Mr. Paul Baay reports

TOUCHSTONE EXPLORATION ANNOUNCES POUNDS STERLING6.32 MILLION (US$8.44 MILLION) PRIVATE PLACEMENT AND RETAIL OFFER OF UP TO POUNDS STERLING0.68 MILLION (US$0.91 MILLION)

Touchstone Exploration Inc. has conditionally raised 6.32 million British pounds (approximately $8.44-million (U.S.)) by way of a private placement of 57,454,545 new common shares in the company with no par value to certain new and existing investors at a price of 11 pence (approximately 20.6 Canadian cents) per common share.

The company is proposing to raise up to an additional 680,000 British pounds before expenses (approximately $910,000 (U.S.)) by way of a retail offer to its existing shareholders through the bookbuild platform of up to 6,181,818 new common shares at the placing price. A separate announcement will be made regarding the retail offer and its terms. For the avoidance of doubt, the placing is separate from and does not form part of the retail offer.

The company intends to use the net proceeds of the placing, together with any funds raised under the retail offer, to continue its revised 2025 capital program and to satisfy the remaining equity raising requirement under the company's fourth amended and restated loan agreement with Republic Bank Ltd.

Further details of the placing

Pursuant to the placing, a new investor, Purebond Ltd., and certain existing investors have agreed to subscribe for 57,454,545 new common shares at the placing price to raise gross proceeds of 6.32 million British pounds (approximately $8.44-million (U.S.)). The placing price represents a 2.2-per-cent discount to 11.25 pence, which was the closing price of the common shares on the AIM (Alternative Investment Market) of the London Stock Exchange on Oct. 23, 2025.

Purebond is a United Kingdom-registered entity controlled and managed by the Kansagra family. A condition of Purebond's participation in the placing is that it receives the right to appoint one nominated non-executive director to the company's board of directors while its interest in the company's total issued share capital remains above 15 per cent. Accordingly, the company has entered into an investor rights agreement with Purebond, which confers the board appointment right. Subject to completion of standard regulatory due diligence, Purebond has indicated that it intends to nominate Bhupendra Kansagra, a director of Purebond, as its board nominee. A further announcement will be made in this respect in due course.

Use of proceeds

The net proceeds from the placing and the retail offer are expected to be used to finance the company's revised 2025 capital program, as outlined below. The planned expenditures include drilling one development well on the company's Central block and capital investments related to the Cascadura natural gas facility compression project, which is scheduled for completion in the second quarter of 2026.

Paul R. Baay, president and chief executive officer, commented: "This financing fully satisfies our outstanding obligations under our loan agreement, positioning us to advance our 2025 capital investment program focused on high-return projects, including drilling on the recently acquired Central block and the installation of the Cascadura compressor.

"We are grateful for the continued support of our existing investors and are pleased to welcome Purebond as a significant new shareholder in Touchstone. This strategic investment strengthens our financial position and adds valuable expertise to our board through the appointment of Mr. Kansagra, a U.K.-based director with extensive experience in the resource sector and capital markets."

Admission of the offered shares

Application has been made for the offered shares to be admitted to trading on the Toronto Stock Exchange and AIM. Subject to the receipt of required approvals from the TSX and AIM, the offered shares are expected to be issued and admitted to trading at or before 8 a.m. London time on Oct. 30, 2025.

The placing is conditional on, among other things, admission becoming effective (including final approval for the listing of the offered shares on the TSX) and the placing agreement entered into between the company and Shore Capital in connection with the placing not being terminated in accordance with its terms. The common shares to be issued pursuant to the placing will, when issued, represent approximately 18 per cent of the total share capital of the company on admission (before the issue of any common shares pursuant to the retail offer). Shore Capital acted as broker in connection with the placing.

The offered shares will, when issued, rank pari passu in all respects with the company's existing issued common shares. All offered shares being issued by the company pursuant to the placing and the retail offer will be freely transferable; however, any of these offered shares that are resold to residents of Canada (or any person otherwise subject to the securities laws of any jurisdiction of Canada) will be subject to applicable Canadian securities laws, which may include restrictions on resale, whether through a Canadian exchange or otherwise.

Update on May 8, 2025, private placement

On June 30, 2025, Touchstone Exploration announced that 10,324,500 British pounds of the 15,375,000 British pounds gross proceeds had not been received as of the TSX-approved closing deadline of June 27, 2025. As a result, the company closed on 5,050,500 British pounds in gross proceeds and issued 24,636,585 common shares.

The company has not received any further proceeds from the May 8, 2025, private placement to date. Accordingly, the company believes it is unlikely that it will receive the outstanding balance of proceeds of 10,324,500 British pounds and has therefore completed the placing to secure its near-term capital requirements.

The company has reserved all rights in connection with the May 8, 2025, private placement, and, following the completion of the placing, it has determined that it will not be pursuing litigation at this time.

Updated guidance

On Aug. 14, 2025, the company announced its revised 2025 operational and financial guidance. Following the incorporation of the Central block assets and the development activities at Cascadura reported on Sept. 29, 2025, Touchstone provides the following updates to the revised guidance.

• Average daily production: Primarily as a result of the Cascadura-5 well expected to be brought on stream in November, 2025, and initial production from the Cascadura-4ST2X well now anticipated in 2026, the company expects 2025 daily average production of 4,700 to 5,300 barrels of oil equivalent per day. This represents a decrease of approximately 600 boe/d (11 per cent) compared with the 5,600-barrel-of-oil-equivalent-per-day midpoint previously estimated in the revised guidance.
• Funds flow from operations: Updated guidance forecasts funds flow from operations of approximately $6-million, compared with $11-million in the revised guidance. The change in estimated Cascadura development well on-line dates noted above primarily resulted in the $5-million (45-per-cent) decrease from the prior estimate.
• Capital expenditures: Based on the anticipated reduction in funds flow from operations, the company has elected to defer the drilling of two WD-8 crude oil development wells. This results in a $3-million decrease in capital spending, partially offset by a $1-million increase in Cascadura-4ST2X costs, for total estimated 2025 capital expenditures of $26-million, representing a $2-million reduction from the $28-million contemplated in the revised guidance.
• Net debt: Reflecting the anticipated decrease in funds flow from operations and the revised capital program, Touchstone expects to exit 2025 with net debt of approximately $65-million, representing an increase of $1-million (2 per cent) from the $64-million disclosed in the revised guidance.

For further details regarding the company's revised guidance and the related advisories (which are incorporated by reference herein), please refer to the company's news release dated Aug. 14, 2025, available on the company's profile on SEDAR+ and on the company's website.

About Touchstone Exploration Inc.

Touchstone Exploration is a company based in Calgary, Alta., 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 TSX and the AIM of the London Stock Exchange under the symbol TXP.

Currency

Unless otherwise stated, all financial amounts referenced herein are expressed in British pounds. For reference purposes only, one British pound has been translated into U.S. dollars at a rate of one British pound to $1.40 (U.S.) and one British pound has been translated into Canadian dollars at a rate of one British pound to $1.87 (Canadian).

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