TXP MDA December 31 2019 FINAL

Touchstone Exploration Inc.
Management’s Discussion and Analysis
December 31, 2019
TSX / LSE: TXP

Management’s Discussion and Analysis
As at and for the three months and years ended December 31, 2019 and 2018
This Management’s Discussion and Analysis ("MD&A") of the financial condition and results of operations
of Touchstone Exploration Inc. ("Touchstone", "we", "our", "us" or the "Company") for the three months
and year ended December 31, 2019 with comparisons to the three months and year ended December 31,
2018 is dated March 25, 2020 and should be read in conjunction with the Company’s audited
consolidated financial statements as at and for the years ended December 31, 2019 and 2018. The
audited consolidated financial statements have been prepared in accordance with International Financial
Reporting Standards ("IFRS" or "GAAP") as issued by the International Accounting Standards Board.
Additional information related to Touchstone and factors that could affect the Company’s operations and
financial results are included with reports on file with the Canadian securities regulatory authorities,
including the Company’s 2019 Annual Information Form dated March 25, 2020, which can be found on
the Company’s SEDAR profile (www.sedar.com).
Unless otherwise stated, all financial amounts presented herein are rounded to thousands of United
States dollars ("$" or "US$") as further described in the section titled "Changes to Accounting Policies" in
this MD&A. The Company may also reference Canadian dollars ("C$") and Trinidad and Tobago dollars
("TT$") herein, which are the functional and operational currencies of the Company’s parent company and
operating subsidiaries, respectively. All production volumes disclosed herein are sales volumes and are
based on Company working interest before royalty burdens. Certain prior year amounts have been
reclassified to conform to current year presentation.
This MD&A contains forward-looking statements and non-GAAP measures. Readers are cautioned that
the MD&A should be read in conjunction with Touchstone’s disclosure under the sections titled "Forward-
looking Statements", "Non-GAAP Measures", and "Abbreviations" included in this MD&A.
About Touchstone Exploration Inc.
Touchstone is incorporated under the laws of Alberta, Canada with its head office located in Calgary,
Alberta. The Company is an oil and gas exploration and production company active in the Republic of
Trinidad and Tobago ("Trinidad"). Touchstone is one of the largest independent onshore oil producers in
Trinidad, with assets in several large, high-quality reservoirs that have significant internally estimated total
petroleum initially-in-place and an extensive inventory of low-risk development opportunities. The
Company’s common shares are traded on the Toronto Stock Exchange and the AIM market of the
London Stock Exchange under the symbol "TXP".
Touchstone’s strategy is to leverage Canadian experience and capability to international onshore

properties to create shareholder value. Outside of its core Trinidad portfolio, the Company will continue to
examine opportunities in jurisdictions that have stable political and fiscal regimes coupled with large
defined original oil and gas in place.
Touchstone Exploration Inc. 2

2019 Management’s Discussion & Analysis
Financial and Operating Results Summary
Three months ended Year ended

% %
December 31, change
December 31, change
2019 2018 2019 2018
Operating Highlights
Average daily oil production (bbls/d) 1,690 1,851 (9) 1,825 1,718 6
Net wells drilled 0.8 3.0 (73) 1.6 11.0 (85)
Brent benchmark price ($/bbl) 63.17 68.76 (8) 64.28 71.31 (10)
Operating netback(1) ($/bbl)
Realized sales price 57.38 58.54 (2) 58.01 60.15 (4)
Royalties (17.05) (14.81) 15 (16.49) (16.16) 2
Operating expenses (15.21) (21.18) (28) (14.91) (17.31) (14)
25.12 22.55 11 26.61 26.68 -
Financial Highlights
($000’s except as indicated)
Petroleum sales 8,920 9,970 (11) 38,654 37,729 2

Cash flow from operating activities 2,090 1,810 15 5,454 6,331 (14)
Funds flow from operations(2) 2,018 1,482 36 6,840 8,548 (20)
Per share – basic and diluted(1)(2) 0.01 0.01 - 0.04 0.07 (43)
Net (loss) earnings (3,549) 552 n/a (5,620) 358 n/a
Per share – basic and diluted (0.02) 0.00 n/a (0.04) 0.00 n/a
Exploration capital expenditures 5,838 1,603 264 10,113 2,557 296
Development capital expenditures 157 4,773 (97) 1,388 14,606 (90)
Total capital expenditures 5,995 6,376 (6) 11,501 17,163 (33)
Working capital deficit 1,139 3,318 (66)
Principal balance of term loan 15,364 11,004 40
Net debt(1) – end of period 16,503 14,322 15
Share Information (000’s)
Weighted average shares
160,691 129,021 25 155,830 129,021 21
outstanding – basic
Weighted average shares
160,691 130,532 23 155,830 130,220 20
outstanding – diluted
Outstanding shares – end of period 160,703 129,021 25
Notes:
(1) Non-GAAP financial measure that does not have a standardized meaning prescribed by IFRS and therefore may not be comparable with the
calculation of similar measures presented by other companies. See "Non-GAAP Measures" for further information.
(2) Additional GAAP term included in the Company’s consolidated statements of cash flows. Funds flow from operations represents net earnings
(loss) excluding non-cash items. See "Non-GAAP Measures" for further information.
Operating results
Throughout 2019, Touchstone conducted minimal capital development activity and continued to allocate
capital to exploration activities on our Ortoire property. As a result, crude oil production during the fourth
quarter averaged 1,690 bbls/d, a 9% decrease relative to the 1,851 bbls/d produced in the fourth quarter
of 2018, as incremental production achieved from wells drilled in 2018 were offset by natural declines.
2019 crude oil production averaged 1,825 barrels per day, representing an increase of 6% from
production delivered in 2018. We invested $1,388,000 in development activities in 2019, which mainly
consisted of recompletion activities on legacy wellbores.
We commenced our onshore exploration program on the Ortoire block (80% working interest) in the
second half of 2019, drilling two gross exploration wells (1.6 net). Coho-1, the first natural gas prospect,

