Canada's Touchstone petroleum and gas Q4 sales fall 19% on lower production and pricing

Overview

• Canada oil and gas producer's petroleum and natural gas Q4 sales fell 19% yr/yr due to lower production and pricing

• Touchstone reported Q4 net profit, mainly from deferred tax recovery and asset disposition gains

• Company faces material uncertainties over going concern, citing liquidity and debt covenant risks

Outlook

• Company expects production growth from 2025 and 2026 drilling programs and improved commodity pricing

• Touchstone projects a breach of bank debt covenants as of Dec 2026, may require waivers or amendments

• Company may implement contingency measures including optimizing capital expenditures or seeking additional financing

Result Drivers

• LOWER PRODUCTION AND PRICING - Co said Q4 revenue decline was mainly due to reduced production volumes and softened realized commodity prices

• CENTRAL FIELD CONTRIBUTION - Central field added 2,065 boe/d to portfolio since acquisition, partially offsetting declines at other assets

• INCREASED OPERATING EXPENSES - Higher natural gas operating expenses contributed to lower operating netback

Company press release: ID:nACSHYrX9a

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 1 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the oil & gas exploration and production peer group is "buy"

• Wall Street's median 12-month price target for Touchstone Exploration Inc is C$0.35, about 66.7% above its March 30 closing price of C$0.21

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