Touchstone Exploration Inc. has announced an agreement with Trinity Exploration and Production Plc for an all-share acquisition, consolidating their operations in Trinidad and Tobago.
Under the terms, Touchstone will acquire all issued and to be issued ordinary share capital of Trinity. Trinity shareholders will receive 1.5 common shares of Touchstone for each Trinity common share held. This represents an implied value of Trinity of approximately $30.1 million, with a premium of 71.9 percent to Trinity’s closing price on April 30, 2024, on AIM, the London Stock Exchange’s market.
Key Highlights:
- Creation of a Trinidadian operator with substantial onshore and offshore exploration and development assets.
- Combined funds flow from operations will support concurrent investment in multiple development programs, accelerating asset base potential.
- Expected accretive impact on funds flow from operations for Touchstone shareholders in the first full year post-acquisition.
- Anticipated economies of scale and cost synergies, including a reduction in combined fixed overhead and corporate costs.
- Post-acquisition, existing Touchstone shareholders will own approximately 80 percent of the company, with Trinity shareholders owning the remaining 20 percent.
Touchstone’s president and CEO, Paul Baay, views the acquisition as strategically compelling, offering enhanced scale, balance sheet strength, and growth opportunities. The consolidation will position the combined entity as a major player in Trinidad’s oil and gas sector, capable of delivering growth in reserves, production, and cash flows.
The acquisition integrates Trinity’s assets seamlessly into Touchstone’s existing operations in Trinidad, providing a robust portfolio of exploration and development prospects across both onshore and offshore segments. The combined entity is expected to have a producing portfolio of approximately 11,700 to 12,400 barrels of oil equivalent per day and estimated proved plus probable reserves of approximately 80.3 million barrels of oil equivalent as of December 31, 2023.
Touchstone anticipates strong cash flows from operations post-acquisition, facilitating increased investment in multiple development programs to unlock the full potential of the combined asset base. The diversified portfolio offers significant opportunities for long-term value enhancement.
For more information visit www.touchstoneexploration.com
