Touchstone Exploration Inc. (TAB.V) reported its operating and financial results for the third quarter of 2012. The Company is currently reporting under International Financial Reporting Standards ("IFRS") and all values in this release are in thousands of United States dollars unless otherwise stated.
During the third quarter of 2012, drilling, recompletions and continued improvements in the Company's operations resulted in increased sales volumes and associated revenue. Revenue net of royalties for the period were $8,411 which represents an increase of 30% from $6,476 during the second quarter ending March 31, 2012 and an increase of 253% from $2,380 over the third quarter of 2011.
In the third quarter of 2012 the Company closed the sale of its 33.8% non-operated interest in the Moruga Block in South Central Trinidad for aggregate proceeds of $10,000. The Company also secured long-term financing to replace the $23,300 vendor take back note that was used to finance a portion of the Primera acquisition in 2011.
Higher sales volumes realized as a result of the Company's ongoing capital program resulted in improvements to both administrative and operating costs as compared to the second quarter of 2012 and the third quarter of 2011.
The Company continues to have success with its drilling program and has focused on drilling strategic locations with increased operational and capital efficiency. This has been accomplished by increasing in-house drilling expertise and taking advantage of existing wellbores to sidetrack locations rather than drilling wells from new surface locations.
This program has yielded a reduction in drilling costs of nearly 20% as compared to previous wells and has reduced both preparation and drilling time significantly. The Company's first sidetrack well drilled on WD-8 in July has produced over 4,500 bbls to date at an average rate of over 150 bbls/d. The Company's second sidetrack well came on production in mid-August at over 50 bbls/d.
In August 2012 the Company drilled and cased its first well on the Coora block which it acquired in February 2011. Drilled to a total depth of nearly 3,000 feet, this new vertical well encountered approximately 350 feet of net oil pay with 200 feet in the Upper Forest Formation and 150 feet in the Lower Forest Formation. This well is expected to be completed and on stream in September 2012 and a second location is 80% complete and will be drilled prior to year-end.
Drilling operations have now moved