had an encouraging production test that exceeded the Company’s expectations. Touchstone completed
drilling its second Ortoire exploration prospect, Cascadura-1ST1, in December 2019, with production
testing in February and March 2020 confirming a substantial liquids-rich gas discovery. In aggregate, we
invested $10,113,000 in exploration activities, including $8,901,000 in drilling, completion and lease
building activities (2018 - $2,557,000 and $nil, respectively).
Financial results
Despite an 8% decrease in average Brent reference pricing, our fourth quarter operating netback was
$25.12 per barrel, representing an 11% increase from the $22.55 per barrel operating netback achieved
in the equivalent prior year period. Realized fourth quarter 2019 crude oil pricing was $57.38 per barrel,
2% less than the $58.54 per barrel received in the fourth quarter of 2018 as the Company’s realized
pricing differential to Brent reference pricing narrowed significantly. 2019 fourth quarter royalties
represented 29.7% of petroleum sales compared to 25.3% in the prior year comparative period. This
reflected an increase in overriding royalties, as production from development wells drilled in 2017 and
2018 qualified for reduced royalty rates throughout 2018. In comparison to the fourth quarter of 2018,
operating expenses on a per barrel basis decreased 28% to $15.21 per barrel, predominately due to
decreased well servicing expenditures and licence fees. On an annual basis, our 2019 operating netback
of $26.61 per barrel was consistent with the $26.68 recorded in the prior year. Despite a 10% decrease in
average Brent reference pricing, the Company realized $58.01 per barrel, a 4% decrease from the $60.15
per barrel recognized in 2018. In comparison to 2018, 2019 royalties per barrel increased by 2% while
operating costs per barrel decreased by 14%, reflecting the Company's 2019 cost control efforts.
For the three months and year ended December 31, 2019, Touchstone delivered funds flow from
operations of $2,018,000 ($0.01 per share) and $6,840,000 ($0.04 per share), respectively. Fourth
quarter 2019 funds flow from operations increased by $536,000 from the $1,482,000 recorded in the
corresponding 2018 period, reflecting savings in cash finance expenses from the reversal of previously
accrued income tax interest expenses, slightly offset by increased income tax expenses recorded in
2019. 2019 funds flow from operations were $1,708,000 less than the $8,548,000 recognized in 2018.
Annual savings in operating costs and cash finance expenses were offset by an increase of $3,513,000 in
current income taxes. Fourth quarter and annual 2019 income taxes increased based on minimal capital
development activity, which decreased credits used to offset supplemental petroleum taxes.
We recorded net losses of $3,549,000 ($0.02 per share) and $5,620,000 ($0.04 per share) during the
three months and year ended December 31, 2019, respectively, in comparison to net earnings of
$552,000 ($0.00 per share) and $358,000 ($0.00 per share) in the comparative 2018 periods,
respectively. The annual variances were driven by property and equipment impairments, as $7,594,000 in
impairments were recorded in the fourth quarter of 2019 versus impairment reversals of $3,719,000
recognized in the fourth quarter of 2018. The impairment expenses were minimized by their
corresponding effect on deferred taxes, as recoveries of $3,945,000 and $1,813,000 were recognized
during the three months and year ended December 31, 2019 (2018 – expenses of $3,228,000 and
$6,897,000).
Touchstone exited the year with a cash balance of $6,182,000, a working capital deficit of $1,139,000 and
a C$20 million principal term loan balance. Net debt as at December 31, 2019 was $16,503,000, which
represented net debt to annual 2019 funds flow from operations of 2.4 times. In the fourth quarter of
2019, we increased the principal balance of our credit facility from C$15 million to C$20 million in order to
fund the Cascadura-1ST1 exploration well. The credit facility does not require the commencement of
principal payments until January 1, 2021, and we were within the financial covenants as at December 31,
2019.
Subsequent events and outlook
On the basis of the successful results from the first two Ortoire exploration wells, the Company undertook
a private placement in February 2020 in order to support the drilling of a further Ortoire exploration well at
the Chinook prospect, which is targeting a separate structure along the same geological trend. The

private placement raised net proceeds of approximately $10.8 million by way of a placing of 22,500,000
common shares at a price of 40 pence (approximately C$0.69). The net proceeds of the equity issuance
are also expected to be used to complete the second stage of the Cascadura-1ST1 production test and
provide additional working capital while we progress the Ortoire exploration program.
With the significant drop and volatility in financial markets and world crude oil prices as a result of the
novel coronavirus ("COVID-19") pandemic and concurrent oil market share war, consistent with past
practices the Company will manage its development and operational spending. Our emphasis remains on
bringing Coho-1 and Cascadura-1ST1 on stream. We are preparing to drill an earning exploration well at
the Chinook prospect and anticipate continuing with the planned exploration program unless it becomes
absolutely necessary to suspend it.
The Company's response to these events will be to continue its approach of maintaining prudence and
financial flexibility with a focus on preserving value and financial liquidity. Our low base production decline
rate, strong operating netbacks, top-tier capital efficiencies, lack of development drilling commitments and
solely operated exploration capital program provide flexibility in this volatile market. Efforts have been
initiated to optimize operations in order to minimize discretionary costs, with field operations limited to
emergency workovers. All operations will be thoroughly vetted to optimize corporate cash flows which
may include shutting in any wells that will not generate positive cash flow under current forward crude oil
prices. Further operating and corporate cost efficiencies will also be pursued in consideration of the
current pricing environment. Aside from voluntarily restricting field operations, the Company has had no
operational impacts from COVID-19 to date; we have not been subject to supply chain disruptions nor the
unavailability of personnel.
Management’s main concern is the safety and wellbeing of its employees and stakeholders. International
travel has been restricted, and remote working and physical distancing measures have been
implemented where possible to allow our operations to continue as smoothly as possible in the
circumstances.
Bolstered by the recent private placement, the Company had approximately $13.5 million of cash as at
February 29, 2020, and no repayments are required on the Company’s debt until January 2021. We
remain focused on managing our operations to ensure that we operate within our credit facility financial
covenants.
We continue to monitor the situation and economic environment, and we will adapt our business
operations to ensure that we preserve and grow long-term shareholder value. We thank our shareholders
and stakeholders for their continuing support and look forward to coming out of this unprecedented
challenge with a stronger and sustainable Company.

