The oil and gas stock shooting higher as new discovery confirmed
It has been a volatile few weeks for small cap oil and gas play Touchstone Exploration (TXP:AIM) as it announced mixed news from its Ortoire block in Trinidad & Tobago.
However, confirmation that the Cascadura Deep-1 well had yielded a significant natural gas discovery (12 Apr) helped set the shares on the right path.
Touchstone had been knocked off course by news that another well – Chinook-1 – contained oil rather than gas as investors had hoped and expected (31 Mar).
Natural gas is particularly in demand in Trinidad thanks to its large industrial sector and Touchstone’s apparent bias towards gas had also insulated it from volatility in the oil price.
The company has a large inventory of prospects to drill on Ortoire with a well on its Royston prospect expected to be in focus soon.
Shore Capital analyst Craig Howie says the latest announcement provides ‘a robust basis for upgrades – which we would expect to process following discussions with management to firm up our expectations regarding commercial deliverability, timing and follow-on development plans.’
SHARES SAYS: We see scope for further upside in Touchstone.