Mr. Paul Baay reports

TOUCHSTONE EXPLORATION ANNOUNCES 2023 YEAR-END RESERVES

Touchstone Exploration Inc. has released 2023 year-end reserves.

Touchstone's independent reserves evaluation was prepared by GLJ Ltd. with an effective date of Dec. 31, 2023. Highlights of the company's total proved developed producing (PDP), total proved (1P), total proved plus probable (2P) and total proved plus probable plus possible (3P) reserves from the reserves report are provided below. Unless otherwise stated, all financial amounts referenced herein are stated in United States dollars. Financial information contained herein is based on the company's unaudited results for the year ended Dec. 31, 2023, and is subject to change.

Touchstone's 2023 year-end reserves reflect the initial transition of its Cascadura production base into the PDP reserves category as it brought on stream the first two Cascadura wells, Cascadura-1ST1 and Cascadura Deep-1. In addition to successfully constructing and commissioning the Cascadura natural gas and liquids facility in 2023, it also prepared for its Cascadura C delineation and development program.

In 2023, the company achieved initial production from its Cascadura field which produced net volumes of 37.4 million cubic feet/day of natural gas and 622 barrels/d of natural gas liquids in the fourth quarter of 2023, contributing to corporate average quarterly net production volumes of 8,504 barrels of oil equivalent/d and average 2023 annual net production volumes of 3,981 boe/d.

2023 year-end reserves report highlights:

• Relative to year-end 2022 and after 2023 production, the company increased gross PDP reserves by 180 per cent to 13,547 Mboe, decreased gross 1P reserves by 12 per cent to 33,696 Mboe, decreased gross 2P reserves by 10 per cent to 67,379 Mboe and decreased gross 3P reserves by 10 per cent to 108,859 thousand boe in 2023.
• PDP reserves replaced 2023 annual production by 699 per cent, reflecting Cascadura-1ST1 and Cascadura Deep-1 natural gas and associated liquids volumes that were brought on-line in 2023.
• With the addition of Cascadura property reserves, PDP reserves represent 40 per cent of 1P reserves, reflecting an attractive ratio of base production to low-risk proved undeveloped (PUD) drilling targets.
• Reductions in the company's 1P, 2P, and 3P year-end reserves balances from 2022 reflected the removal of eight PUD locations on its non-core legacy crude oil blocks and Royston, technical revisions to the natural gas liquids yields at Cascadura, increased annual production volumes in 2023, and a limited 2023 development capital program.
• The company's net present value of future net revenues discounted at 10 per cent (NPV10) on a before-tax PDP basis increased by 142 per cent to $151.4-million, decreased by 30 per cent to $372.5-million on a 1P basis, decreased by 27 per cent to $730.1-million on a 2P basis and decreased by 29 per cent to $1.05-billion on a 3P basis from the prior year.
• Realized after-tax PDP NPV10 of $99.8-million representing an increase of 93 per cent from the prior year, after-tax 1P NPV10 decreased by 25 per cent from year-end 2022 to $191.4-million, after-tax 2P NPV10 decreased by 24 per cent from the prior year to $342.5-million and after-tax 3P NPV10 decreased by 26 per cent from 2022 to $482.6-million.
• The company continues to maintain a long producing reserve life index of 7.9 years 1P and 14.4 years 2P, reflecting the low-decline nature of its asset base.
• The Cascadura-2 well was drilled subsequent to the effective date of the reserves report and will be reflected in the company's future reserve evaluations.

2023 year-end reserves report summary

Touchstone's year-end light and medium crude oil, heavy crude oil, conventional natural gas and natural gas liquid reserves in Trinidad were evaluated by independent reserves evaluator, GLJ, in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook and National Instrument 51-101 -- Standards of Disclosure for Oil and Gas Activities. Additional reserves information as required under NI 51-101 will be included in the company's annual information form, which will be filed on SEDAR+ on or before March 30, 2024.

The reserve estimates set forth below are based upon GLJ's reserves report dated Feb. 29, 2024, with an effective date of Dec. 31, 2023. The reserves report uses the average price forecasts of the three leading Canadian oil and gas evaluation consultants (GLJ, McDaniel & Associates Consultants Ltd. and Sproule Associates Ltd.). All values in this news release are based on the three consultants' average forecast pricing and GLJ's estimates of future operating and capital costs as of Dec. 31, 2023.

Reconciliation of gross reserves by product type

The attached table sets forth a reconciliation of the company's total gross proved, gross probable and gross proved plus probable reserves as of Dec. 31, 2023, by product type against such reserves as at Dec. 31, 2022, based on forecast prices and cost assumptions.

Dec. 31, 2023, gross proved plus probable reserves were 67,379 Mboe, representing a 7,695 Mboe or 10-per-cent decrease from the 75,074 Mboe reported in the prior year. Relative to Dec. 31, 2022, light and medium crude oil reserves decreased by 2,006 million bbl. The annual decline predominately reflected a combination of annual production, the removal of two proved undeveloped drilling locations at Royston and six proved undeveloped drilling locations at the company's CO-2 field, partially offset by two new proved undeveloped drilling locations at its CO-1 property and improved recovery from well recompletions at its WD-4 field. Proved plus probable heavy crude oil reserves decreased by 592 Mbbl from the prior year, reflecting the removal of all future recompletion activity at the Fyzabad property and 2023 production. Proved plus probable conventional natural gas reserves decreased by 5,604 MMcf relative to Dec. 31, 2022, mainly attributed to annual Cascadura and Coho field production. Proved plus probable natural gas liquids reserves decreased by 4,102 Mbbl in comparison with Dec. 31, 2022, reflecting a reduction in forecasted Cascadura natural gas liquids yields and 2023 annual production.

Future development costs

The attached table provides information regarding the development costs deducted in the estimation of the company's future net revenue using forecast prices and costs as included in the reserves report.

The attached table sets forth the changes in undiscounted future development costs (FDC) included in the reserves report against such costs in the company's Dec. 31, 2022, reserves report prepared by GLJ dated March 3, 2023.

Forecast pricing and costs

Forecast pricing and costs are prices and costs that are generally acceptable, in the opinion of GLJ, as being a reasonable outlook of the future as of the evaluation effective date. The forecast cost assumptions consider inflation with respect to future operating and capital costs. The attached table sets forth the benchmark reference commodity prices and inflation rates reflected in the reserves data as of Dec. 31, 2023. These price assumptions were provided to the company by GLJ and represented the average price forecast of the three consultants as of the date of the reserves report.

January, 2024, sales volumes and realized prices

In January, 2024, the company achieved average net sales volumes of 7,436 boe/d as follows:

• Cascadura contributed net sales volumes of 5,799 boe/d consisting of:
• Net natural gas sales volumes of 32.8 MMcf/d or 5,460 boe/d with a realized price of $2.47 per thousand cubic feet;
• Net natural gas liquids volumes of 339 bbl/d with an average realized price of $68.15 per barrel;
• Coho field net average natural gas sales volumes were 2.8 MMcf/d or 467 boe/d at a realized price of $2.28 per Mcf (excluding third party processing fees);
• Average net daily crude oil sales volumes were 1,170 bbl/d per day with an average realized price of $68.15 per barrel.

January, 2024, production decreased by approximately 11 per cent from December, 2023, attributed to natural declines and the Cascadura Deep-1 well being shut in for four days in the month.

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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