Touchstone Exploration : Announce Ortoire Independent Prospect Evaluation

TOUCHSTONE ANNOUNCES ORTOIRE INDEPENDENT PROSPECT EVALUATION

Calgary, Alberta - January 17, 2019 - Touchstone Exploration Inc. ("Touchstone" or the "Company") (TSX / LSE: TXP) announces a summary of the results of an independent review prepared by GLJ Petroleum Consultants Ltd. ("GLJ") of Calgary, Alberta dated January 16, 2019 of the Company's Ortoire exploration block (the "Prospect Evaluation") located onshore in the Republic of Trinidad and Tobago ("Trinidad").

The Company engaged GLJ to review each of the internally identified onshore Trinidad exploration prospects on the Ortoire exploration block and to provide an independent Prospect Evaluation in accordance with definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook ("COGEH") and National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities ("NI 51-101"). Touchstone has an 80% working interest in the Ortoire block.

The Prospect Evaluation includes an estimate of the Company's Risked and Unrisked Recoverable Volumes and the net present value of future net revenue of its Contingent Resources and Prospective Resources. The Prospect Evaluation relied on several factors including existing well bores, offset producing properties and historical production tests on two of the three prospects. The Company also utilized a combination of 2D and 3D seismic data to further delineate the individual prospects. The locations target turbidite fan sequences of the Herrera formation at depths between 7,000 and 11,500 feet.

The Prospect Evaluation was performed to provide the Company with an independent assessment of the Ortoire exploration block opportunities and to assist in quantifying individual prospects. At this time, GLJ and the Company have not included the Contingent Resources and Prospective Resources identified in the Prospect Evaluation in Touchstone's Reserves Report as the exploration license governing the Ortoire block requires the Company to first declare commerciality of any discovery prior to economic production.

Paul R. Baay, President and Chief Executive Officer, commented:

"This independent prospect evaluation provides confirmation that the prospects that have been identified by the Touchstone team are of a significant size and provide an excellent opportunity for a step change in reserves, production and net asset value of the Company. Proving this geological model could be monumental for Touchstone and Trinidad as it will set up a multi year exploration and development program."

Prospect Evaluation Summary

The prospect Evaluation classifies exploration targets in either the Contingent Resources (Development Pending) or Prospective Resources (Prospect) COGEH category. Both Contingent Resources and Prospective Resources have risks associated with the Chance of Commerciality, which is defined as the product of Chance of Development and the Chance of Discovery. Contingent Resources are defined as discovered resources, due to historical production or testing, thereby carrying no Discovery Risk. Contingent Resources have risks associated with Chance of Development only. Prospective Resources are defined as undiscovered resources, with risks associated with both Chance of Development and Chance of Discovery.

GLJ's estimate of the Recoverable Volumes and Net Present Values (both Risked and Unrisked) of the Contingent Resources and Prospective Resources identified at Ortoire are set out below. In all instances, net present value of future net revenue ("Net Present Value") is calculated as at December 31, 2018 using GLJ's pricing forecasts dated January 1, 2019 and is net of estimated future royalties, development and operating costs required to fully develop each prospect and recover all Recoverable Volumes, and abandonment and reclamation costs. Operating costs have been estimated based on the Company's current structure and take in to account premiums related to bringing new volumes on stream over time.

An estimate of risked net present values of future net revenue of Contingent Resources and Prospective Resources is preliminary in nature and is provided to assist the reader in reaching an opinion on the merit and likelihood of the Company proceeding with the required investment. It includes Contingent Resources and Prospective Resources that are considered too uncertain with respect to the Chance of Development and Chance of Discovery to be classified as reserves. There is uncertainty that the risked net present value of future net revenue will be realized.

Recoverable Volumes

Summary of Total Company Interest Contingent Resources (Development Pending)(5)(6)(8)(9)(10)

The following table summarizes GLJ's estimate of the Unrisked Recoverable Volumes associated with the Company's Contingent Resources (Development Pending) including Light and Medium Oil, Residue Gas, Natural Gas Liquids, and Oil Equivalent (each as defined under NI 51-101) for the Company's Ortoire exploration prospects.

