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Touchstone Exploration reports steady Q2 2025 Central Block production growth post-Shell acquisition, with increased LNG-linked revenue diversification and upcoming drilling plans.
This article covers information on Touchstone Exploration.
LON:TXPTouchstone Exploration (LSE: TXP) has just dropped its first operational update since snapping up Shell’s Central Block asset in Trinidad back in May – and there are a few interesting nuggets to chew on. The acquisition, giving Touchstone a 65% operating stake (with Heritage Petroleum holding the remaining 35%), is starting to show its colours. Let’s break down what the numbers and the narrative are telling us.
First up, production. It’s not a moonshot, but it’s solid, steady growth – exactly what you want to see when integrating a new asset:
That’s a modest but meaningful quarter-over-quarter uptick. Crucially, Touchstone attributes this to “continued plant optimisation” since they took the reins on May 16th. It suggests they’ve hit the ground running and are already squeezing more efficiency out of the existing infrastructure. Net production (Touchstone’s 65% share) naturally followed suit, rising from 1,930 boe/d to 1,965 boe/d.
Where things get particularly interesting is the revenue mix. Central Block gas flows through two distinct pipelines:
The reported revenue covers January to April 2025 (remember, Touchstone only owned it from mid-May, so this reflects the asset’s performance pre and post-acquisition for that period):
The pricing differential between the two markets is stark:
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This highlights a crucial point: the headline LNG price looks attractive, but the associated costs of getting it to the export market significantly erode the netback. The domestic price, while potentially lower on the open market, delivers a better net return once costs are factored in.
Paul Baay, Touchstone’s CEO, struck a confident tone, emphasising two key strategic wins:
Touchstone isn’t just sitting back. They’ve completed site surveys for two new well pads, each capable of hosting up to four future drilling locations. The ball is now in the government’s court – they’re “awaiting construction approvals”. This is the next potential catalyst for significant production growth, though timing on permits is always a watchpoint.
This first Central Block update paints a picture of a smooth integration and early operational success for Touchstone. Steady production growth is being delivered, and the strategic value of diversifying their revenue streams – particularly adding that LNG exposure – is front and centre. While the netback on LNG sales highlights significant cost structures, the overall acquisition rationale appears sound based on this initial performance. The focus now shifts to securing those drilling permits to unlock the next phase of growth. One to watch.
As always, remember this contains forward-looking statements (plenty of them detailed in the RNS!) dependent on factors like commodity prices, government approvals, and operational execution. BOE figures use the 6:1 conversion ratio – see the advisories in the announcement for the important nuances on that.
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