Touchstone to Acquire Trinidad-focused Trinity

Calgary-based Touchstone Exploration Inc. is acquiring all of the shares of Trinidad and Tobago-focused Trinity Exploration and Production Plc.

Trinity is a crude oil exploration, development and production company with onshore and offshore assets located solely in the Republic of Trinidad and Tobago.

Under the terms of the acquisition, Trinity shareholders will receive 1.5 common shares of Touchstone for each Trinity common share held. Based upon the closing Touchstone share price as of April 30, 2024, the acquisition represents an implied value for Trinity of approximately $30.1 million, Touchstone said in a news release.

Approximately 24.91 percent of the currently outstanding Touchstone Shares will be issued pursuant to the acquisition, according to the release. The completion is subject to customary regulatory, stock exchange and Trinity shareholder approvals and is expected to close by the end of the third quarter.

After the acquisition is completed, existing Touchstone shareholders will own approximately 80 percent of the post-acquisition Touchstone shares, and Trinity shareholders will own approximately 20 percent of the post-acquisition Touchstone shares.

The Trinity assets are a “natural extension of Touchstone's assets in Trinidad,” Touchstone said. The addition of Trinity's existing production portfolio, along with its exploration and development assets, will position Touchstone as a key player in the Trinidad oil and gas sector, and “one of the leading independent operating companies dedicated to investing in both onshore and offshore activity to grow Trinidadian oil and natural gas production,” it added.

On a pro-forma basis, the acquisition is expected to create a producing portfolio between approximately 11,700 and 12,400 barrels of oil equivalent per day with combined estimated proved plus probable reserves of approximately 80.3 million barrels of oil equivalent as of December 31, 2023.

Touchstone President and CEO Paul Baay said, “We believe this acquisition represents a compelling strategic opportunity which will deliver enhanced scale, balance sheet strength, and growth opportunities. The business combination will create an upstream oil and natural gas company of increased scale in Trinidad, enhancing our ability to deliver growth in reserves, production and cash flows for the benefit of our combined shareholders and local stakeholders”.

“The combined group will be able to invest in multiple development programs and accelerate the growth potential of the enlarged asset base, thereby giving us the potential to materially enhance long-term value,” Baay added.

Trinity is an independent oil exploration, development and production company with producing assets onshore, as well as offshore off the east and west coasts of Trinidad. The company produced net daily average crude oil sales volumes of 2,790 barrels per day (bpd) in 2023 and 2,669 bpd in the first quarter.

As of December 31, 2023, Trinity's management estimate of its total proved plus probable reserves was 12.91 million barrels. Trinity operates seven onshore oil blocks from which it produced 1,495 bpd in 2023, accounting for 53 percent of its net annual average crude oil production, according to the release.

Trinity's west coast assets, the Point Ligoure-Guapo BayBrighton Marine and Brighton Marine licenses, are located offshore and produced net crude oil volumes of 352 bpd in 2023, representing 13 percent of Trinity's annual net production.

Touchstone noted that Trinity has been operating and producing offshore from the east coast of Trinidad since 2013, and currently produces crude oil from three platforms in the Trintes field which resides within the Galeota block. The net average 2023 crude oil production from the Trintes field was 943 bpd, representing 34 percent of Trinity's net annual production.

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