Product Type

Unrisked
Low	Best	High
Estimate(2)	Estimate(3)	Estimate(4)

Gross	Net(1)	Gross	Net(1)	Gross	Net(1)
Light & Medium Oil (Mbbl)	495	396	1,180	944	2,738	2,190
Residue Gas (MMcf)	8,190	6,552	13,230	10,584	20,160	16,128
Natural Gas Liquids (Mbbl)	109	87	368	294	874	699
Oil Equivalent (Mboe)	1,969	1,575	3,753	3,002	6,970	5,576

Summary of Total Company Interest Prospective Resources (Prospect)(5)(7)(8)(9)(10)

The following is a summary of GLJ's estimate of the Unrisked Recoverable Volumes associated with the Company's Prospective Resources (Prospect) including Light and Medium Oil, Residue Gas, Natural Gas Liquids, and Oil Equivalent for the Company's Ortoire exploration prospects.

Unrisked

Product Type

Gross

Low	Best	High
Estimate(2)	Estimate(3)	Estimate(4)

Net(1)

GrossNet(1)

GrossNet(1)

Light & Medium Oil (Mbbl)

Residue Gas (MMcf)

Natural Gas Liquids (Mbbl)

1,980 18,486 431

1,584 14,789 345

7,800 80,334 2,313

6,240 64,267 1,850

• 23,460 18,768

• 212,949 170,359

• 7,554 6,043

Oil Equivalent (Mboe)

5,493

4,394

23,501

18,801

66,505

53,204

The range of Recoverable Values are a function of the uncertainty of various components used in the Prospect Evaluation including subsurface variables (i.e. thickness, porosity, fill, net to gross sand ratio, water saturation and hydrocarbon qualities) as well as recovery factors. As exploration activities move forward these variables will be better quantified.

The estimation of the magnitude of Touchstone's oil and gas prospects on the Ortoire exploration block and the potential commerciality of these prospects is in the early stages of exploration and appraisal. There are a number of positive and negative factors which GLJ took in to account in determining risk and overall uncertainty. The key positive factors include:

• • Touchstone has operated in Trinidad since 2010 and has sufficient drilling history and experience to be able to accurately estimate the anticipated drilling and production costs with a reasonable degree of certainty.

• • There have been a number of wells drilled on the Ortoire block by prior operators. Many of these wells are documented and several have associated production or hydrocarbon indications. All of the prospects evaluated in the Prospect Evaluation have legacy wells drilled in close proximity to the identified exploration locations.

• • Prospects classified as Contingent Resources (Development Pending) have legacy wells from the targeted reservoirs, which have tested significant quantities of hydrocarbons or were previously on production.

• • The Company's current exploration plan includes drilling wells deeper than many of the legacy wells reviewed in the evaluation, exposing the Company to potential hydrocarbon bearing zones not observed or tested in the past.

• • Touchstone's initial development plans are based solely on primary production strategies. Potential secondary and/or tertiary production schemes were not considered in the Prospect Evaluation and could result in increased future recovery factors.

• • Oil and gas markets and prices in Trinidad are strong relative to many other jurisdictions and lend themselves to robust project economics. The Company has access to both existing infrastructure with reasonable investment and few obvious impediments to market.

Negative factors with respect to the estimate of resources include:

• • The majority of the available offset well data available relevant to the Ortoire block prospects was obtained in the 1950s and 1960s and the technology and interpretive techniques of the time, and the data available to the Company cannot be verified absolutely.

• • There is no publicly available long-term well production performance from oil and/or gas prospects in the immediate area to establish a production type curve specific to the prospect, thereby requiring use of analogue information to establish development plans and to confirm the Chance of Commerciality.

• • Recovery efficiencies are uncertain given the absence of publicly available site specific long-term well production performance data on the property.

• • Although petroleum activity is commonplace onshore in Trinidad, should activity levels increase, timelines may likewise increase to achieve government approvals and access development infrastructure.

On a risked basis the Chance of Commerciality is the product of the Chance of Discovery, which takes in to account the physical, subsurface risks and the Chance of Development which looks at future risks associated with bringing the prospects to market. Chance of Developments risks include legal, regulatory, market access, economics, commitment, and timing while the Chance of Discovery risks include source, migration, trap, seal, and reservoir.

Summary of Total Company Interest Contingent Resources (Development Pending)(5)(6)(8)(9)(10)

The following table summarizes GLJ's estimate of the Risked Recoverable Volumes associated with the Company's Contingent Resources (Development Pending) including Light and Medium Oil, Residue Gas, Natural Gas Liquids, and Oil Equivalent for the Company's Ortoire exploration prospects. For the Company's Contingent Resources, GLJ estimated the Chance of Commerciality of these targets to be 95.0%.

