Touchstone Exploration Inc

TSX:TXP

Earnings Call Analysis

Earnings Call Transcript 2023-Q3

[Operator]

Good afternoon, and welcome to the Touchstone Exploration Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question it received in the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so.

Before we begin, I'd like to slip the following poll. I'd now like to hand you over to Paul Baay, CEO. Good afternoon, sir.

[Paul Baay, executive]

Thank you. Thank you very much, and welcome, everybody. I know you said good afternoon. I'm in Calgary here today, so it's actually good morning as well. So I'd like to welcome everybody.

This is the first of our what we anticipate being quarterly calls following our release of our quarterly financials yesterday. So look forward to those on a go-forward basis as we go. We thought it's a great opportunity to give everybody an update, maybe give you a little more insight into some of the things that are in the quarterly. So I'll just run through this fairly quickly and then open it up. I know we've got a bunch of questions, and we can certainly -- we'll get through as many of those as we can today.

Just for anybody that's on that's a little bit new to the Touchstone story, our focus is it remains in Trinidad, onshore in Trinidad. We trade both on the Toronto Stock Exchange and on the AIM in London. And really, what we've done over the last 13 years is built a company here that is designed to really have a nice 5-year view of what we can do going forward. And it's been -- the last 1.5 years has really been focused on bringing on some big discoveries that we made 3 years ago and get those on production.

And this quarter is really interesting because it's actually the first quarter that we really see a glimpse, if I'll call it that, of what the island is capable of and what we're capable of doing. The main reason that we really like Trinidad is it's in that [ active end ] of the Venezuelan Basin. The rocks here are great. And if you look at our track record, we drilled 70-plus wells, and we really have only had a couple of disappointments in there. So it sort of talks to the quality of the rock and the hydrocarbons and what we see.

The other thing about Trinidad is it is a great market to be able to sell both gas and oil, very large petrochemical business there that's right now is short probably about 1.5 Bcf a day of gas production. So that's why you can see that once we get these fields on production, they're basically flowing at 100% load factor, which is really a nice thing to see.

And on the oil side, because of the infrastructure on the island, we can tie our oil in and sell it on a daily basis. So those are really some really key things. And Trinidad is very much pro oil and gas exploration. And that, I think, is something else that is really advantageous for us.

When we look at our track record, we continue to do 2 things. We focus on some of our short-term objectives, which is getting production on, creating cash. And then the second part of the objective is to look beyond that. Things always take a little longer than -- in Trinidad and in a lot of these international jurisdictions, they take a little bit longer just with process and things. So we always have to be looking out a little bit further, and that's something that we've been doing.

And when you look at what we've now put together, we're working on things today that are going to happen 1 year or 2 years from now and just keep that pot full of opportunities. The key thing for us is to keep a balance in what we're doing. And up until probably last year, we were really an exploration company, and that's a fairly high-risk model.

The transition that we really see now is now we're both a development company and an exploration company. We've got a really good base production level. And then now what we can do is fully fund our exploration program. So it's been a nice transition. It's been -- as everything has maybe been a little slower than we would have liked, but it really feels like we're there now.

The key takeaway from today is really that this is the start of us being able to utilize all this excess capacity that we have with the 2 gas plants and all the oil facilities that we have. We've got about 42,000 BOEs a day of capability. And the target now is just to focus on filling those up as much as we can as quickly as we can.

So to give you a little bit of the highlights, I'm sure most of the people on this call have read through the highlights in the release yesterday. But basically, what happened in the final month of that quarter, so in September, the 2 wells came on at Cascadura and started to add to production. So the production uptick you see, this 167% increase in production over the quarter of last year, was really the result of the Cascadura wells coming on in that final month of the quarter. And it obviously increased our production sales. It increased funds flow.

And I think the other thing that's really interesting when you see, we now bring those assets from our exploration accounts into our production accounts. And you can see that what that does is it also flows through for positive earnings where we saw almost $1 million of positive earnings in the quarter. So I think that talks to profitability. It talks about long-term profitability, and that's really a key thing for us.

On the debt side of things, you can see our debt sitting at about $29 million. That's a combination of the term loan that we have in place in our operating line. And I think it's important to kind of point out that over this last year, we paid down that operating loan or the term loan by about $1.5 million a quarter.

