Mr. Paul Baay reports

TOUCHSTONE ANNOUNCES SECOND QUARTER 2023 FINANCIAL AND OPERATING RESULTS

Touchstone Exploration Inc. has released its operating and financial results for the three and six months ended June 30, 2023.

Selected information is outlined below and should be read in conjunction with the company's June 30, 2023, unaudited interim condensed consolidated financial statements and related management's discussion and analysis, both of which will be available under Touchstone's profile on SEDAR and on its website. Unless otherwise stated, all financial amounts herein are rounded to thousands of United States dollars.

Paul Baay, president and chief executive officer, commented:

"I am pleased to provide an update on our financial and operational results for the second quarter of the 2023 financial year. The results come as we continue to focus our efforts on the commissioning of the Cascadura facility and completing production testing at Royston-1X. We look forward to providing shareholders with further updates in the near term."

Second quarter 2023 financial and operational highlights:

• Achieved quarterly production average volumes of 1,827 boe/d (barrels of oil equivalent per day), representing a 29-per-cent increase relative to the 1,420 boe/d produced in the prior-year equivalent quarter;
• Natural gas production from the Coho-1 well averaged net volumes of 4.2 MMcf/d (million cubic feet per day) (703 boe/d) in the quarter and contributed $811,000 of net natural gas sales at an average realized price of $2.11/Mcf (thousand cubic feet);
• Realized petroleum and natural gas sales of $7,181,000 compared with $12,596,000 in the 2022 comparative quarter, as $811,000 in net natural gas sales were offset by decreased crude oil sales of $6,226,000, reflecting a 36-per-cent decline in realized crude oil pricing and a 21-per-cent decrease in crude oil production;
• Generated an operating netback of $2,826,000, representing a 51-per-cent decrease from the 2022 equivalent quarter primarily attributed to the 43-per-cent decline in petroleum and natural gas sales;
• Reported funds flow from operations of $6,000 in the quarter compared with $803,000 in the preceding quarter and $1.15-million in the prior-year equivalent quarter;
• Recognized a net loss of $71,000 (nil per basic share) and comprehensive income of $136,000 in the quarter compared with a net loss of $262,000 (nil per basic share) and a comprehensive loss of $529,000 reported in the same period of 2022;
• $5,135,000 in quarterly capital investments primarily focused on expenditures related to the construction of the Cascadura natural gas and liquids facility and two Royston-1X production tests;
• Amended the company's Trinidad-based loan agreement in May, 2023, allowing for an additional $7-million revolving loan component that was fully drawn in June, 2023, to provide liquidity while Touchstone completes construction of the Cascadura facility;
• Exited the quarter with a cash balance of $10,138,000, a bank debt principal balance of $31-million and a net debt position of $28,913,000.

About Touchstone Exploration Inc.

Touchstone Exploration is a Calgary, Alta.-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 Alternative Investment Market of the London Stock Exchange under the symbol TXP.

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