Touchstone Exploration Inc. has revealed its financial and operational results for the second quarter ended June 30, 2026, showcasing a notable recovery in funds flow and net income.
For the second quarter of 2026, Touchstone reported a funds flow from operations of $7.13 million, a substantial increase from $1.85 million in the previous quarter. The company's net income for the quarter stood at $2.34 million, reversing a loss of $2.38 million in the first quarter.
Petroleum and natural gas sales reached $17.47 million, reflecting a 39% increase from $12.54 million in the prior quarter. This increase was primarily fueled by improved pricing across all commodity streams. Operating netback significantly improved to $24.37 per barrel of oil equivalent (boe), a 77% increase from $13.73 per boe in the first quarter.
Despite financial gains, the company experienced a 5% decrease in production, with an average output of 4,433 boe/d, down from 4,657 boe/d in the previous quarter. This decline was attributed to planned maintenance on third-party infrastructure at Atlantic LNG, which limited natural gas production.
To address production challenges, Touchstone continues to focus on operational enhancements, including the commissioning of the Cascadura booster compressor and the completion of development wells on the WD-8 block. These initiatives aim to optimize production as infrastructure constraints ease.
Touchstone reported a net debt reduction of 10%, bringing the total to $68.71 million at the end of the quarter. The company also completed an integrated financing initiative that generated net proceeds of $10.20 million, which contributed to strengthening its capital structure.
Subsequent to the quarter-end, the company fully repaid an $8.4 million debenture, redirecting the proceeds towards equity subscription, thereby eliminating the associated debt obligation.
The company acknowledged potential uncertainties regarding its ability to continue operations as a going concern, primarily influenced by commodity price fluctuations and ongoing debt commitments. Management remains committed to enhancing operational performance and optimizing its cost structure to navigate these challenges.
Touchstone Exploration reported funds flow from operations of $7.13 million for the second quarter of 2026, a significant increase from $1.85 million in the prior quarter.
Highlights for Q2 2026 include a net income of $2.34 million compared to a net loss of $2.38 million in Q1 2026, and petroleum and natural gas sales of $17.47 million, representing a 39% increase from the previous quarter's $12.54 million.
During the second quarter of 2026, production was temporarily constrained due to planned third-party infrastructure maintenance at Atlantic LNG, which affected natural gas production.
Touchstone achieved an average production level of 4,433 boe/d in Q2 2026, which is a 5% decrease from the 4,657 boe/d reported in the previous quarter.
Touchstone reported an operating netback of $24.37 per boe in Q2 2026, representing a 77% improvement from the $13.73 per boe recorded in Q1 2026, indicating enhanced profitability relative to commodity prices.
Touchstone completed a multi-jurisdictional integrated financing that generated net proceeds of $10.20 million and subsequently eliminated an $8.4 million debenture by converting it to equity, which positively impacted its financial position.
The company acknowledges material uncertainty regarding its ability to continue as a going concern, driven by factors such as prevailing commodity prices, production performance, and the timing of capital programs.
Touchstone's common shares are traded on the Toronto Stock Exchange and the AIM market of the London Stock Exchange under the ticker symbol 'TXP'.