So even though we've been building these facilities and we've been doing all these other things, we also have been paying down the term loan debt, which is really important, I think, long term for us to look at. Gives us the flexibility going forward if we want to ramp the program up. It gives us lots of flexibility on the balance sheet.

We are now the largest independent producer onshore in Trinidad. And that -- I think that that's something that we've been striving for, for quite some time. But when I talk about -- that's the short term. The long term is this particular map where we talk about these fairways that we've identified, the land positions that we've now put together in at various different stages.

We've got the Ortoire block, which is kind of moving a little bit from an exploration block into a development block, although there is lots of exploration drilling to do. Then you've got the Rio Claro block, which is near-term exploration; and then Cipero and Charuma, which are a little longer-term exploration opportunities. And that kind of talks about layering in of the things that we want to see as we go forward.

But the 2 big things for us and really the changes in 2023, and I know a lot of people have heard this, is we brought on the Cascadura facility and we brought on the 2 wells. The first well came on in September 6. The second well came on in September 14, so right at the end of the last quarter. Really, I also want to emphasize that we've built that entire facility with no lost time incidents. It was a really great operation, took a little bit longer than we initially anticipated, but I think done safely. And having it in the position that it's in now is a real positive for us and our shareholders when we do those things.

We talk about current production, I'll talk about that a little bit more. We originally brought these wells on and then we've had some issues with the facility. What we wanted to do was have this facility be a closed system so that there would be no flare on the system. To be honest with you, it was designed to really, really capture all the gas that we had. Because of some of the compression that we've had in place, some of the challenges that we've had in place, we haven't been able to ramp up the wells as quickly as we would like to.

I think I'm confident today saying that, that ramp-up is going to start here in the next couple of weeks. And as I mentioned in the press release, by the end of the year, we'll see volumes in there that we want to see. The target is to get to that 60 million cubic feet a day. That is our target. I've been asked a lot about whether we're going to ramp up beyond that. I think it's fair to say at current pricing, we really don't see a need to do that. We can fund our program fully out of what we have in place. So that's going to be our target and that's where we want to -- that's where we've always said we want to get to, and that is where we want to get to.

As far as preparing the development drilling for the next wells, Cascadura, that's already -- the crew is in the field. And right now, what they're trying to do is certify the rig. It hasn't drilled in quite some time. It's sitting over the location. So it has to be recertified under the Trinidad operations. As soon as they've done that, then we'll -- we can commence operations.

The CO-1, this is also referred to as Coora. I know some people were asking whether this is Coho. This is not Coho, this is CO-1, this is one of our legacy properties on the west side of the island. We've got 2 commitment wells to drill there. As soon as the rig is ready to move there, the lease is ready to go. It looks like now the operator has told us that might be in December. Realistically, it's in the first quarter of 2024.

So what are our goals between now and the end of the year is to optimize the production at Cascadura. I think that's well underway. It would have been nice if we would have been able to kind of ramp things up right off the get-go. But if these things happen, there's nothing we can do about it. So that's what our target is.

The work-over scheduled at Coho, we did successfully shut off the water at Coho for a matter of hours, and then the downhole assembly that we had in place didn't work. Full credit to the service company. They've stood by their tool, and they're importing another tool. And in the next month or 2, we'll run a second tool down the hole and do a second attempt at their cost. So although there's a little bit of a delay, it's not going to cost us any more money, I think, which is clear.

And then the work-over program at Royston, the plan there is probably move there in the next couple of weeks. And the target there is to just isolate the upper 2 most tests and test those individually. If they work great, that would be great. I think I want to caution everybody on that, that although there's great indications on the logs, until we have that test done, I just don't think we can really comment anything on that in what we see. So that's going to happen in the next couple of weeks and likely won't hear anything on that until the beginning of next year.

At Cascadura, this is a map structure that everybody will have seen in our presentations before. But basically, what you can see there is the CAS-2 and CAS-3 wells that are going to be drilled off of the new pad. They're basically drilling to the northeast of our existing 2 wells. And I think it's important just to talk about Cascadura that's on production right now, the ST1 well and the deep well, they're not producing from the same sheet or they're in the same horizon, but they're isolated from one another.

