£3M (C$5M) PLACEMENT AND INCREASED DRILL PROGRAMME

 

 

 

 

 

TOUCHSTONE EXPLORATION INC. 

 

£3M (C$5M) PLACEMENT AND INCREASED DRILL PROGRAMME

 

Calgary, Alberta - December 8, 2017 - Touchstone Exploration Inc. ("Touchstone" or the "Company") (TSX / LSE: TXP), announces that it intends to complete a private placement directed towards United Kingdom institutional investors (the "Private Placement"). The Company is raising gross proceeds of £3.0 million (approximately C$5.0 million) by way of a placing of 25,784,285 new common shares of no par value (the "New Common Shares") at a price of 11.5 pence (approximately C$0.20) per New Common Share (the "Placement Price"). The Placement Price represents a 6.1 percent discount to 12.25 pence, which was the closing price of the Company's Common Shares on AIM on December 7, 2017.

 

The Company previously announced that it plans to drill four wells on its Coora 2 and WD-8 properties commencing in January 2018. The Company intends to use the net proceeds from the Private Placement of approximately £2.7 million (approximately C$4.6 million) to finance the expansion of Touchstone's 2018 drilling programme from four wells to ten wells. The additional wells are expected to be drilled on the Company's Coora 1, WD-4, WD-8 and South Palo Seco properties. In conjunction with the enlarged drilling programme, Touchstone's Board of Directors also approved a 24 well recompletion programme in 2018.

 

Shore Capital and GMP FirstEnergy acted as joint brokers in connection with the Private Placement. Mackie Research Capital Corporation acted as a strategic adviser.

 

Paul Baay, President and Chief Executive Officer, commented:

 

"We are pleased to be able to commit this additional funding into a continuous ten well 2018 drilling programme in Trinidad. Not only will the enlarged capital programme allow for greater cost efficiencies, it will also satisfy our lease operatorship agreement minimum work obligations through 2020. We would like to thank our shareholders for their continued support as we enter an ambitious growth period in 2018."

 

Listing and Voting Rights

 

Application has been made for the New Common Shares, which will rank pari passu with the existing issued share capital, to be admitted to trading on the Toronto Stock Exchange ("TSX") and AIM ("Admission"). Subject to the receipt of required approvals from the TSX and AIM, the New Common Shares are expected to be issued and admitted to trading on December 22, 2017. The New Common Shares will represent approximately 20 percent of the total issued share capital in the Company on Admission. The Placement Price represents a 17.1 percent discount to C$0.2362, which was the volume weighted average price of the Company's Common Shares on the TSX for the five trading days ending November 27, 2017.

 

All Common Shares being issued by the Company pursuant to the Private Placement will be freely transferable outside of Canada; however, these shares are subject to a four-month and one day restricted hold period in Canada which will prevent such common shares from being resold in Canada, through a Canadian exchange or otherwise, during the restricted period without an exemption from the Canadian prospectus requirement.

 

Immediately following completion and Admission of the Private Placement, the Company's issued share capital will consist of 128,921,428 Common Shares. The Company does not hold any Common Shares in treasury. This figure may be used by shareholders to determine if they are required to notify their interest in, or a change to their interest in, the Company.

 

The Private Placement includes a subscription by North Energy Capital AS, a 5.41 percent shareholder of the Company. Following Admission, North Energy Capital AS will hold 12,879,250 Common Shares, representing 9.99 percent of the enlarged share capital of the Company.

 

For further information, please contact:

 

Touchstone Exploration Inc.

Mr. Paul Baay, President and Chief Executive Officer                                Tel: +1 (403) 750-4487

Mr. Scott Budau, Chief Financial Officer

Mr. James Shipka, Chief Operating Officer

www.touchstoneexploration.com

 

Shore Capital (Nominated Adviser and Joint Broker)

Nominated Adviser: Edward Mansfield / Mark Percy                                  Tel: +44 (0) 20 7408 4090

Corporate Broking: Jerry Keen

 

GMP FirstEnergy (Joint Broker)

Jonathan Wright / Hugh Sanderson                                                          Tel: +44 (0) 207448 0200

 

Mackie Research Capital Corporation (Strategic Adviser)

Kevin Shaw                                                                                           Tel: +1 (403) 750-1280

 

Camarco (Financial PR)

Nick Hennis / Jane Glover / Billy Clegg                                                    Tel: +44 (0) 203 757 4980

 

About Touchstone

 

Touchstone Exploration Inc. is a Calgary based company engaged in the business of acquiring interests in petroleum and natural gas rights, and the exploration, development, production and sale of petroleum and natural gas. Touchstone is currently active in onshore properties located in the Republic of Trinidad and Tobago. The Company's common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the symbol "TXP".

