Mr. Paul Baay reports

TOUCHSTONE ANNOUNCES EXPANDED BANK DEBT AND A DRILLING UPDATE

Touchstone Exploration Inc. has provided updates on its bank debt and drilling operations.

Bank debt

Touchstone's wholly owned Trinidadian subsidiary, Touchstone Exploration (Trinidad) Ltd., has entered into a binding term sheet with its existing Trinidad-based lender providing for an increase in borrowing capacity of $13-million. The parties are currently documenting an amended and restated bank loan agreement and related security registrations, following which the additional credit capacity will become effective.

The principal changes included in the amended bank loan are as follows:

• A new $10-million five-year non-revolving term loan facility, with no principal repayment in the first year and 16 equal and consecutive quarterly payments thereafter;
• An increase in the company's current revolving loan facility borrowing capacity from $7-million to $10-million, which will mature two years from the execution date and may be renewed at the option of the parties thereafter.

Following execution of the amended bank loan, Touchstone's facilities will consist of its unchanged existing seven-year term loan facility, the new five-year $10-million term loan facility and the increased $10-million revolving loan facility.

The existing seven-year non-revolving term loan facility has a current principal balance of $21-million, with 14 equal and consecutive quarterly principal payments of $1.5-million outstanding through to the June 15, 2027, maturity date. Touchstone has $7-million drawn on our revolving loan facility, resulting in an aggregate $28-million in bank debt principal currently outstanding.

Touchstone intends to use the additional amended bank loan facility borrowing capacity to finance its 2024 capital program as presented in its Dec. 19, 2023, news release entitled "Touchstone Announces 2024 Capital Budget, Preliminary 2024 Guidance and an Operational Update."

Drilling operations

Touchstone has commenced drilling the Cascadura-3 development well and the CO-374 development well. Cascadura-3 was spudded on March 1, 2024, from its Cascadura C surface location on the Ortoire block, in which it has an 80-per-cent working interest. The well is targeting gas-charged sands in the Herrera formation northeast of the recently drilled Cascadura-2 well and is expected to be drilled to an anticipated total depth of 7,000 feet using Star Valley rig No. 205. CO-374 was spudded on Feb. 28, 2024, on its CO-1 block, in which it has a 100-per-cent working interest. The well is targeting crude oil-charged sands in the Cruse and Forest formations and is expected to be drilled to a total depth of 6,600 feet using PCSL rig No. 8.

The Cascadura-2 well has been successfully cased after it encountered wellbore instability issues due to high gas pressures which resulted in the need to sidetrack a portion of the well. Operations are proceeding on the road and pipeline right-of-way, which will tie in the Cascadura development wells to Touchstone's Cascadura natural gas facility. This project includes the preparation of the Cascadura B surface location, which has been approved for the drilling of up to four additional development wells.

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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