Principal Properties
The Company holds interests in producing and exploration properties in southern Trinidad and minimal
undeveloped acreage in Saskatchewan, Canada. All properties are operated by Touchstone apart from
the Cory Moruga exploration block. A full schedule of the Company’s Trinidad property interests as of
December 31, 2019 is set forth below.
Working
Property Lease type Gross acres(1) Net acres(2)
interest
Producing
Coora 1 100% Lease Operatorship 1,230 1,230
Coora 2 100% Lease Operatorship 469 469
WD-4 100% Lease Operatorship 700 700
WD-8 100% Lease Operatorship 650 650
New Dome 100% Farmout Agreement 69 69
South Palo Seco 100% Farmout Agreement 2,167 2,167
Barrackpore 100% Private 211 211
Fyzabad 100% Crown 94 94
Fyzabad 100% Private 470 470
Palo Seco 100% Crown 499 499
San Francique 100% Private 1,277 1,277
100% 7,836 7,836
Exploratory
Bovallius 100% Private 827 827
Cory Moruga 16% Crown 7,443 1,206
East Brighton 70% Crown 20,588 14,412
Moruga 100% Private 1,416 1,416
New Grant 100% Private 193 193
Ortoire 80% Crown 44,731 35,785
Rousillac 100% Private 235 235
Siparia 50% Private 111 56
St. John 100% Private 167 167
72% 75,711 54,297
Total 74% 83,547 62,133
Notes:
(1) "Gross" means acres in which the Company has an interest.
(2) "Net" means the Company’s interest in the gross acres.
Operating Agreements
The Petroleum Company of Trinidad and Tobago ("Petrotrin") ceased operations on November 30, 2018,
and assets related to the exploration and production operations of Petrotrin were transferred to its
affiliate, Heritage Petroleum Company Limited ("Heritage"). Included in the assets which are now owned
by Heritage are the Company’s four lease operatorship agreements ("LOAs") and two farmout
agreements ("FOAs"). As a result, Heritage has replaced Petrotrin in the LOAs and FOAs, including the
rights and obligations of Petrotrin contained therein.
In addition to LOAs and FOAs governed by Heritage, the Company operates under state exploration and
production licences with the Trinidad and Tobago Minister of Energy and Energy Industries ("MEEI") and
private exploration and production agreements with individual landowners.
Lease operatorship agreements
The Company’s LOAs governing its four core properties (Coora 1, Coora 2, WD-4 and WD-8) with
Heritage expire on December 31, 2020, with the Company holding five-year renewal options upon
reaching agreements regarding the proposed work programs and financial obligations. The practice in
Trinidad is for extensions to be issued in most cases on terms substantially similar to those in effect at the

time. Presently, the Company is subject to annual minimum production levels and five-year minimum
work commitments from 2016 through 2020. Under the LOAs, failing to reach minimum production levels
does not constitute a breach provided the minimum work obligations have been completed.
As of December 31, 2019, the Company satisfied all of its minimum work obligations stipulated in its
LOAs through December 31, 2020, which included drilling 10 wells and performing 11 well recompletions.
Farmout agreements
The Company’s FOAs governing its New Dome and South Palo Seco properties with Heritage expire on
December 31, 2021. The Company holds a five-year renewal option, and the agreements are currently
subject to five-year minimum work commitments from 2017 through 2021.
As of December 31, 2019, the Company satisfied all of its minimum work obligations stipulated in its New
Dome FOA through December 31, 2021, which included performing three well recompletions. The South
Palo Seco FOA requires drilling two development wells and performing four well recompletions. Wells
scheduled to be drilled in 2018 and 2019 remain outstanding (see "Contractual Obligations, Commitments
and Guarantees" for further details). The South Palo Seco property is considered non-core as it
represented 0.2% of total Company crude oil production during the year ended December 31, 2019 (2018
- 0.4%) and 0.01% of proved plus probable reserves at December 31, 2019 (2018 - 0.01%).
MEEI exploration and production licences
The Company has exploration and production licences with the MEEI for its Fyzabad and Palo Seco
producing properties and its Cory Moruga, East Brighton and Ortoire exploration properties. The licences
typically are for an initial six-year term, with the option to extend a further 19 years upon a commercial
discovery. Under its East Brighton and Ortoire licences, the Company is subject to work commitments
through 2020 (see the "Contractual Obligations, Commitments and Guarantees" section for further
details).
The Company’s Fyzabad and Palo Seco agreements with the MEEI contain no major work obligations or
covenants. The Palo Seco licence expired on August 19, 2013, and Touchstone is currently negotiating a
renewal or an extension. The Company has permission from the MEEI to operate in the interim period.
The Company has no indication that the licence will not be renewed. The Palo Seco property is also
considered non-core as it represented 0.6% of total Company crude oil production during the year ended
December 31, 2019 (2018 - 0.7%) and 0.09% of proved plus probable reserves at December 31, 2019
(2018 - 1.05%).
Private lease agreements
Touchstone also negotiates private lease agreements with individual landowners. Lease terms are
typically 35 years in duration and contain no minimum work obligations. The Company is operating under
a number of Trinidad private lease agreements which have expired and are currently being renewed.
Based on legal opinions received, Touchstone is continuing to recognize petroleum sales on the
producing properties because the Company is the operator, is paying all associated royalties and taxes,
and no title to the producing properties have been disputed. The Company currently has no indication that
any of the producing expired leases will not be renewed. The continuation of production from expired
private leases during the renegotiation process is common in Trinidad based on antiquated land title
processes. During the year ended December 31, 2019, production volumes produced under expired
private lease agreements represented 1.8% of total Company production (2018 – 2.4%).
Crude oil marketing agreement
On January 14, 1974, Premier Consolidated Oilfields Limited, the Company’s predecessor in interest, and
Texaco Trinidad Inc., Petrotrin’s predecessor, entered into a Crude Oil Purchase Agreement whereby
Petrotrin committed to purchase all petroleum crude oil produced by Primera Oil and Gas Limited from

various producing properties operating under MEEI licences and private lease agreements. The
agreement, as amended from time to time, has continued to have an indefinite term and may be
terminated by either party upon three months’ notice. The price currently paid is the Trinidad equity land
blend indexed price, payable in US$. This agreement was transferred to Heritage on December 1, 2018,
and to date the Company has collected all payments from Heritage in a timely manner.
Results of Operations
Financial highlights

