Touchstone Exploration Inc.
TSX VENTURE : TAB.U

Touchstone Exploration Inc.

January 31, 2011 19:02 ET

Touchstone Announces Closing of Coora Block Acquisition

CALGARY, ALBERTA--(Marketwire - Jan. 31, 2011) - Touchstone Exploration Inc., (TSX VENTURE:TAB.U) ("Touchstone" or "the Company") is pleased to announce completion of the acquisition, through its indirect wholly-owned subsidiary Territorial Services Limited, of a 100% interest in certain Lease Operatorship Agreements related to the Coora block, certain Farm-out Agreements with respect to the New Dome and South Palo Seco blocks and associated equipment and production facilities in Trinidad & Tobago all as originally announced in the Company's news release of November 2, 2010. Transfer documents are escrowed but will be effective from January 31, 2011 pending payment of the purchase price from funds released from escrow by Computershare Trust Company of Canada (see below). The aggregate consideration to be paid is (US)$7.640 million cash as adjusted for closing reimbursements contemplated by the Asset Purchase Agreement. Touchstone also assumed all obligations and liabilities under the Lease Operatorship Agreements and Farm-out Agreements from and after closing, and all existing and future environmental obligations and liabilities with respect to operations pursuant to these agreements on the Coora, New Dome and South Palo Seco blocks.

The two lease operatorship blocks acquired at Coora CO-1 and CO-2 cover approximately 1700 acres of land and provide access to over 350 wellbores. The acquisition of the New Dome and South Palo Seco blocks includes oil production, as well as, over 2500 acres of land held under Farm-out Agreements. The areas have well developed infrastructure and good access, and are covered by a 3-D seismic program that is presently being shot. 

In connection with the acquisition, Touchstone raised an aggregate of US$12,859,367.40 pursuant to a marketed "best efforts" private placement subscription receipt financing managed by a syndicate of agents lead by FirstEnergy Capital Corp., which included Paradigm Capital Inc. and Haywood Securities Inc. (collectively, the "Agents"). An aggregate of 23,380,668 subscription receipts were issued at price of (US)$0.55 per subscription receipt, all of which have now been deemed to be converted, without any further payment or further action by the holders thereof, on a one-for-one basis into units of Touchstone, each unit consisting of one common share of Touchstone and one-half of one common share purchase warrant of Touchstone, with each whole warrant being exercisable for one common share at an exercise price of (US)$0.75 until June 11, 2012.

The aggregate subscription receipt proceeds were held in escrow by Computershare Trust Company of Canada pending the completion of the transaction and were released today to fund the acquisition price and general working capital.

As consideration for their services in respect of the private placement, the agents were paid a cash commission equal to 6% of the gross proceeds raised in the private placement, one-half paid at closing of the respective private placement and the other one-half paid upon the release of the subscription receipt proceeds.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities of Touchstone Exploration Inc. have not been registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

The companies in which Touchstone Exploration Inc. directly and indirectly owns investments or assets are separate entities. In this news release "Touchstone" and "the Touchstone Group" are sometimes used for convenience where references are made to Touchstone Exploration Inc. and its subsidiaries in general.

Cautionary Note Regarding Forward-looking Statements: Information in this press release that involves Touchstone's expectations, plans, intentions or strategies regarding the future are forward-looking statements that are not facts and involve a number of risks and uncertainties. Touchstone generally uses words such as "outlook", "will", "could", "would", "might", "remains", "to be", "plans", "believes", "may", "expects", "intends", "anticipates", "estimate", "future", "plan", "positioned", "potential", "project", "remain", "scheduled", "set to", "subject to", "upcoming", and similar expressions to help identify forward-looking statements. Forward-looking information in this press release may include, but is not limited to, information with respect to the benefits of the proposed acquisition, exploration opportunities and timing for and completion of the acquisition and the private placement. The forward-looking statements in this press release are based upon information available to Touchstone as of the date of this press release. Forward-looking statements believed to be true when made may ultimately prove to be incorrect. These statements are not guarantees of the future performance of Touchstone and are subject to risks, uncertainties and other factors, some of which are beyond its control and may cause actual results to differ materially from current expectations. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, the ability of Touchstone to realize the anticipated benefits of the acquisition. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which have been used. For further information regarding specific risks and uncertainties applicable to Touchstone please see Touchstone's Filing Statement and the most recent management discussion and analysis may be viewed with other Touchstone disclosure documents through the Internet on the Canadian System for Electronic Document Analysis and Retrieval (SEDAR) at www.sedar.com. Touchstone does not undertake any obligation to publicly update forward-looking information except as required by applicable securities law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

Contact Information

  • Touchstone Exploration Inc.
    Mr. Paul Baay
    Chairman & Chief Executive Officer
    (403) 619-8407