Drilling of Well in Caribbean Hits Thick Herrera Sands
Research Report

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Disclosures for Research Capital Corp., Touchstone Exploration Inc., January 5, 2026

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Touchstone Exploration Inc. (TXP:TSX; PBEGF:OTCMKTS) encountered about 1,000 net feet of Herrera sand throughout stacked horizons when it drilled the Carapal Ridge-3 (CR-3) development well in Trinidad and Tobago's Central block to an 8,200-foot (8,200 ft) total depth, reported Research Capital Corp. Analyst Bill Newman in a Jan. 5 research note.

"CR-3 validates the seismic model, confirms reservoir continuity and supports the potential for up to three additional Herrera development wells on the Central block," Newman wrote.

43% Return Implied

Research Capital maintained its Hold rating and its CA$0.20 per share (CA$0.20/share) target price on the Calgary, Alberta-based oil and gas company, noted Newman. In comparison, Touchstone was trading at about CA$0.14/share at the time of the analyst's report. From that price, the return to target is 43%.

The energy company has 324.7 million shares outstanding. Its market cap is CA$45.46 million. Its 52-week range is CA$0.11–0.52/share.

Imminent Plans for CR-3

Newman explained that the Herrera sands encountered during drilling of CR-3 were above and below the historical shale marker. Also, because the well "naturally built angle" during the process, 341 feet could be drilled horizontally in the previously unproduced Herrera section, maximizing reservoir exposure.

Now, Touchstone is completing CR-3, and subsequently, this quarter, the company plans to commence initial production from the lower horizontal Herrera section.

"The stacked Herrera sands in CR-3 are encouraging, but stabilized deliverability won't be known until the well is completed and on permanent production," Newman pointed out.

He reiterated the case with the Carapal Ridge-1 well. It tested the lower Herrera across multiple zones (tests 4, 5, and 6) at a combined peak rate of more than 20,000,000 cubic feet of gas and 500 barrels per day of condensate for one to two days, but was never produced.

More Upside Potential

CR-3 also encountered 82 net feet of gas-charged Karamat sands at about 6,700 ft. Because the Karamat zone on the Central block has not been produced, Touchstone is evaluating it as a separate drilling prospect.

Some Redemption Needed

Newman also noted that Touchstone must rebuild investor confidence after last year's disappointment with the Cascadura discovery on Trinidad's Ortoire block. The company spent capital on the prospect, but its efforts did not result in production or cash flow generation.

What to Watch For

The main near-term catalyst for Touchstone is strong results from a production test of CR-3, wrote Newman, expected in Q1/26. When these data are released, Research Capital will re-evaluate Touchstone.