($000’s except for per share % %
amounts)
December 31, change
December 31, change
2019 2018 2019 2018
Net (loss) earnings (3,549) 552 n/a (5,620) 358 n/a
Per share – basic and
(0.02) 0.00 n/a (0.04) 0.00 n/a
diluted
Cash flow from operating
2,090 1,810 15 5,454 6,331 (14)
activities
Funds flow from
2,018 1,482 36 6,840 8,548 (20)
operations(1)
Per share – basic and
0.01 0.01 - 0.04 0.07 (43)
diluted(2)
Notes:
Net (loss) earnings
During the three months ended December 31, 2019, the Company recognized a net loss of $3,549,000
($0.02 per share) versus net earnings of $552,000 ($0.00 per share) generated in the prior year
equivalent quarter. In the fourth quarter of 2019, Touchstone recorded property and equipment
impairment charges of $7,594,000 in comparison to net property and equipment impairment reversals of
$3,719,000 recognized in the 2018 equivalent quarter. The increased impairment charges were partially
offset by their effect on deferred income taxes, as a recovery of $3,945,000 was recognized in the fourth
quarter of 2019 versus a deferred expense of $3,228,000 in the corresponding 2018 period.
Touchstone recorded a net loss of $5,620,000 ($0.04 per share) during the year ended December 31,
2019 versus net earnings of $358,000 ($0.00 per share) recognized in 2018. The variance was
predominately from the aforementioned 2019 increase in impairment charges net of deferred income tax,
as well as a year-over-year decease in funds flow from operations of $1,708,000.

Details of the change in net loss from the three months and year ended December 31, 2018 to the three
months and year ended December 31, 2019 are included in the table below.
Three months
Year ended
($000’s) ended
December 31
December 31
Net earnings - 2018 552 358
Sales volume variance (870) 2,350
Realized price variance (180) (1,425)
Royalties (127) (853)
Other income 55 (303)
Expenses
Operating 1,243 922
General and administrative 35 (6)
Cash finance 1,173 1,092
Current income tax (689) (3,513)
Realized foreign exchange (55) (45)
Total cash variances 585 (1,781)
Non-cash loss on financial derivatives (118) (18)
Gain on asset dispositions (228) (228)
Unrealized foreign exchange (90) (422)
Share-based compensation (16) (51)
Depletion and depreciation (161) (1,055)
Impairment (11,362) (11,169)
Loss on decommissioning liabilities - 9
Non-cash finance expenses 116 27
Deferred income taxes 7,173 8,710
Total non-cash variances (4,686) (4,197)
Net loss - 2019 (3,549) (5,620)
Cash flow from operating activities and funds flow from operations
Touchstone delivered fourth quarter 2019 cash flow from operating activities of $2,090,000, representing
an increase of $280,000 from $1,810,000 in cash flow generated from operating activities in the prior year
equivalent quarter. The variance relative to the prior year period was a result of an increase in $536,000
in funds flow from operations, offset by a $256,000 decrease in changes in non-cash working capital.
For the year ended December 31, 2019, cash provided by operations decreased $877,000 from 2018.
Relative to 2018, a year-over-year increase in non-cash working capital of $849,000 was offset by a
decrease in funds flow from operations of $1,708,000 and an $18,000 increase in costs related to
derivative option purchases.
During the three months ended December 31, 2019, the Company generated funds flow from operations
of $2,018,000, a 36% increase from funds flow recorded in the fourth quarter of 2018. The $536,000
annual increase reflected savings in cash finance expenses from the reversal of previously accrued
income tax interest expenses, slightly offset by increased income tax expense recorded in 2019.
For the year ended December 31, 2019, the Company generated funds flow from operations of
$6,840,000, representing a 20% decrease relative to the $8,548,000 recognized in 2018. Compared to
2018, annual savings in operating costs and cash finance expenses were offset by an increase of
$3,513,000 in current income tax expenses. Fourth quarter and annual 2019 income taxes increased
based on minimal capital development activity, which decreased investment tax credits that offset
supplemental petroleum taxes.

Details of the change in funds flow from operations from the three months and year ended December 31,
2018 to the three months and year ended December 31, 2019 are reflected in the following table.
Three months
Year ended
($000’s) ended
December 31
December 31
Funds flow from operations – 2018(1) 1,482 8,548
Sales volume variance (870) 2,350
Realized price variance (180) (1,425)
Royalties (127) (853)
Other income 55 (303)
Expenses
Operating 1,243 922
General and administrative 35 (6)
Cash finance 1,173 1,092
Current income tax (689) (3,513)
Realized foreign exchange (55) (45)
Change in non-cash other (49) (2)
Decommissioning expenditures - 75
Funds flow from operations – 2019(1) 2,018 6,840
Note:
Net (loss) earnings and funds flow from operations sensitivity
The following table illustrates sensitivities of operating items to operational and business environment
changes and the resulting estimated impact to net earnings and funds flow from operations for the year
ended December 31, 2019.
Impact on Impact on
annual net annual funds
Assumption(2) Change earnings flow from
(loss)(1) operations(1)
($000’s) ($000’s)
Average realized price ($/bbl) 58.01 10% 1,089 2,157
Average production volumes (bbls/d) 1,825 10% 833 1,660
Operating expenses ($/bbl) 14.91 10% (489) (950)
Notes:
(1) Calculations are estimates, are performed independently and will not be indicative of actual results that would occur when multiple variables
change concurrently. Calculations are performed prior to the impact of commodity price financial derivatives.
(2) Assumptions are indicative of actual prices and volumes realized and actual results for the year ended December 31, 2019.
Production volumes

% %
December 31, change
December 31, change
2019 2018 2019 2018
Oil production (bbls) 155,454 170,320 (9) 666,277 627,209 6
Average daily oil
1,690 1,851 (9) 1,825 1,718 6
production (bbls/d)
Fourth quarter 2019 crude oil sales decreased 9% compared to the prior year equivalent period, as
incremental production from the wells drilled in 2018 were offset by natural declines.