So you know what, at this point, when we're talking about the kind of volumes that we're talking about coming out of there, it's really one straw into this pool. And I think it's really important to understand the magnitude of how big these wells are. And certainly, nothing has changed on that. When we look at CAS-2 and CAS-3, you can see they will go down, test all the way down through the deeper zones in the Herrera, and then we'll co-mingle those when we produce them.

So we're pretty excited about those -- that program getting underway as soon as all the approvals for the rig are done. So we're looking forward to that. And that will obviously bring those back to the plant and tie them in as quickly as we can.

This is the CO-1 development. We probably haven't seen this map before. Really what it is, is I think what it does is it shows all the different sort of blocks within our properties on the west side of the island. There's these big sheets, but they're all broken up by all these little faults. And what we can do is identify these smaller compartments and then drill them up. So those 2 red stars will be the 2 wells that we'll drill from the same pad, just 2 bottom hole locations in what we see.

So what have we got? This is the start of the 5-year strategy. We've got 229 locations. We've got 50 of them high-graded. We got the 2 rigs that we got planned initially for drilling at CO-1 and drilling at Cascadura. We've identified development drilling at Coho, which will obviously would happen in 2024 as well. And then with that in place, we see 20,000 BOEs a day of production growth as we go forward in what we see.

The other thing I want to talk a little bit just quickly about is our strategy for going forward on the gas contracts. We obviously have a lot of gas that's licensed under this gas contract. Current pricing on that contract is disclosed in the press release. And I think we have to be a little careful that we don't accelerate too much of this production on the front end when we're dealing with, I would say, lower prices. What we really want to do is we want to make sure that we're getting full value for that gas as we go forward. So we want to make sure that we've got all the proper contracts and pricing in place to optimize what we see for all of our shareholders.

So the investment case, we've got lots of opportunities here to increase the production levels, Cascadura, the Coho water shutoff, the development at Coho, additional drilling at CAS. I think the good thing about that is we're inventory-rich now with the production now coming on the way we see it. We can fund these operations. We've got the land to do that. And I think the most -- one of the most important things is anything we find can go to market as quickly as we can get it to market.

So that's kind of a quick little summary of where we're at. I'll maybe go and move into some of the questions. I'll just go back here, leave that slide up. These were some of the pre-submitted questions.

[Paul Baay, executive]

The first one is, can you confirm how often, how regularly you update the market on Cascadura and Coho's production?

We would see doing that quarterly. If something were to go completely sideways, obviously, we're obligated to tell you that. And conversely, if something is going really well, we obviously have to do that as well. But I think that these are just going to be quarterly updates, and you'll get a really good feel of consistency on that.

How much will the CapEx cost to take Cascadura facility 90 million cubic feet a day?

Nothing. The facility right now is capable of 90 million cubic feet a day. So there's no additional capital costs in that. It's -- that's what it's designed for. There would be additional capital cost to take it up to the full 200 million a day. And I think that's around $5 million or $6 million of additional cost to take it up into that.

The Cascadura -- the next one is, will the Cascadura C drilling include looks at the deeper thrust?

Yes, we'll take that down as far as we can. If you recall, when we drilled the first well, the only reason we didn't get deep is we couldn't control the wellbore because the gas was coming at us. I'd love to have that same problem in the next one that we're drilling, although we're putting in place some different parameters to hopefully evaluate that. But yes, we could get all the way through. The idea will be to get down as far as we can.

Next question, is there a solution in sight for Shell Carapal Ridge gas pressure issue?

Yes, I think the solution is going to be pretty simple on our end. If we can shut off the water, we'll get some higher rates out of that well. We're hoping. And then, quite frankly, it's just to have more straws into that pool and then we can push that through the Shell system. So Coho is designed for -- the facility is designed for about 24 million cubic feet a day. We've got the 2 development wells to drill there plus the Gibba exploration well that we'll test. And our thinking right now is that we should be able to get that to the full 24 million a day of capacity. That would be our objective there and what we're looking at doing.

Shell has been up and down. They've been having some plant -- trouble at the plant. The good news about that is it gives us an opportunity to look at our wells and see the pressures. And that first well at Coho really does bounce back beautifully. It's a nice little well. So we've taken over 2 billion cubic feet out of there since we brought it on production. So although it's the smallest in the portfolio, it gives you an idea of where these wells kind of will level out at.

