Touchstone Exploration (TSX, LSE:TXP) swung to a net income of $0.08 million in the third quarter of 2026, reversing a $2.06 million net loss in the same period of 2025.
The Trinidad and Tobago-focused oil and gas producer, listed on the Toronto Stock Exchange and AIM, reported petroleum and natural gas sales of $16.46 million for the quarter, up 30% from $12.70 million a year earlier, as a 49% rise in realized commodity price per barrel of oil equivalent (boe) offset a 13% drop in sales volumes.
Production averaged 4,485 boe/d, down 13% from 5,142 boe/d in the third quarter of 2025, which the company attributed to planned compressor maintenance and a well shut-in on the Central block, alongside lower crude oil volumes.
Output rose 1% from the second quarter's 4,433 boe/d, driven by the completion of the Cascadura facility compression project.
Operating netback climbed 82% to $22.58 per boe from $12.38 per boe a year earlier, reflecting higher realized prices across crude oil, NGLs and natural gas, partly offset by higher royalty expenses.
Funds flow from operations rose to $5.37 million from $0.74 million in the prior-year quarter.
Natural gas, which made up 72% of output, sold at an average $5.02 per thousand cubic feet (Mcf), with Central block gas realizing an estimated $7.81 per Mcf against $2.58 per Mcf for Ortoire gas sold under Touchstone's fixed-price contract; Central block volumes were sold under the Atlantic LNG Train 2/3 supply contract in July during the Train 4 maintenance outage.
Net debt fell 17% quarter-on-quarter to $57.34 million at 30 September, helped by $3.55 million in bank debt repayments and the repayment of an $8.4 million debenture issued in the June 2026 integrated financing, with proceeds resubscribed for common shares.
The working capital deficit narrowed to $20.1 million at quarter-end from $28.7 million at 30 June, largely reflecting that debenture settlement; excluding the convertible debenture maturing in August 2028, the adjusted working capital deficit stood at $9.0 million, down from $18.4 million.
Cash stood at $8.1 million, down from $9.2 million at 30 June, with long-term bank debt principal of $35.8 million and the revolving credit facility fully drawn.
Touchstone has scheduled bank debt principal repayments of approximately $12.7 million over the next 12 months, continues to pursue recovery of approximately $12.0 million in outstanding VAT receivables, and has estimated minimum contractual payments of approximately $13.1 million due during the remainder of 2026, of which roughly $11.2 million relates to the Ortoire exploration commitment and the Balata East development well obligation, which it is seeking to defer.
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Capital expenditure of $1.76 million in the quarter went mainly toward the PS-623 crude oil development well on the WD-4 block, which was completed and brought on production in October at a field-estimated rate of approximately 290 barrels per day of crude oil over its first 16 days; a second WD-4 well was spud on 29 October.
At the Central block, the CR-3 Karamat completion underwent a five-day pressure buildup test that built wellhead pressure to approximately 1,600 psi and was still building when a further flow test began, with the well producing at an average gross natural gas rate of approximately 2.3 million cubic feet per day on a 90% open choke; CR-3 will undergo another brief buildup test before moving to permanent production.
Field-estimated production for October averaged 5,020 boe/d, comprising 20.3 million cubic feet per day of net natural gas (3,377 boe/d) and 1,643 barrels per day of net crude oil and liquids.