2019 annual crude oil production increased 6% from 2018 based on a full year of production gains
achieved from the Company’s 2018 developmental drilling efforts, offset by natural declines. Incremental
2019 production from wells drilled in 2018 contributed approximately 470 bbls/d, versus 198 bbls/d in
2018.
The following table summarizes crude oil production by property during the three months and years
ended December 31, 2019 and 2018.

% %
(bbls) December 31, change
December 31, change
2019 2018 2019 2018
Coora 1 41,498 44,549 (7) 149,737 147,368 2
Coora 2 4,856 7,024 (31) 24,097 26,150 (8)
WD-4 56,111 61,669 (9) 233,211 224,086 4
WD-8 32,793 28,671 14 170,591 113,454 50
New Dome 2,254 2,336 (4) 9,131 9,352 (2)
South Palo Seco 145 620 (77) 1,444 2,536 (43)
Barrackpore 1,490 4,847 (69) 5,529 18,201 (70)
Fyzabad 8,723 10,492 (17) 38,866 49,316 (21)
Icacos(1) - 718 (100) - 3,827 (100)
Palo Seco 1,082 1,276 (15) 3,776 4,886 (23)
San Francique 6,502 8,118 (20) 29,895 28,033 7
Production 155,454 170,320 (9) 666,277 627,209 6
Note:
(1) The Icacos property was sold on December 22, 2018. See "Capital Expenditures and Dispositions: Property disposition" for further details.
Realized crude oil pricing (excluding derivative contracts)

% %
December 31, change
December 31, change
2019 2018 2019 2018
Average crude oil benchmark prices(1)
Brent ($/bbl) 63.17 68.76 (8) 64.28 71.31 (10)
WTI ($/bbl) 56.96 59.34 (4) 57.03 64.90 (12)
Avg. realized price ($/bbl) 57.38 58.54 (2) 58.01 60.15 (4)
Realized price discount
(9.2) (14.9) (9.8) (15.6)
as a % of Brent
Realized price premium
0.7 (1.3) 1.7 (7.3)
(discount) as a % of WTI
Note:
(1) Source: US Energy Information Administration. Benchmark prices do not reflect the Company’s realized sales prices.
The Company’s crude oil price received is based on quality differentials and international marketing
arrangements and therefore are attributed to factors that are beyond the Company’s control.
Touchstone's crude oil realized price has historically correlated to the Brent benchmark price. Relative to
the fourth quarter of 2018, the Brent reference pricing differential during the fourth quarter of 2019
narrowed from 14.9% to 9.2%. Similarly, the Brent reference price differential realized during the year
ended December 31, 2019 narrowed to 9.8% versus 15.6% in the 2018 year. The decrease is reflective
of the closing of the Petrotrin refinery in November 2018.
The Company realized an average price of $57.38 per barrel in the fourth quarter of 2019 compared to an
average of $58.54 per barrel in the comparative period of 2018. The 2% decrease resulted from an 8%
decrease in the Brent reference price, partially offset by a 6% narrowing of the realized Brent reference
differential.

On an annual basis, the Company’s 2019 average realized price of $58.01 per barrel was 4% weaker
than the $60.15 price received in 2018. The annual decline reflected a 10% decrease in the average
Brent reference price, offset by a 6% narrowing of the realized differential to Brent.
Petroleum sales

% %
($000’s) December 31, December 31,
change change
2019 2018 2019 2018
Petroleum sales 8,920 9,970 (11) 38,654 37,729 2
The Company recognized petroleum sales of $8,920,000 during the three months ended December 31,
2019 versus $9,970,000 recorded in the prior year comparative quarter. $870,000 of the $1,050,000 inter-
period variance was a result of decreased production with the remaining $180,000 variance due to a
reduction in realized pricing.
Touchstone’s 2019 petroleum sales were $38,654,000, representing a $925,000 or 2% increase from the
$37,729,000 recognized in 2018. A difference of $2,350,000 was attributed to increased 2019 production,
partially offset by a negative realized price variance of $1,425,000.
Touchstone sells all of its crude oil to Heritage, with title transferring at the Company’s various sales
batteries. As at December 31, 2019, the Company held 4,166 barrels of crude oil inventory versus 7,559
barrels held as at December 31, 2018.
Commodity price financial derivatives
The Company may enter into crude oil financial derivative contracts to protect funds flow from operations
from the volatility of commodity prices. Touchstone’s strategy focuses on the use of puts, costless collars,
swaps or fixed price contracts to limit exposure to fluctuations in commodity prices while allowing for
participation in commodity price increases. Touchstone does not employ hedge accounting for any of its
risk management contracts.
In April 2019, the Company purchased put option contracts for 800 bbls/d at a strike price of Brent $56.10
per barrel from June 1, 2019 to December 31, 2019. The put options were purchased from a financial
institution for an upfront cash premium of $171,000. The monthly settled options expired out of the money
throughout 2019, resulting in derivative losses of $118,000 and $171,000 recorded during the three
months and year ended December 31, 2019, respectively (2018 - $nil and $153,000). For further
information, refer to the "Risk Management" section of this MD&A.
Other income
The Company recorded $55,000 of other income during the year ended December 31, 2019, which was
mainly comprised of fees received for selling crude oil on behalf of a third-party operator, and proceeds
received from the sale of used inventory and equipment. During the year ended December 31, 2018, the
Company sold a licenced 3D seismic copy of the Luseland, Saskatchewan area to a third-party broker for
proceeds of $375,000.