How long has the recycle been -- compressor not been operational?

Well, really since day 1, to be honest with you. We ended up using buying used units that have been refurbished. And the reason for that is the lead time of buying new units would have put us well beyond what we wanted to. We actually ran them in Houston before we put them on the boat to send them over. And either in shipping or moving them from the dock to the field, whatever, they seem to have got pretty beaten up. And so it's taken us quite a while to get them all back up and running. But I think what we're seeing now, and I hope you're kind of reading through a little bit, as we're starting to crank up these wells, you'll see the -- those units are -- that's hopefully in the rearview mirror in what we're looking at now.

Will I update the market immediately on the RNS upon completion of the final facility commissioning?

Probably not. I think what we'll look for is we'll look for some sort of update in the new year once we've got some other things. We'll just -- we'll continue to give operational updates as we go along. I think the most important update that you'll see between now and the end of the year is the week of December 17, we'll have a full forecast for 2024. So that will be the first time that we've done that. So you'll get a really good look at what's going on. And I guess in answer to that question, it will also hopefully give everybody comfort as to where we are at Cascadura.

Does your analysis of the Cascadura field production to date continue to confirm your preproduction assumptions about the long-term field production profile?

I think bottom line is these are big wells. You can see the volume. Even with the wells choked back, we're doing 48 million cubic feet a day. So I think that, that gives you a really good idea of the capabilities here. As I mentioned before, these 2 wells are producing from different zones. So you really only have one straw into the pool. So the bottom line to that is yes, I mean, these are world-class wells. There's no doubt about it. So as we've always said, we're going to need more wells to drain this pool, and that's why we've got to get back to the drilling program.

Would it be 100% correct to say only mechanical fixable issues are holding back production at Cascadura?

No. As I mentioned, at Cascadura, we are choking oils at surface, right? So that's the main reason that they're choked back at this point.

When do you anticipate reaching 90 million cubic feet a day production at Cascadura? I wouldn't see that, to be honest with you, happening until late 2024 or after midyear 2024. And there's 2 reasons for that. One is pricing, as I mentioned, we don't really want to do that. And the other one will be we really don't need to blow this down any harder than we need to, to fund the operations that we've got. So I think people need to start focusing on the base production, how we best manage this field, how we fund our operations, and that's really what we're looking at doing.

I've answered the next one here, so that's around production volumes. When exactly is the work-over at Royston scheduled? The rig right now is anticipated to move in the next couple of weeks. So that's sort of the schedule for Royston. As I mentioned in the press release, our plan would be to get that all that work done by the end of the year. And the same thing at Coho would be to get that all done at the end of the year.

The question here is, you mentioned CO-1. Is that Coora?

Yes. So I apologize for the confusion on that. But CO-1 is our Coora-1 property and the Coho is at the Ortoire property. So that is the way those are.

Next question is, can the compressor be repaired or modified?

I'm not going to answer that again. I think that's in the rearview mirror for us now. So that's -- I think that's a good thing. I'm not going to promise anybody until we've had a couple of weeks of us being able to do things on it, but that's where we're at there.

Is there any limit on how long TXP can flare before the compressor issue is sorted?

No, there's no limit on that right now. We're working with the government. And let's be clear, these flare volumes aren't that significant, but we really want to do the best thing on the ESG side that we can. We really want to have 0 emissions wherever we can. And anybody that's read our ESG report, we look at doing that on everything that we can. So that's one of the big drivers for us here.

What's going to be the phasing in for the ramp-up of the current CAS production? We'll ramp it up between now and the end of the year. I mean that's -- I think that's a reasonable estimate in what we want to do. We won't -- we certainly don't want to do any damage to the reservoir. So we want to have our guys do it over time.

Once the CO-1 work-over in late November is completed, what will be the incremental increase in volumes?

We really don't have any idea on that because we -- there's just no way to model how much gas that current water volume is holding back. So we'll kind of wait and see on that one. But that will obviously be disclosed in our December update as well.

