Touchstone Exploration Inc. (“Touchstone” or the “Company”) (TSX / LSE: TXP), announces that it intends to complete a private placement directed towards United Kingdom institutional investors (the “Private Placement” or the “Placing”). The Company expects to raise gross proceeds of £3.8 million (approximately C$6.5 million) by way of a placing of 31,666,667 new common shares of no par value (the “New Common Shares”) at a price of 12 pence (approximately C$0.205) per New Common Share (the “Placement Price”).

The Placement Price represents a 4 per cent discount to 12.5 pence, which was the closing price of the Company’s common shares on the AIM market of the London Stock Exchange on February 18, 2019. As part of the Placing, Teathers has secured a £150,000 allocation, which will be made available to onboarded users of the Teathers App via a Live Market Bookbuild. The Live Market Bookbuild will be conducted through the Teathers App and will involve the issue of up to 1,250,000 new Ordinary Shares at the Issue Price of 12 pence per share. The Live Market Bookbuild will commence at 8am on Tuesday 19 February 2019 and will close at 5pm on Monday 25 February 2019. Settlement is expected to occur on Wednesday 26 February 2019, on which date contract notes will be issued on completion of the deal.

Touchstone intends to use the net proceeds from the Private Placement to finance the drilling of an exploration well in the Corosan west region of its Ortoire exploration property (80% working interest). Touchstone anticipates spudding the well in the second quarter of 2019 targeting a total depth of 9,000 feet. For details of the nature and quantities of contingent and prospective gas resources targeted, see the estimates prepared by the Company’s independent reserve and resource evaluators summarised in the Company’s January 17, 2019 announcement. In response to the crude oil price volatility experienced in the fourth quarter of 2018, Touchstone has held back from recommencing a development drilling program. This remains under active review, and the Company expects to use cash flows from operations to finance future development drilling based on the prevailing commodity market. The Company delivered average crude oil sales volumes of 1,994 barrels per day in January 2019. Shore Capital and GMP FirstEnergy acted as joint brokers in connection with the Private Placement.

Listing and Voting Rights Application has been made for the New Common Shares, which will rank pari passu with the Company’s existing issued share capital, to be admitted to trading on the Toronto Stock Exchange (“TSX”) and AIM (“Admission”). Subject to the receipt of required approvals from the TSX and AIM, the New Common Shares are expected to be issued and admitted to trading on February 26, 2019. The New Common Shares will represent approximately 19.7 percent of the total issued share capital in the Company on Admission. All New Common Shares being issued by the Company pursuant to the Private Placement will be freely transferable outside of Canada; however, these shares are subject to a four-month and one day restricted hold period in Canada which will prevent such New Common Shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement. Immediately following completion and Admission of the Private Placement, the Company’s issued share capital will consist of 160,688,095 common shares. The Company does not hold any common shares in treasury. This figure may be used by shareholders to determine if they are required to notify their interest in, or a change to their interest in, the Company Related Party Transaction

The Private Placement includes a subscription by North Energy Capital AS, a 11.5 percent shareholder of the Company, in respect of 3,750,000 New Common Shares. Following Admission, North Energy Capital AS will hold 18,548,750 common shares, representing 11.5 percent of the enlarged share capital of the Company. The participation in the Private Placement by North Energy Capital AS is considered a related party transaction under Rule 13 of the AIM Rules for Companies. The Independent Directors consider, having consulted with the Company’s Nominated Advisor, Shore Capital, that the terms of the related party transactions are fair and reasonable insofar as shareholders are concerned. 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”.

Stock Specific Risks

  • The Company will be subject to typical oil and gas exploration and development risks. There is no guarantee the company will be able to define economically viable resources.
  • Any delay to the development timeline would disappoint the market and sentiment towards the shares.
  • Commodity prices will fluctuate, which could affect the economic feasibility of the project.

If you are buying outside of normal market size then this may prevent you from selling the shares at market price.

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