Mr. Paul Baay reports

TOUCHSTONE EXPLORATION ANNOUNCES PRIVATE PLACEMENT UPDATE

Touchstone Exploration Inc. has provided an update regarding its previously announced private placement arranged by Portillion Capital Asset Management Ltd. and Oak Securities.

As disclosed in the company's announcement on June 23, 2025, and notwithstanding repeated assurances from Portillion and Oak Securities, 10,324,500 British pounds of the 15,375,000 British pounds gross proceeds from the placement have not been received. This includes 10 million British pounds relating to Portillion's subscription commitment.

As previously announced on May 16, 2025, the company issued 75 million new common shares to the settlement agent acting on behalf of Oak Securities for distribution to placees under the placement. The extended deadline to complete the placement under the conditional approval granted by the Toronto Stock Exchange expired on June 27, 2025. Consequently, Touchstone closed on the 5,050,500 British pounds of gross proceeds received as of that date, completing the issuance of 24,636,586 common shares, subject to receipt by the TSX of customary postclosing materials, which the company expects to deliver today.

The remaining 50,363,414 new common shares, which remain with the settlement agent pending receipt of the outstanding funds, will be cancelled.

Following the cancellation, the company's issued share capital and total voting rights will consist of 261,097,247 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 any change to their interest in, the company.

The company is reviewing its options in respect of Portillion's failure to fulfill its subscription commitment under the placement. Touchstone remains focused on securing the financing necessary to continue its 2025 capital program, including meeting its obligations under the fourth amended and restated loan agreement with Republic Bank Ltd.

While there can be no guarantee that the outstanding placement proceeds will be received, the company intends to submit a new application to the TSX for conditional approval of a further issuance of new common shares, enabling completion of Portillion's subscription should the funds be forthcoming.

Under the terms of the loan agreement, Touchstone is required to raise not less than approximately $18-million (U.S.) in equity proceeds on or before Dec. 31, 2025, or such later date as may be agreed with the lender. Following the completion of drilling the Cascadura-5 well, the company will defer further activity under its 2025 capital program. Considering whether the outstanding placement funds are ultimately received, Touchstone will evaluate financing options in the near term to satisfy the requirements of the loan agreement in relation to the raising of equity capital and to be able to resume its 2025 capital program.

About Touchstone Exploration Inc.

Touchstone Exploration is a company based in Calgary, Alta., 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 (Alternative Investment Market) of the London Stock Exchange under the symbol TXP.

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