(Energy Analytics Institute, 5.Nov.2024) — Touchstone Exploration Inc.‘s wholly owned Trinidadian subsidiary Primera Oil and Gas Limited (POGL) executed on 4 Nov. 2024 an Exploration and Production (Public Petroleum Rights) license for the Rio Claro block.
The Rio Claro License has been formally entered into by POGL, the Government of Trinidad and Tobago, the Trinidad and Tobago Ministry of Energy and Energy Industries (MEEI), and a subsidiary of the National Gas Company of Trinidad and Tobago (NGC), Touchstone announced 5 Nov. 2024 in an official statement.
“The issuance of the Rio Claro License aligns with the commencement of production from the Cascadura C well pad. 3D seismic data indicates that a substantial portion of the Cascadura structure extends into the Rio Claro License area. This creates a significant opportunity, as any potential natural gas discoveries on this block can seamlessly integrate into our newly commissioned gathering system at the Cascadura C location, situated near the western boundary of the Rio Claro acreage. Notably, these resources will be marketed under a distinct natural gas arrangement, separate from our existing Ortoire agreement,” Touchstone president and CEO Paul R Baay said in the statement.
“Subject to regulatory approvals, we anticipate drilling the first commitment well on this block originating from the Cascadura pad C surface location and targeting a bottom-hole location within the new Rio Claro License,” Baay said.
POGL holds an 80% operating working interest in the Rio Claro Licence, while NGC holds the remaining 20%. Similar to the Touchstone’s Charuma, Cipero and Ortoire licenses, the Rio Claro License initially has a six-year exploration term, which can be extend for 19-years for areas where commercial discoveries are approved by the MEEI.
The Rio Claro License is strategically located adjacent to Touchstone’s Ortoire block, and the Rio Claro License acreage surrounds the recently acquired Balata East field. As such, this marks a vital extension of Touchstone’s exploration and development focus within the Herrera Formation fairway, the company said.
Extension of the Rio Claro Block
Proprietary seismic data highlights several promising Herrera Formation anomalies, which extend from the Ortoire block into the Rio Claro License acreage, situated in structurally favorable up-dip positions. Notably, Touchstone’s Cascadura-3ST1 discovery within the Ortoire block appears to extend into the Rio Claro block. Furthermore, seismic interpretation reveals that both the Royston anomaly in the Herrera Formation and the Kraken anomaly in the Cretaceous Formation extend into the Rio Claro License acreage.
With existing sales infrastructure at Ortoire and Balata East, any future discoveries of liquid hydrocarbons or natural gas within the Rio Claro block can be seamlessly integrated into production, Touchstone said in the statement.
“Beyond its strategic alignment with the Cascadura field, the Rio Claro property adds considerable value by granting us full control over the Kraken Cretaceous prospect. Additionally, it enhances our position on the highly prospective Herrera fairway, with updip closures on several promising prospects,” Baay said.
In Jan. 2023, POGL entered into an asset exchange agreement with a privately held Trinidadian entity, involving the exchange of specific onshore assets in Trinidad with no cash consideration. Under the terms of the initial agreement, POGL agreed to transfer its 100% working interests in the Fyzabad, San Francique, and Barrackpore producing blocks in exchange for the counterparty’s working interests in the Rio Claro License, Balata East, and Balata East Deep Horizons blocks.
The asset swap was contingent upon the counterparty obtaining an extension of the Rio Claro License. However, due to regulatory delays in securing the extension, the parties amended the agreement in Oct. 2023. This supplemental agreement divided the asset swap into two potential exchanges. The first exchange, involving POGL’s 100% working interest in the privately leased San Francique field for the counterparty’s 100 percent working interest in the Balata East block, was completed effective 1 Jun. 2024. As POGL directly negotiated the Rio Claro License with the MEEI, the completion of this negotiation marked the conclusion of the transaction, and the second asset exchange, which lapsed on 31 Aug. 2024, will no longer be pursued by Touchstone.
Notes:
(1) POGL is responsible for 100% of the exploration minimum work commitments and financial obligations over the initial six-year exploration term of the Rio Claro License.
(2) Financial obligations represent estimated amounts payable pursuant to the Rio Claro License, which include bonuses, lease payments and surface rental costs over the initial six year licence term.
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By Piero Stewart. © Energy Analytics Institute (EAI). All Rights Reserved.
