas water contact was not encountered in the well. The proven gas column is down to 7505ft and is based on log and test data and coincides with a complex basal imbricate thrust system. Below the basal imbricate thrust system the well penetrated a lower Herrera thrust sheet, referred to as the underthrust play. DST 1 encountered oil in the underthrust play. The well drilled to a total depth of 8829ft within the Herrera Member sandstones.

For those who want to watch for Flaring, you may use this link below :

https://www.arcgis.com/apps/mapviewer/i ... 6d30276aa3

It is set to look for fires and thermal activity, and updates every 15 minutes. A flare from a gas flow test will also show up on here as an accidental forest fire trigger/thermal event.

Zoom into Trinidad and then to Ortoire and then keep a watch in the weeks ahead. Someone might spot a big red spot over Royston at some point.

If my zooming and location finding is correct, this is the Royston-1 pad as of 5th October when clouds were not covering it.

https://apps.sentinel-hub.com/eo-browser/?zoom=15&lat=10.24907&lng=-61.11675&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2021-10-05T00%3A00%3A00.000Z&toTime=2021-10-05T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR'%20target='window'>https://apps.sentinel-hub.com/eo-browser/?zoom=15&lat=10.24907&lng=-61.11675&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2021-10-05T00%3A00%3A00.000Z&toTime=2021-10-05T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR


This on the 25th September shows the access road better as less clouds

https://apps.sentinel-hub.com/eo-browser/?zoom=15&lat=10.24907&lng=-61.11675&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2021-09-25T00%3A00%3A00.000Z&toTime=2021-09-25T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR'%20target='window'>https://apps.sentinel-hub.com/eo-browser/?zoom=15&lat=10.24907&lng=-61.11675&themeId=DEFAULT-THEME&visualizationUrl=https%3A%2F%2Fservices.sentinel-hub.com%2Fogc%2Fwms%2Fbd86bcc0-f318-402b-a145-015f85b9427e&datasetId=S2L2A&fromTime=2021-09-25T00%3A00%3A00.000Z&toTime=2021-09-25T23%3A59%3A59.999Z&layerId=1_TRUE_COLOR