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Oilman Jim's Private Blog


Touchstone Exploration - Private Placement Raising a Minimum US$9.1 Million

CALGARY, ALBERTA (February 19, 2020) - Touchstone Exploration Inc. ("Touchstone", "we", "us" or the "Company") (TSX / LSE: TXP) announces a proposed placing (the "Placing") of a minimum of US$9.1 million (approximately £7.0 million) through the issue of common shares of no par value (the "Placing Shares") with institutional investors in the United Kingdom at a minimum price of 38 pence per Placing Share (approximately C$0.66) (the "Placing Price"). The Placing Price represents a 14.6 percent and 8.3 percent discount to 44.47 pence and 41.46 pence, being the five and ten day volume weighted average price of the Company's common shares on the AIM market of the London Stock Exchange ("AIM") as of February 18, 2020, respectively. In the event of excess demand, the Company reserves the right to increase the size of the Placing. The Placing is being completed by way of an accelerated bookbuild. Shore Capital is acting as sole bookrunner in connection with the Placing.

Background to the Placing and Use of Proceeds

The Company commenced its exploration program on the Ortoire block, onshore in the Republic of Trinidad and Tobago (Touchstone 80% working interest) in the second half of 2019, drilling two gross exploration wells (1.6 net). Coho-1, the first natural gas prospect, had an encouraging production test that exceeded the Company's expectations. Touchstone completed drilling its second Ortoire exploration prospect, Cascadura-1, in December 2019, and the first stage of production testing in February 2020 confirmed a substantial liquids-rich gas discovery.

On the basis of the successful results from the first two Ortoire exploration wells, the Company is launching the Placing in order to support the drilling of a further Ortoire exploration well at the Chinook prospect, which is targeting a separate structure along the same geological trend. The net proceeds of the Placing are also expected to be used to complete the second stage of the Cascadura-1ST1 production test and provide additional working capital for the Company while it progresses the Ortoire exploration program. Subject to the result of the Placing, operational cashflows from ongoing production and prevailing commodity pricing, the Company intends to undertake drilling of the fourth exploration well at the Royston prospect on the Ortoire block and continue well recompletions on its current development properties in 2020.

Details of the Placing

The Placing is being completed within the Company's existing share issuance authorities. Shore Capital and Corporate Limited and Shore Capital Stockbrokers Limited (together, "Shore Capital") will be conducting an accelerated bookbuilding process in respect of the Placing (the "Bookbuild"). The book will open with immediate effect. Shore Capital has entered into an agreement with Touchstone (the "Placing Agreement") under which, subject to the conditions set out therein, Shore Capital will agree to use its respective reasonable endeavours to procure subscribers for the Placing Shares at the Placing Price. The Placing is subject to the terms and conditions set out in the Appendix to this announcement. Members of the public are not entitled to participate in the Placing.

The Placing Shares will, when issued, be credited as fully paid and will rank pari passu in all respects with Touchstone's existing issued common shares of no par value each ("Common Shares"). Details of the final number of Placing Shares and the Placing Price will be announced as soon as practicable after the closing of the Bookbuild.

Application will be made for the Placing Shares to be admitted to trading on the Toronto Stock Exchange ("TSX") and AIM ("Admission"). It is expected that Admission will take place at or around 8.00 a.m. (London time) on February 26, 2020 (or such later date as may be agreed between the Company and Shore Capital). The Placing is conditional upon, inter alia, Admission becoming effective. The Placing is also conditional upon the Placing Agreement not being terminated in accordance with its terms.

All Placing Shares will be freely transferable outside of Canada; however, the Placing Shares are subject to a four-month and one day restricted hold period in Canada which will prevent such Placing Shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement.

This announcement should be read in its entirety. In particular, you should read and understand the information provided in the "Important Notice" section of this announcement.

About Touchstone

Touchstone Exploration Inc. is a Calgary based company engaged in the business of acquiring interests in petroleum and natural gas rights and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company's common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol "TXP".

For further information about Touchstone, please visit our website at or contact:

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