Touchstone Exploration Inc T.TXP

Don’t take share price drop personally

[Margin321]

Market has decided that company has to show some ramp in production and revenues. The delay does not mean that TXP cannot do that, just means that TXP has not done that yet. 

Meanwhile TXP cannot go BK because they have no debt. Don’t forget how important that is. They have a little cash coming in from legacy wells. As Paul says repeatedly, that pays the bills. They have cash on hand to drill Royston and set up their share of production facilities at Cascadura. They may add some debt for development wells at Cascadura. But they won’t do that until the production (and cash flow) from the first two Cascadura wells is up and running. They won’t start the second phase of exploration until they are generating the cash to drill Steelhead, Kraken, and Guabine.  

Obviously if Royston is a monster discovery that will be excellent. And it will take some time and money to get it on production. But the NGC has to fund the gas pipeline right to the site. TXP will have to fund facilities to 

 trip out liquids and store/transport those. Cost will depend on how wet the gas is. 

Anyway where I have been burned before in investing in small O and P companies has always involved some problem with debt. So it is quite beautiful that TXP has none.