 

Advisories

 

For reference purposes in this announcement, one British pound has been translated into Canadian dollars at a rate of 1.00 to 1.70.

 

Forward-Looking Statements

 

Certain information provided in this announcement may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements in this announcement include, but are not limited to, those in respect of the anticipated closing date of the Private Placement, the satisfaction of all required conditions and approvals (including approvals from the TSX and AIM) for completion of the Private Placement, and the Company's use of the net proceeds, including the potential undertaking, timing, number, and locations of future well drilling and well recompletions. Although the Company believes that the expectations and assumptions on which the forward-looking statements are based are reasonable, undue reliance should not be placed on the forward-looking statements because the Company can give no assurance that they will prove to be correct. Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors and risks. Certain of these risks are set out in more detail in the Company's Annual Information Form dated March 21, 2017 which has been filed on SEDAR and can be accessed at www.sedar.com. The forward-looking statements contained in this announcement are made as of the date hereof, and except as may be required by applicable securities laws, the Company assumes no obligation to update publicly or revise any forward-looking statements made herein or otherwise, whether as a result of new information, future events or otherwise.

 

Important Notice

 

No prospectus or admission document will be made available in connection with the matters contained in this announcement.

 

In any EEA Member State that has implemented Directive 2003/71/EC (together with any implementing measures in any Member State ("the Prospectus Directive") other than the United Kingdom) this announcement is only addressed to and directed at persons in such member states who are qualified investors within the meaning of Article 2(1) (e) of the Prospectus Directive ("Qualified Investors"). In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order, and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "Relevant Persons"). Any investment or investment activity to which this announcement relates is available only to Relevant Persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom, and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

 

This announcement must not be acted on or relied on by persons who are not Relevant Persons. Persons distributing this announcement must satisfy themselves that it is lawful to do so. Any investment or investment activity to which this announcement relates is available only to Relevant Persons and will be engaged in only with Relevant Persons. This announcement does not itself constitute an offer for sale or subscription of any securities in the Company.

 

Neither this announcement nor any copy of it may be taken or transmitted, published or distributed, directly or indirectly, in whole or in part, in, into or from the United States of America (including its territories and possessions, any state of the United States of America (the "United States" or the "US")), Australia, Japan or the Republic of South Africa or transmitted, distributed to, or sent by, any national or resident or citizen of any such countries or any other jurisdiction where to do so would constitute a violation of the relevant securities laws of such jurisdiction (each a "Restricted Jurisdiction"). Any failure to comply with this restriction may constitute a violation of United States, Australian, Japanese or South African securities laws.

 

This announcement does not constitute, or form part of, any offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any shares or other securities in any Restricted Jurisdiction. The Private Placement and the distribution of this announcement and other information in connection with the Private Placement and Admission in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

 

The New Common Shares referred to in this announcement have not been and will not be registered under the United States Securities Act of 1933, as amended (the "US Securities Act") or under the securities laws of any state or other jurisdiction of the United States, and may not be offered, sold or transferred within the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act. The Common Shares have not been and will not be approved or disapproved by the US Securities and Exchange Commission, any state securities commission or other regulatory authority in the United States, nor have any of the foregoing authorities passed upon or endorsed the merits of the Private Placement or the accuracy or adequacy of this announcement. Any representation to the contrary is a criminal offence in the United States.

 

The information contained in this announcement is for background purposes only and does not purport to be full or complete.

 

No reliance may or should be placed for any purposes whatsoever on the information contained in this announcement or its accuracy, completeness or fairness. The information in this announcement is subject to change. However, the Company does not undertake to provide the recipient of this announcement with any additional information, or to update this announcement or to correct any inaccuracies, and the distribution of this announcement shall not be deemed to be any form of commitment on the part of the Company to proceed with the Private Placement or any transaction or arrangement referred to in this announcement.

 

This announcement has not been approved by any competent regulatory authority. Shore Capital and Corporate Limited ("SCC") is nominated adviser to the Company. SCC, which is authorised and regulated by the Financial Conduct Authority ("FCA"), is acting exclusively for the Company and no one else in connection with the proposed Private Placement and Admission and will not be acting for any other person or otherwise responsible to any person other than the Company for providing the protections afforded to clients of SCC or for advising any other person in respect of the Private Placement and Admission.

 

Shore Capital Stockbrokers Limited ("SCS") and FirstEnergy Capital LLP ("GMP FirstEnergy") have been appointed as joint brokers to the Company. SCS and GMP FirstEnergy, which are authorised and regulated by the FCA, are acting exclusively for the Company and no one else in connection with the proposed Private Placement and Admission and will not be acting for any other person or otherwise responsible to any person other than the Company for providing the protections afforded to clients of SCS and GMP FirstEnergy or for advising any other person in respect of the Private Placement and Admission.

 

Inside Information

 

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014.