Operating netback
The components of operating netback for the three months and years ended December 31, 2019 and
2018 are set forth below.
% %
December 31, change
December 31, change
2019 2018 2019 2018
($000’s)
Petroleum sales(1) 8,920 9,970 (11) 38,654 37,729 2
Royalties (2,650) (2,523) 5 (10,986) (10,133) 8
Operating expenses (2,364) (3,607) (34) (9,936) (10,858) (8)
Operating netback(2) 3,906 3,840 2 17,732 16,738 6
($/bbl)
Brent benchmark price 63.17 68.76 (8) 64.28 71.31 (10)
Discount (5.79) (10.22) (6.27) (11.16)
Realized sales price 57.38 58.54 (2) 58.01 60.15 (4)
Royalties (17.05) (14.81) 15 (16.49) (16.16) 2
Operating expenses (15.21) (21.18) (28) (14.91) (17.31) (14)
Operating netback(2) 25.12 22.55 11 26.61 26.68 -
Notes:
(1) Excludes other income.
Royalties

($000’s unless otherwise % %
stated)
December 31, change
December 31, change
2019 2018 2019 2018
Crown royalties 1,102 1,078 4,440 4,021
Private royalties 86 68 398 497
Overriding royalties 1,462 1,377 6,148 5,615
Royalties 2,650 2,523 5 10,986 10,133 8
As a % of petroleum
29.7% 25.3% 17 28.4% 26.9% 6
sales
Touchstone is obligated to pay a crown royalty rate of 12.5% on crude oil production under MEEI and
Heritage licences. For private leases, the Company incurs private royalties between 10% and 12.5% of
petroleum sales. On the WD-8, Coora and WD-4 blocks, the Company operates under LOAs, which in
addition to crown royalties apply a sliding scale notional overriding royalty ("ORR") that ranges from 10%
to 35% on predefined monthly base production levels. For any production volumes sold in excess of base
production levels, the Company incurs an enhanced ORR ("enhanced ORR") of 8% to 22.5%. The ORR
and enhanced ORR rates are indexed to the average price of oil realized in the production month. The
LOAs allow for ORR and enhanced ORR incentives for the drilling or sidetracking of a replacement well
as follows:
• Year 1 of production from the new/replacement well: 0% ORR or enhanced ORR rate; and
• Year 2 of production from the new/replacement well: 10% ORR or enhanced ORR rate.
In addition to crown royalties, the South Palo Seco and New Dome blocks FOAs stipulate ORR rates
ranging from 7% to 27% and enhanced ORR rates ranging from 4% to 17%. Similar to the LOA structure,
the ORR and enhanced ORR rates are indexed to the average price of oil realized in a production month.
There are no incentives for drilling under the FOAs.

2019 fourth quarter royalties represented 29.7% of petroleum sales or $17.05 per barrel compared to
25.3% or $14.81 per barrel in the prior year comparative period. The variances were primarily a result of
an increase in overriding royalties, as production from wells drilled in 2018 did not incur overriding
royalties in the prior year fourth quarter.
For the year ended December 31, 2019, royalties represented 28.4% of petroleum sales or $16.49 per
barrel as compared to 26.9% or $16.16 per barrel in 2018. The annual increases were primarily reflective
of decreased crude oil production that qualified for enhanced ORR incentives in 2019, as Touchstone did
perform developmental drilling activities in 2019.
Operating expenses

% %
change change
2019 2018 2019 2018
Operating expenses 2,364 3,607 (34) 9,936 10,858 (8)
The Company’s fourth quarter operating expenses were $2,364,000, representing $15.21 per barrel. In
comparison to the fourth quarter of 2018, current period operating expenses decreased by $1,243,000 or
28% on a per barrel basis from the $21.18 per barrel incurred in 2018. In the fourth quarter of 2018, the
Company recorded a one-time licence fee adjustment of $393,000 relating to a legacy licence renewal.
Further, the Company reduced well servicing costs and recorded decreased variable operating costs
based on a decline of production in the fourth quarter of 2019 compared to the equivalent 2018 period.
On an annual basis, 2019 operating expenses were $9,936,000 or $14.91 per barrel compared to
$10,858,000 or $17.31 per barrel incurred in 2018. The year-over-year decrease was reflective of the
aforementioned licence fee adjustment recorded in 2018, decreases in well services costs, and a
reduction of approximately $348,000 in service rig and vehicle costs formerly recognized as operating
expenses. These costs are now reclassified as interest expenses and repayments of lease liabilities
following the Company’s January 1, 2019 adoption of IFRS 16 Leases ("IFRS 16") (refer to "Changes to
Accounting Polices"). 2019 cost reductions were slightly offset by increased fixed salaries and increased
variable lifting and transportation costs associated with increased 2019 production.
General and administrative expenses ("G&A")

stated)
December 31, change
December 31, change
2019 2018 2019 2018
Gross G&A 2,115 2,228 (5) 6,854 7,017 (2)
Capitalized G&A (310) (388) (20) (919) (1,088) (16)
G&A expenses 1,805 1,840 (2) 5,935 5,929 -
On a per barrel basis 11.61 10.80 7 8.91 9.45 (6)
Fourth quarter and annual 2019 G&A expenses remained consistent with the prior year, as decreases in
capitalized G&A were partially offset by reductions in head office rent and office equipment costs which
are now classified as repayment of lease liabilities following the Company’s adoption of IFRS 16 (refer to
"Changes to Accounting Policies").