An average realized crude oil price, the 15% decrease in 2023 was impacted with the widening of the realized price differential in relation to the Brent. Pricing has widened from a 15.7% to a 17% discount. Can you elaborate on that differential?

Yes, we've noticed that widening as well. We are a price taker from Heritage. They do an internal calculation based on the local blend. And we really don't have a lot of input on that. And that's why the team discloses it in the MD&A is it's just -- it's there, as I say, we're a price taker. We saw it narrow a little bit again last month for October. So it does look like there's some seasonality to it a little bit. But I think right now is that, that 16% to 18% is probably the right number to be thinking about.

The question here is, when is Cascadura going to obtain normalized production with the current wells?

Again, between now and the end of the year, that's our target. That's what we'd like to do. And I think now we can start to do that. So I don't mean to be sort of evasive on that. But basically, we were waiting on trying to get those compressors fixed before we started to line out the wells. Now we're going to start to line out the wells between now and the end of the year. So we'll have a really good answer for you on that one.

What are the expected volumes for the 2 CO-1 wells?

Right now, we run those models on about 75 barrels a day. They are offsetting probably one of the best wells we've got out in those blocks. There's a particular well out there that's still doing about 150 barrels a day after multiple, multiple years. These aren't big game-changers, but when you look at the rate of returns on them, they're certainly not like our Cascadura or Coho operations, but they are commitment wells. So we have to go ahead and do that.

What's the cost of the Coora wells?

They're about $1.25 million, $1.5 million each. So they're not insignificant, but they are good rates of return on, especially with current oil price being where it is. The other thing I should mention on those particular wells is we're not moving the rig from Cascadura down there. Let's be clear, we're using another rig, a smaller rig that's located on the south end of the island. So these programs will run independent of one another.

It seems there's not a keen or aggressive to go to 90 million cubic feet. Why is that?

I'll be real frank, I don't want to sell a bunch of this gas at the current price that we're at. I think we've got to take a longer-term view of that. And I'm asking shareholders to bear with us so that we can have some reasonable discussions of what we think is the right price for the gas. We think we're supplying some of the cheapest gas on the island right now to NGC, and we don't think that's right. And it doesn't make a lot of sense for us to give that gas away, especially on the front end of the curve. So we're going to ask everybody to bear with us while we do that.

What is the debt outlook? Will TXP keep debt on their capital structure?

Yes, absolutely, we will. If you look at the MD&A, we target something less than 2x debt to cash flow. Scott and I are really -- I think what we'd like to do is keep that around 1x. And if you look at the $29 million that we've got in place, it gives you a kind of a good idea that we're striving for that. Especially when you're going to look at the Q4 annualized, you'll get a really good idea that we're well within the parameters that we've set out internally.

Why has Coho underperformed from the onset?

That's a good question. I think there's sort of 2 things at Coho. Certainly, the water volumes were higher than we anticipated at the beginning. But what we now know from the tool that we were able to run after we produced it, that, that water is coming from down below in the wellbore, and we need to shut that off. So let's get that packer in place, get that isolated, and then I think we'll get a much better idea as to what the real potential for that particular well is.

But also, don't forget, that was the smallest target of any of the ones that we drilled on the exploration block, and it was really more of a proof of concept in what we've done. And I think the other thing is when you look at the 3D data that we had, we haven't drilled in the optimal spot yet, and that's kind of where we're going to go with the next particular well. It really was a proof-of-concept well. So bear with us a little bit on that one while we continue to do that.

90 million cubic feet a day, I keep answering that question. I hope I've kind of addressed that as best as I can. Do you have any upcoming news for shareholders to look forward to in the next year?

Well, I think we do. I think when you take a look at the exploration blocks that we've got, we're going to have the Cascadura development well going. We'll have the wells at CO-1 ongoing. We're going to have the development at Coora going -- at Coho going on. I think the real excitement for everybody to start to look at is the free cash flow that this generates and as we get these wells lined up. So I think the story is different. It's not going to be these exploration wells. But hopefully, what we do is we take some of those peaks and valleys out of the rollercoaster ride. And what we can do is have this as a nice base development. And then as we drill exploratory wells, we can add to that value as we go forward.

When does the current gas contract expire?

