Shore Cap comment on todays TXP news
Shore Cap comment today. Risked NAV estimate stays at 204 pence. Both SCAP and CANA have target prices/risked NAV at just over 200p levels, which is why I would expect any takeover offer to be around those levels if it were to happen.
"......Trinidad- focused operator Touchstone has this morning announced that the Trinidad and Tobago government has approved a five-year extension for the Orto1re block exploration and production licence.
As part of the extension. Touchstone is required to drill three exploration wells to minimum depths of 6,000 true vertical feet prior to the end of the amended licence term. The three exploration wells are in addition to the five wells drilled to date on the property. Similar to the previous minimum work programme, the company will be responsible for 100% of drilling, completion and testing costs for the three additional exploration wells.
Each party to the licence [i.e. Touchstone and Heritage) remains responsible for its working interest costs associated with commercial development, including expenditures relating to facilities construction and development drilling. No acreage was surrendered pursuant to the extension, with the licence amendment agreement now required to be approved by the Trinidad attorney general's office and Ministry of LegalAffairs prior to execution.
As Touchstone discusses today, the licence extension provides the opportunity for an expanded exploration programme at Ortoire and the ability to undertake a multi-faceted drilling programme combining exploration and development wells on the resource-rich Ortrnre block. We congratulate the company on the formal approval of the Drtoire licence extension, ahead of commercial sales from Coho and Cascadura and drilling of the Royston Deep and Kraken exploration wells (targeting the Herrera subthrust and deeper Cretaceous zones, respectively).
Following Touchstone's recent reserves and operational update, and in line with its usual reporting schedule, we anticipate the release of FY21 financial results later this month and look forwa rd to fully rev1s1ting our models at that juncture.
In the meantime, our last-published Risked NAV estimate stands at 240p/share and - whilst there are obviously various moving parts within this - we remain very comfortable with this figure, given the healthy reserves upgrade confirmed on Monday and the encouraging operational update accompanying this......."