Net finance expenses

% %
($000's) December 31, change
December 31, change
2019 2018 2019 2018
Interest income (8) (42) (81) (96) (177) (46)
Term loan interest
279 228 22 954 923 3
expense
Term loan revaluation
(379) - n/a (656) (219) 100
gain
Production payment
452 289 56 622 341 82
liability revaluation loss
Accretion on term loan 153 74 100 384 301 28
Accretion on decom.
97 67 45 372 262 42
liabilities
Lease liability interest
7 - n/a 69 - n/a
expense
Reversal of accrued
(1,265) - n/a (1,286) - n/a
income tax interest
Other (9) - n/a (47) 4 n/a
Net finance (income)
(673) 616 n/a 316 1,435 (78)
expenses
Cash finance (income)
(987) 186 n/a (342) 750 n/a
expenses
Non-cash finance
314 430 (27) 658 685 (4)
expenses
Net finance (income)
(673) 616 n/a 316 1,435 (78)
expenses
Interest income included interest earned from funds on deposit and interest generated from a finance
lease (refer to "Liquidity and Capital Resources - Finance lease").
Term loan interest expenses increased in the fourth quarter of 2019 and on annual basis from 2018 as
the Company raised the principal balance of its term loan credit facility from C$15 million to C$20 million
effective October 31, 2019 (see "Liquidity and Capital Resources - Term loan").
Term loan revaluation gains represented the impact of revaluations of the Company’s term credit facility
that was initially extended by one year in June 2018 and further extended by another year in March 2019.
An additional term loan revaluation gain of $379,000 was recorded in the fourth quarter of 2019 based on
the Company’s C$5 million principal increase of the term loan. The term credit facility principal expansion
also served to increase related term loan accretion in the fourth quarter of 2019, as the discounted term
loan balance is unwound using the effective interest rate method to the principal value at maturity.
Production payment liability revaluation losses were a result of increased production payment liabilities
estimated by the Company at each reporting period. Concurrent with the 2018 and 2019 extensions of the
term credit facility, the related production payment liability due to the lender was also extended.
Additionally, in connection with the October 31, 2019 increase in principal, the production payment liability
increased from 1% to 1.33% of petroleum sales through October 2023. The estimated liability will
continue to vary in each reporting period based on changes to internally forecasted production and
forward commodity pricing.
Lease liability interest expenses were recognized in 2019 as a result of the adoption of IFRS 16 (refer to
"Liquidity and Capital Resources – Lease liabilities" and "Changes to Accounting Policies").
In 2019, The Trinidad and Tobago government introduced a tax amnesty relating to certain taxes,
including petroleum taxes and VAT, wherein historical interest was waived on outstanding balances paid

during the June through September 2019 period. As a result, $1,286,000 in previously accrued interest
was reversed based on principal payments made during the year ended December 31, 2019 (2018 - $nil)
(see "Income taxes" for further details).
Foreign exchange and foreign currency translation
The Company’s presentation currency is the United States dollar (refer to "Changes to Accounting
Policies"). The parent company has a Canadian dollar functional currency while its Trinidadian
subsidiaries have a Trinidad and Tobago dollar functional currency. In each reporting period, the change
in values of the C$ and TT$ relative to the US$ reporting currency are recognized. The applicable rates
used to translate the Company’s TT$ and C$ denominated items are summarized in the table below.

% %
December 31, change
December 31, change
2019 2018 2019 2018
Average foreign exchange rates(1)
US$:C$ 1.32 1.32 - 1.33 1.30 2
US$:TT$ 6.76 6.75 - 6.77 6.74 -
December 31, September 30, December 31, December 31,
2019 2019 2019 2018
Closing foreign exchange rates(1)
US$:C$ 1.30 1.32 (2) 1.30 1.36 (5)
US$:TT$ 6.75 6.78 - 6.75 6.80 (1)
Note:
(1) Source: Oanda Corporation average daily exchange rates for the specified periods and daily exchange rates for the specified dates.
The income and expenses of the Company’s Canadian head office and Trinidad operations are translated
to US$ at the average monthly exchange rates relative to the date of the transactions. Fluctuations in the
exchange rate between the TT$ and the US$ could have a significant effect on reported results, as the
sales prices of crude oil are determined by reference to US$ denominated benchmark prices and the
majority of the Company’s operating costs are denominated in TT$. This is currently mitigated by the fact
that the TT$ is informally pegged to the US$. The Company is also subject to foreign exchange exposure
relating to Canadian head office expenses and its term loan, which are denominated in C$. Any material
movements in the C$ to US$ exchange rate may have a material effect on the Company’s reporting
results. The Company also has foreign exchange exposure on costs denominated in pounds sterling
required to maintain its AIM listing.
During the fourth quarter of 2019, the C$ and the TT$ remained range bound to the US$, as the average
rates remained consistent with the corresponding rates observed in the 2018 fourth quarter. On an annual
basis, the Canadian dollar depreciated relative to the US$, with average rates approximately 2% less
than average 2018 foreign exchange rates, while the TT$ remained range bound throughout 2019. As a
result, the Company recorded foreign exchange losses of $15,000 and $147,000 during the three months
and year ended December 31, 2019, respectively (2018 – gains of $130,000 and $320,000). The majority
of the 2019 translation differences in each period were unrealized in nature and may be reversed in the
future as a result of fluctuations in prevailing exchange rates.
The assets and liabilities of the Company’s subsidiaries are translated to US$ dollars at the exchange
rate on the reporting period date for presentation purposes, with all resulting foreign currency differences
recorded in other comprehensive loss. As at December 31, 2019 compared to September 30, 2019, the
US$ was 2% weaker relative to the C$ and marginally weaker relative to the TT$. As a result, a foreign
currency translation gain of $3,000 was reported during the fourth quarter of 2019 (2018 – loss of
$89,000). In comparison to December 31, 2018, the US$ was 5% weaker relative to the C$ and
depreciated 1% relative to the TT$ as at December 31, 2019. Touchstone recognized a foreign currency
translation loss of $171,000 during the year ended December 31, 2019 (2018 - gain of $306,000).