It actually doesn't expire for the life on the lands, but there is a 5-year reopener for pricing. So it started when Coho started production back on October 10 of last year. So we're roughly 13 months into this particular contract. So there is that price renegotiation. And then the other part is any of the new lands that we get, so the Rio Claro blocks, Cipero, Charuma, those all would have new gas contracts on them. So they could theoretically have different mechanisms.

What is your latest thinking or reason with the Royston no flow and the next move to put it to pump?

Yes, I wish we had a really good explanation as why we don't think the inflow -- it certainly looks on logs like it should be inflowing, but it's not. And that's why we want to isolate these 2 zones. The one at the top that Schlumberger identified is the best of the bunch. And we want to see if we can do that. They probably will be on pump. We have a pump there. So that will all get put into place and then we'll figure out what the flow rates are.

There is discussion about whether we should look at fracking these. And fracking is easy to do on the island in the sense of, from a permitting point of view, the equipment is offshore equipment that you'd have to bring onshore, so it's not cheap. And we'd want to do some more modeling. So one of the other reasons we want to isolate these zones is we'll get some good pressure data. We'll get some -- we'll find out what type of oil we've got, what type of perm we've got, and then we can possibly model up a frac. But right now, that is not in the budget at all for us in what we're looking at.

I've answered -- there's questions in here about the production ramp-up, I think I've answered that. When will you start the continuous drilling program?

I think what we'd like to do is if everything kind of goes as planned, once we get kicked off at Cascadura, we can certainly drill those ones as a continuous program and then we have to decide where we move after that, whether we want to move up to Charuma, and that will depend on having the license signed, all of those great things, whether we'd go to Rio, again, depending on whether the license is signed. I know the team has been working on moving a little bit south of Cascadura to a prospect called Kokanee that looks pretty interesting. And if it were gas, you could bring it up into the existing system or we could go back over depending on the results at Royston. So I think when you talk about a continuous drilling program, what we want to do is find out where the opportunity is and then we'll move to wherever that is.

How long is the current deal with National Gas Company? I think I went through that one. I think everybody should have a pretty good idea on that.

Have there been any water coning issues in similar fields in Trinidad?

If you're referring to -- if the question -- if that question is around Cascadura, the only real look-alike field that we have is to the south is the Shell field, which is basically in 3 different blocks. And no, that has not been an issue in any one. Those are -- it's been pretty well just defining the curves on it in what we see.

[ Milton ] has asked a question, is there a problem with the compressor design? I think the answer to that is yes, obviously. I think there's both been mechanical and a design issue. And so we've had to design a little bit in that in the field as we've gone along in what we've done.

There's a question here, is there any progress on the land asset exchange?

They continue to push along, and this is a really classic example of how things take longer than we would like them to working through the system in Trinidad. And so that's why we need to have more things in the pipe so that we've always got something new coming down. But they're moving forward. There doesn't seem to be any roadblocks. It's just the different levels they have to go through in the chain.

[ Zoe ] is asking if the asset swap is completed. No, not yet because those still need final government approvals against to what I talked about.

Mentioned that Coho should reach or could reach 24 million cubic feet. When will we see that happening?

Well, we wouldn't drill those Coho wells until sometime in 2024. The thing is they're being drilled right on the site like literally next to the plant. So the tie-ins on those would be a couple of, at most, a couple of months after they were drilled. So those would come on very quickly. And that's why they're getting moved up in the range of what we see and also the results of what we're seeing.

Any question -- a question is, is there any water at Cascadura? The strong answer to that is absolutely none.

What is the data -- FCF at 60 million cubic -- I'm not sure what FCF they're looking for there. Oh, that's possibly cash flow. I'd like to defer that until December 17, and then Scott will have all of that information in our forecast for next year.

Well, that's just -- there's kind of the bunch of these. I apologize, I'm just reading these as we go on. A bunch of them, I've kind of asked. This is an interesting question. What is your fair view -- what's your view on a fair gas price in Trinidad?

We're all covered by NDAs in Trinidad, so I have to be a little careful, but there are some parameters that we're seeing of some of the contracts that have been renegotiated and have been made public. And the only one that I can sort of direct quote on is we do see in the EOG report that they -- they're offshore price is about $4.25, and that was renegotiated about 1.5 years ago. So it kind of gives you an idea of where the goalposts are. And I think, hopefully, people can realize that that's a fairly big gap from where we are today, and that's a lot of cash. And I'll let everybody make their own decisions on that one, but I hope everybody can bear with us while we work on that.

