A Trinidad-focused energy minnow that spent the first quarter in the red has swung back into profit — and this time investors liked what they saw.
Touchstone Exploration (AIM: TXP), which produces oil and natural gas onshore Trinidad, said funds flow from operations jumped to US$7.13m in the second quarter, almost four times the US$1.85m generated in the first three months of the year. The company swung to net income of US$2.34m from a US$2.38m loss in the previous quarter, as petroleum and natural gas sales rose 39% quarter-on-quarter to US$17.47m on firmer commodity pricing. The shares responded in kind, climbing around 19% to about 9.5p in early London trading.
The profitability was driven as much by cost discipline as by pricing. Operating netback — the cash margin earned on each barrel after royalties and operating costs — improved 77% to US$24.37 per barrel of oil equivalent. That came despite production slipping 5% sequentially to an average of 4,433 barrels of oil equivalent per day, a dip Touchstone attributed to planned maintenance at Atlantic LNG that temporarily restricted its natural gas output.
Central to the quarter was the Cascadura compression project, which was commissioned in late June and entered service on 9 July. Gross natural gas production from the field has since averaged about 16.5 million cubic feet per day, a performance the company said had exceeded expectations even though the wells remain choke-restricted — meaning output is being deliberately held back and could rise further. Elsewhere, the Baraka East-1 recompletion averaged 2.3 million cubic feet of gas a day plus 72 barrels of liquids over its first 30 days, and two development wells on the WD-8 block were brought online.
Balance-sheet repair was the other theme. Net debt fell 10% quarter-on-quarter to US$68.71m, helped by a financing that generated US$10.2m of net proceeds. After the period end, Touchstone repaid an US$8.4m debenture and redirected the funds into an equity subscription, further simplifying its capital structure. For a company that only a year ago was wrestling with stubborn debt and disappointing well results, the sequential turn in cash generation is the number bulls will point to.
The caveats are familiar for a single-country producer. Touchstone’s fortunes remain tied to Trinidadian gas pricing and to the reliability of downstream infrastructure such as Atlantic LNG, as the maintenance-driven production dip underlined. Sustaining the Cascadura ramp-up, and converting choke-restricted potential into booked output, will decide whether the second-quarter rebound marks a turning point or a single strong period. For now, after a bruising run, the market has given Touchstone the benefit of the doubt.
This report is based on Touchstone’s second-quarter 2026 results and coverage by Proactive Investors and Share Talk. Company announcements can be tracked via London Stock Exchange RNS and Investegate, and the full results calendar is worth watching for the next update.
This article is for general information only and does not constitute investment advice or a recommendation to buy or sell any security. Photo: Sven Piper on Unsplash.
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