#364096
Postby Proselenes » December 8th, 2020, 3:06 pm
Comment from Shore Capital.
'Risked NAV estimate upgraded to 200p
On 3rd December, Touchstone released yet another exceptional drilling update, this time in relation to its Cascadura Deep-1 exploration well, where significant hydrocarbon accumulations have been encountered. This result came sooner than we anticipated, with Touchstone having decided to suspend drilling at ~8,300ft, due to high gas pressures. Cascadura Deep-1 is Touchstone’s fourth Ortoire well and continues the company’s 100% drilling success rate.
Whilst there are a number of subsurface considerations here, including correlations with earlier discoveries, in simple terms Cascadura Deep-1 is the best well drilled by Touchstone to date, having encountered multiple stacked thrust sheets across a substantial sand thickness. Therefore, even ahead of production testing scheduled for early FY2021, we now expect a reserves impact far greater than we had previously anticipated, with this latest discovery also underpinning plans for a multi-well development (and expanded exploration) drilling programme.
We said in our commentary when the news came out that, ahead of fully revisiting our sum-of-the-parts valuation, a Risked NAV estimate of ~175p/share was looking more than appropriate, and we now take this early assessment up to exactly 200p/share – reflecting the significant value that Touchstone has added to its flagship Ortoire asset since drilling commenced last year.'