Risked

Product Type

Gross

Low	Best	High
Estimate(2)	Estimate(3)	Estimate(4)

Net(1)

GrossNet(1)

GrossNet(1)

Light & Medium Oil (Mbbl)

Residue Gas (MMcf)

Natural Gas Liquids (Mbbl)

Oil Equivalent (Mboe)

470 7,780 104 1,871

376 6,224 83 1,497

1,121 12,569 371 3,565

897 10,055 297 2,852

2,600 2,080 19,153 15,322 830 664

6,623

5,298

Summary of Total Company Interest Prospective Resources (Prospect)(5)(7)(8)(9)(10)

The following is a summary of GLJ's estimate of the Risked Recoverable Volumes associated with the Company's Prospective Resources (Prospect) including Light and Medium Oil, Residue Gas, Natural Gas Liquids, and Oil Equivalent for the Company's Ortoire exploration prospects. For the Company's Prospective Resources, GLJ estimated the average Chance of Commerciality of these targets to be 33.9% as the calculated product of the Chance of Development (average 95.0%) and Chance of Discovery (average 35.7%).

Risked

Product Type

Gross

Low	Best	High
Estimate(2)	Estimate(3)	Estimate(4)

Net(1)

Net(1)

Gross

GrossNet(1)

Light & Medium Oil (Mbbl)

Residue Gas (MMcf)

Natural Gas Liquids (Mbbl)

Oil Equivalent (Mboe)

678 6,250 146 1,865

542 5,000 117 1,492

2,668 27,184 783 7,981

2,134 21,747 626 6,385

• 8,024 6,419

• 71,895 57,516

• 2,543 2,034

22,549

18,039

Net Present Value

Summary of Total Company Interest Net Present Value Contingent Resources (Development Pending)(1)

The following table summarizes GLJ's estimate of the Unrisked Net Present Value associated with the Company's Contingent Resources (Development Pending).

UnriskedNet Present Values Before Income Taxes Discounted at (% per year) ($000's)

Low Estimate(2)Best Estimate(3)High Estimate(4)

0%

19,615

61,287 158,627

5%

14,352

45,901 114,309

10%

10,585

35,434 86,860

15%

7,817

28,001 68,452

20%

5,736

22,540 55,405

Summary of Total Company Interest Net Present Value Prospective Resources (Prospect)(1)

Below is a summary of GLJ's estimate of the Unrisked Net Present Value associated with the Company's Prospective Resources (Prospect).

UnriskedNet Present Values Before Income Taxes Discounted at (% per year) ($000's)

Low Estimate(2)Best Estimate(3)High Estimate(4)

0%

74,045

487,947 1,712,406

5%

48,020

319,851 1,009,326

10%

31,410

219,666 649,688

15%

20,421

156,236 443,369

20%

12,940

114,176 315,803

Summary of Total Company Interest Net Present Value Contingent Resources (Development Pending)(1)

The following table summarizes GLJ's estimate of the Risked Net Present Value associated with the Company's Contingent Resources (Development Pending).

RiskedNet Present Values Before Income Taxes Discounted at (% per year) ($000's)

Low Estimate(2)Best Estimate(3)High Estimate(4)

0%

18,634

58,223 150,696

5%

13,634

43,606 108,593

10%

10,056

33,662 82,517

15%

7,426

26,601 65,029

20%

5,449

21,413 52,635

Summary of Total Company Interest Net Present Value Prospective Resources (Prospect)(1)

The following is a summary of GLJ's estimate of the Risked Net Present Value associated with the Company's Prospective Resources (Prospect).

RiskedNet Present Values Before Income Taxes Discounted at (% per year) ($000's)

Low Estimate(2)Best Estimate(3)High Estimate(4)

0%

25,338

166,192 582,224

5%

16,442

108,826 342,549

10%

10,765

74,656 220,087

15%

7,009

53,036 149,907

20%

4,452

38,709 106,561

Summary of Total Company Interest Production Upside(1)(10)

The table below summarizes the potential upside to the Company's working interest production, as estimated by GLJ on an Unrisked basis for both Contingent Resources and Prospective Resources in Barrels of Oil Equivalent:

Peak Daily Oil Production (boepd)

Low Estimate(2)Best Estimate(3)High Estimate(4)

Unrisked Contingent Resources Unrisked Prospective Resources

832 2,042

1,439 2,375

8,640 16,673

For the Company's Contingent Resources and Prospective Resources, in all estimated cases GLJ forecasted the date of first commercial production to occur in late 2019. In both the Contingent Resources and Prospective Resources analysis, Recoverable Volumes have been estimated based on developed technology, and on offset wells currently depleting analogous reservoirs within the basin. The overall development strategy for the project is based upon a conceptual model generated by the independent evaluator in coordination with Touchstone.