Touchstone Exploration announced that its subsidiary, Touchstone Exploration Ltd, (TETL) has agreed to acquire all the share capital of Shell Trinidad Central Block Limited (STCBL) from BG Overseas Holdings for a cash consideration of $23m (C$32.76m).
This strategic move is set to enhance Touchstone's production capabilities and access to the LNG market.
The acquisition, with an effective date of 1 January 2025, is set to close in Q2 2025, pending regulatory and partner approvals.
Under the agreement, STCBL holds a 65% operating interest in the Central Block exploration and production licence and gas processing plant in Trinidad and Tobago, with Heritage Petroleum company owning the remaining 35%.
The Central Block currently produces approximately 18 million cubic feet per day (mcf/d) of natural gas and 200 barrels per day of natural gas liquids, translating to around 3,200 barrels of oil equivalent per day (boepd).
It includes four wells in the Carapal Ridge, Baraka and Baraka East gas pools. It offers potential for facility optimisation, infill drilling and exploration, along with existing low decline field production.
Touchstone Exploration's acquisition of the Central Block assets provides access to Atlantic LNG through natural gas sales contracts, linking the asset to both local and global LNG market pricing.
The company has identified opportunities for development, including multiple infill well locations and a deeper Cretaceous prospect.
The strategic infrastructure includes an 80mcf/d gas processing plant, flowlines and a gas export pipeline, enabling access to both the domestic market and the Atlantic LNG facility.
This acquisition increases Touchstone's net production by approximately 2,080boepd (94% natural gas) and boosts corporate cash flows.
STCBL holds three gas marketing contracts: one for the Trinidad domestic market and two for the Atlantic LNG facility in Trinidad.
The Central Block, located in the Herrera fairway, is adjacent to Touchstone's Ortoire block, offering strategic opportunities for natural gas egress and marketing from future discoveries.
Touchstone’s Coho natural gas production is currently processed at the Central Block and the acquisition presents potential synergies for the field.
The acquisition is subject to regulatory approvals and the company's ability to secure funding.
Touchstone Exploration president and CEO Paul Baay commented: "We are pleased to enter into an agreement to purchase the Central Block asset. The asset is a strategic fit with Touchstone's current land base and provides us access to world LNG prices for natural gas. The infrastructure associated with the assets provides processing and takeaway capacity for natural gas in the Herrera fairway.
“During 2025 we will consider pursuing an infill development drilling programme at Central Block and look to boost production and LNG sales."
