Facebook PostNot my post but I thought I'd share. Facebook post by James Whyman: Very rarely will small cap oil and gas companies provide enough information to make informed investment decisions. You may constantly have to juggle the costs vs potential revenue
However, this is not the case for Touchstone Exploration. They have signed a contract with NGC to provide all of the gas from Ortoire block with a set price from the wellhead and almost zero CAPEX costs. We know TXP will receive around $2.50 per MCF of gas with 5c for CAPEX and 12.5% for royalties. We know from email exchanges with TXP that they expect the total tax on revenue to be around 35%.
With this in mind I have created a discount cash flow model which is used by institutional investors when valuing companies.
This is based on CEO Paul Baay's recent interview in which he confirmed TXP are aiming for 100MMCF gas production and 2000bopd liquids by the end of this year from Cascadura-1 and Coho and for 200MMCF gas production and 4000bopd liquid by end of 2022 if further success (which I assume to be Chinook and Cascadura Deep). I have reduced gas flow by 5% per year after year five however there is every chance they will add more wells to keep a stable production flow.
This gives a share price of £2.35 for 100MMCF of gas production and £4.50 for 200MMCF production - an almost 300% upside for Cascadura, Coho and Chinook along with with existing oil fields. This obviously doesn't include any upside from Royston or Kraken or any of the other 20+ exploration targets.
Please note this is not investment advice and would encourage all to DYOR however please feel free to comment/share - especially with those Canadians who have been particular weak hands recently
SpreadsheetDCF Touchstone Exploration 100MMCF and 200MMCF.xlsx [url=https://l.facebook.com/l.php?u=https%3A%2F%2Flookaside.fbsbx.com%2Ffile%2FDCF%2520Touchstone%2520Exploration%2520100MMCF%2520and%2520200MMCF.xlsx%3Ftoken%3DAWwsNP2Y6DAI8OGXrEuQpClzh9bUa0TDWn_4f39xfh3egDD49H-Xz_A2gVb0gR2NqcY31lBeeuYIwgRzTr_c72NchjJCTmdnXDdBMGKHSe3MPpokQaOWAmjBE59Rq5i5JifvnKzA4LaPQwcXBv7yldXMwvplrzVK7IlsmDIv-AZL_3eTfV2aBS8LbpK7tpfi3db0t1tC3Til80A74yOlVh7HeT9zvNIYxhbHbm6-jcEpZf-g9Y8xxOBtpY0F2G0DHI9urgsiRTfe4VsOpOv0EsnbdPfpuc7In9ygMaGdZMdOmyqzoKHZfH4GJkDY-0JMZzCJnyyj1pmliW9AQes0DzetePIONu-lhJlBD0DLKGmroHEG4Fqoo6_2W7KcC4ad3-Sj-Hy2EmmLlUGLlCZVmn-rPyCs_xfgKxdA2Huu3rj2mOusubQRHffS6ifu9Bw05YWa94CxwjjsmMsCcDivR_2n8NgyNB8s67vXBDOEHvYZEBIRJS6LBqdtA__1jtS6O18F-8_Ky1xp7euI2kStnw3GS2cqV2tj1Pu7NjuKIg2Lt9Z6ZsW8nL6JfIoacmzEwjt7SnaIMIbZT_qpJZgp-Pkw&h=AT2CdHJ5LjXaF0_zpX_FQ9hBRK8UJenxTs4zarWo5f3sOXPVlz-I3rcsXAs35B9qU69gEIWmCLK_IThuCiyQh5byq4vmvlbvBNJdCIGCctaqgSgBqU4MT9mdSdMQ_YPTT4rdQnuQum06Yldv&__tn__=H-R&c[0]=AT2rGx4xwdSBS8Jc3EUPgKXgDC9JE3_tPSjxO7A_f8sDpQ5zDMPI1VU07ANVxFqkvKrot9zIiGtFns7zH3wRiwnBOrr38ULymn4TagUvHpLlT2DRb2W6Lx0zIql1W5TA8Z8UHwDHPrBdS0jYCksMVJZDOhHbSjHA7XmUL7pQOSU12pmkS92Q91qSuFDQFSr9R75-o-rcWHCXbs9IaFNxHoiwZFJE3Dg]Touchstone DCF[/url]