• Ortoire Block could have at least 1 tcf of gas
• First production to begin in two to three months
• Cost competitive when compared to present producers
Touchstone’s Ortoire Block could have as much as one trillion cubic feet (tcf) of wet natural gas and may potentially produce in excess of 200 million standard cubic feet of gas per day (mmscf/d) according to Paul Baay, director, president and chief executive officer of Touchstone Exploration Inc.
In addition to which first gas is expected as early as February 2021 ramping up to 100mmscf/d by the fourth quarter next year.
“First gas we are hoping will be delivered late February, beginning of March 2021 for Coho and then the Cascadura and Chinook volumes we anticipate bringing on in the fourth quarter of 2021.
When we look at all three, Cascadura, Cascadura Deep and Chinook we are looking at about 10 million standard cubic feet per day (mmscf/d) from Coho and roughly 80 to 100 mmscf/d from Cascadura/Cascadura Deep and Chinook combined,” Baay told the Business Guardian in an interview on Monday.
He said in all 100 mmscf/d and 2,000 barrels of condensate per day were expected to be produced from the field by the end of next year.
“When we are talking about a ball-park figure right now, we are probably talking about things that are about 5 to 600 billion cubic feet (bcf) with what we see right now, but I think ultimately it is fair to say that on the block we see the potential for there to be at least a tcf (trillion cubic feet) of gas onshore in Trinidad.” Baay revealed.
But Touchstone is not resting on its laurels and plans to continue its drilling campaign with a new prospect, which if it is as successful as the company expects, could essentially double the volumes.
Baay explained: “It is a littler bit further to the East, I think about 11km to the East of Cascadura, and its a well that we call Royston. It’s the kind of prospect that we can see can add an additional 100 mmscf/d if it is successful.”
Touchstone’s President said the discoveries on the Ortoire Block had opened new prospects and technical leads.
“I think there is a lot of potential off our block. We’ve identified besides the prospects we have been talking about, we have identified 21 additional prospects on our block and there are a number of technical leads all the way through from our block, as you move all the way west down to the South West Peninsula. Geologically it’s all the same down there, just some different technical faults, but I think we don’t own it all. Clearly geologically there will be some other major discoveries along this trend onshore in Trinidad.” Bay explained.
He said in the Ortoire Block, Touchstone believes it is into a liquids-rich gas window and therefore is expecting gas and condensate rather than black oil.
Touchstone’s CEO told the Business Guardian that the company will be able to bring on the gas discoveries very quickly because of its close proximity to existing infrastructure and because its costs are far more competitive than the price that the National Gas Company is presently paying for its molecules from the larger producers.
He told BG: “It’s a combination of things. One there is already the existing pipeline that runs up to Phoenix park. It goes right through the middle of our block so the capital cost and the timing to bring that on are going to be significantly less than some of the offshore programmes and it’s just easier and cheaper to bring them on so you know, and I think that’s why we had the success in negotiating with NGC, is that they really see this as being the first gas that they can bring to market and that works for both of us.”
Baay added: “We’re trying to work with the pricing. The real trade off with us and the NGC is that we can find a price that makes sure the plants stay open and hopefully we can open up some of the trains that are shut in, while at the same time getting the right return for our shareholders and I think we have found that balance.”
This is good news for the NGC that has been reeling from a shortage of natural gas and higher prices for gas which it has found difficult to sell to the downstream petrochemical companies that have found the prices too high.
Bay said the success of the drilling campaign means that there is far more knowledge about the prospects onshore and Touchstone is having discussions on how to go after these potential oil and gas opportunities.
“Without saying to much, it is fair to say we are talking to not only Heritage but other operators on the island as well and taking what we learnt in Ortoire, we think there are some opportunities, so we’re having some very open and positive discussions for sure and Heritage is just one of those parties.” Baay told BG.
He said Touchstone’s ability to raise money on the London capital markets meant it has capital now to do both the exploration on the block as well as develop and bring it on stream.
“We think there are probably 4 to 8 development locations at Cascadura and 4 to 8 development opportunities at Chinook so it is really going to become quite frankly a five year or ten year drilling plan onshore now that will be, thanks to the capital we raised in London, going to be self financing pretty quickly. Its going to be very busy quite frankly for the next ten years, I think this is really exciting obviously for us but also for the country.” Baay said.
On the question of oil production which Touchstone is also involved in, Baay said the company was happy with the provisions in the 2021 budget which removed Supplemental Petroleum Taxes (SPT) from being applied to companies that produce 2000 barrels of oil and fewer a day up to the point where crude price reach US $75 a barrel and above.
Baay said its a good first step but more has to be done.
He said: “I think it’s a positive step but I would hope that the government would extend it further like higher volumes and for a longer period of time so that it kind of gives a longer view as to what to do but to be clear I am pretty happy with that being the first step that we’ve made. I think it’s a step in the right direction for sure. Hopefully what it will do is get more activity, hopefully in the south of the island, like around Fyzabad where we are and forest reserve. That particular change in the SPT is very helpful for us down there and you will see us be very active in that area as well during 2021.”