Touchstone Exploration, the Calgary-headquartered oil and gas company with operations in Trinidad & Tobago, has confirmed plans to raise between $10m and $15m through an equity placing. The company said the funds would be used to accelerate its drilling programme and develop its onshore assets in the country.
The equity raise, which is expected to be completed via an accelerated bookbuild, will see new shares issued to institutional investors. Touchstone has not yet disclosed the exact number of shares or the placing price, but the move is likely to lead to dilution for existing shareholders.
The company has been actively developing its Trinidad portfolio, including the Cascadura field, which has been a key growth driver. Touchstone reported record production in recent quarters, and the additional capital is intended to sustain that momentum. However, the need for external funding underscores the capital-intensive nature of the oil and gas sector, particularly for smaller exploration and production firms.
For UK investors holding Touchstone shares, the placing could weigh on the stock price in the short term as new shares enter the market. The company is listed on the London Stock Exchange's AIM market, where it has a market capitalisation of around £60m. Shares have been volatile in recent months, reflecting commodity price sensitivity and operational risks.
Analysts note that while the raise provides necessary funding for growth, it also highlights the challenges faced by junior oil and gas companies in accessing capital without diluting shareholders. The success of the placing will depend on investor appetite for Trinidad-focused energy plays amid a broader shift towards renewable energy.
Source: Touchstone Exploration regulatory announcement