Would CAS-2 and 3 fit into the current 5-year pricing contract or renegotiated separately?

CAS-2 and 3 would be covered in the existing contract. But if we were to drill a well, let's say, on the Rio Claro side of what we think might be the cash structure, it would be in a new gas contract.

What is the clearing down to Pad C?

Pad C's rate go, the rig is sitting there, it's fully concrete and it's literally ready to go. So it's just a matter of -- the Star Valley guys are in country right now. They're having to do the annual or semiannual X-raying of all the rig and getting all of that done. So they're doing that, and we'll figure out when they're done all about what we can do. We didn't really want to get that started until we knew we had everything up and going on the way we've got it going.

Another question, are the compressors fully tested and certified by the manufacturer prior to delivery?

Yes, as I said, they were refurbed compressors. They were run in Houston. And as far as some of the warranty work on them, that's obviously a battle that we're going to have going forward on them. But we are having those discussions, for sure. In hindsight, it would have been nice to have bought brand-new units, but the lead time on them just didn't make sense.

I think I'm down -- the last question here is liquids line plan from A pad.

Yes, that's a really good question. We originally were going to build a liquids pipeline from the facility to pick up these liquids and take it down to the pipeline. I think right now, we're actually -- with the property swap that we've done and the Balata facility being so close, right now, we're thinking that we'll just continue to truck those volumes as we go, for sure.

A question here, did I understand correctly that Scott will answer the financial questions on December 17?

Yes, in essence, what we've told the market and what we continue to say is that we'll have a full plan for 2024 that will be laid out to you on December 17. So that will include cash flows, CapEx volumes, all of that kind of stuff. So by then, we'll know exactly where CAS volumes are. The Coho recompletion will be done. The 2 wells will be -- well, probably not drilled both wells at CO-1, but we'll have a really good idea of where we're at on that.

Last question here from [ William ], is TXP getting paid for the gas on time?

I've been asked this question a lot. What I can tell you is we've actually been paid early for both months. So NGC has been a terrific partner. Heritage has been paying all of their cash calls. And I think this talks about the real opportunity in Trinidad, right? Like there's a shortage of gas, they want us to be there. They are working with us on everything they can to make this happen as quickly as we can. It can be very bureaucratic. It can be frustrating at times, but this is a country that is in the oil and gas business. And we're now the largest onshore producer here, and it certainly gives us an opportunity to do it. And like, for instance, the CAS facility that's now there, these next 2 wells, CAS-2 and 3, can we drill them back to back? The answer is yes, we can. Like that's -- we've actually got 4 locations on that location. If things kind of go as planned, we want to drill this up as quickly as we can and get on production as quickly as we can. So...

[Operator]

Perfect. Paul, thank you very much. Let me just jump in there, and thank you for addressing those questions from investors. Of course, the company will review all the questions submitted today and will publish their responses on the Investor Meet Company platform.

But just before redirecting investors to provide you with their feedback, which is particularly important to yourself, Paul, could I just ask you for a few closing comments?

[Paul Baay, executive]

Yes, sure, I'd be happy to. And I apologize if I'm a little evasive on some of the questions around Cascadura volumes, but I don't really want to negotiate the gas contract through the public market. I don't think that's the right way to do it, but I hope shareholders get an insight that this is a 20-year project that we have here. We want to make sure that we're optimizing the value of it to our shareholders and that we're not getting penalized. And so I just really ask everybody to kind of bear with us while we manage this world-class asset as we go forward.

And then on the back side of that, the opportunities that the team has put together from a land point of view, from a drilling opportunities point of view, it's just a really exciting 5-year project that's got some short-term catalysts. And the nice part about it is it's fully funded. So we can speed up and slow down the program based on where we are on the cash, and that's a really unique and a really strong place for us to be.

[Operator]

Perfect. Paul, thank you for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company.

On behalf of the management team of Touchstone Exploration, I would like to thank you for attending today's presentation, and good afternoon to you all. Good morning to you, Paul, as well.