Share-based compensation plans
The Company has a share option plan pursuant to which options to purchase common shares of the
Company may be granted by the Board of Directors to directors, officers, employees and consultants of
the Company. The exercise price of each option may not be less than the closing price of the common
shares prior to the date of grant. Compensation expense is recognized as the options vest. Unless
otherwise determined by the Board of Directors, vesting typically occurs one third on each of the next
three anniversaries of the grant date as recipients render continuous service to the Company, and the
share options typically expire five years from the date of the grant.
On April 5, 2019, the Company granted 2,550,000 share options to officers, directors and employees at
an exercise price of C$0.23 per option. The share options have a five-year term and vest one third on
each of the next three anniversaries of the grant date.
The Company also has an incentive share compensation plan which provides for the grant of incentive
share options to purchase common shares of the Company at a C$0.05 exercise price. A maximum of
one million common shares have been approved for issuance under this plan. Unless otherwise
determined by the Board of Directors, vesting typically occurs one third on each of the next three
anniversaries of the date of the grant, and the incentive share options typically expire five years from the
date of the grant. The Company is phasing out its incentive share compensation plan, as no awards have
been granted since June 2014 and no incentive share options were outstanding as at December 31,
2019.
At December 31, 2019, Touchstone had 8,740,600 share options outstanding, with a weighted average
exercise price of C$0.26 per share. The maximum number of common shares issuable on the exercise of
outstanding share options and incentive share options at any time is limited to 10% of the issued and
outstanding Company common shares. At December 31, 2019, share options and incentive share options
outstanding represented 5.4% of the Company’s outstanding common shares (2018 - 6.6%).
During the three months and year ended December 31, 2019, the Company recorded share-based
compensation expenses of $46,000 and $169,000 in relation to share option plans, respectively (2018 -
$30,000 and $118,000).
Depletion and depreciation expense

stated)
December 31, change
December 31, change
2019 2018 2019 2018
Depletion expense 1,114 1,090 2 4,557 3,981 14
On a per barrel basis 7.17 6.40 12 6.84 6.35 8
Depreciation expense 177 40 100 614 135 100
Depletion and
1,291 1,130 14 5,171 4,116 26
depreciation expense
The Company’s producing petroleum assets are subject to depletion expense. The net carrying value of
producing assets is depleted using the unit of production method by reference to the ratio of production in
the period over the related proven and probable reserves while also considering the estimated future
development costs necessary to bring those reserves into production. As at December 31, 2019,
$67,134,000 in future development costs were included in petroleum asset cost bases for depletion
calculation purposes (2018 - $68,644,000).
Assets in the exploration phase are not amortized. Depreciation expense is recorded based on corporate
assets in Canada on a declining balance basis. The right-of-use ("ROU") assets recognized upon the
Company’s adoption of IFRS 16 are depreciated over their estimated useful lives on a straight-line basis
(refer to "Changes to Accounting Policies").

For the three months and year ended December 31, 2019, per barrel depletion expenses increased by
12% and 8% in comparison to the comparative 2018 periods, respectively, reflecting expenses incurred in
the 2018 drilling campaign that increased 2019 net property and equipment carrying values.
In comparison to the fourth quarter and annual 2018 periods, depreciation expenses increased in each
2019 respective period as a result of the adoption of IFRS 16 which increased the Company’s property
and equipment balance by $1,194,000 on January 1, 2019 (refer to "Changes to Accounting Polices").
Impairment of non-financial assets
Entities are required to conduct impairment test where there is an indication of impairment or reversal of a
non-financial asset, and the test may be conducted for a cash-generating unit ("CGU") where an asset
does not generate cash inflows that are largely independent of those from other assets. Impairment is
recognized when the carrying value of an asset or group of assets exceeds its recoverable amount,
defined as the higher of its value in use or fair value less costs of disposal. Any asset impairment that is
recorded is recoverable to its original value less any associated depletion and depreciation expense
should there be indicators that the recoverable amount of the asset has increased in value since the time
of recording the initial impairment. Touchstone assesses exploration asset and property and equipment
indicators of impairment and impairment reversals on each reporting date. As future commodity prices
remain volatile, impairment charges or recoveries could be recorded in future periods.
Exploration asset impairments
Exploration asset impairments for the three months and years ended December 31, 2019 and 2018 by
CGU is disclosed in the following table.
Three months ended

% Year ended December 31, %
($000’s) December 31, change change
2019 2018 2019 2018
Cory Moruga 14 59 14 88
East Brighton 131 37 352 422
Impairments 145 96 51 366 510 (28)
During the three months and year ended December 31, 2019, the Company incurred $89,000 and
$310,000 in lease expenses relating to its East Brighton property, respectively (2018 - $37,000 and
$422,000). The lease costs and an additional $42,000 based on decommissioning liability changes in
estimates were impaired given the property’s estimated recoverable value was $nil. During the year
ended December 31, 2019, the Company incurred a further $14,000 impairment charge relating to its
Cory Moruga exploration concession (2018 - $88,000). In both periods, the decommissioning liability
associated with the property was increased based on changes in estimates, and the corresponding
abandonment asset was impaired given the property’s estimated recoverable value was $nil.
The Company identified no indicators of impairment relating to its Ortoire CGU, which had a carrying
value of $13,579,000 as at December 31, 2019 (2018 - $3,644,000).

Property and equipment impairments
Property and equipment impairments (recoveries) for the three months and years ended December 31,
2019 and 2018 by CGU is disclosed in the following table.
Three months and year ended

%
($000’s) December 31, change
2019 2018
Coora 2,966 271
WD-4 3,306 (3,351)
WD-8 1,322 (695)
Property and equipment inventory - 56
Impairment (recoveries) 7,594 (3,719) n/a
At December 31, 2019, the Company evaluated its property and equipment for indicators of any potential
impairment or related impairment reversals. As a result of these assessments, indicators of impairment
were identified on the Coora, WD-4 and WD-8 CGUs related to the forecasted effects of future income tax
changes and uncertainty regarding future strip pricing. Impairment tests were conducted on the
properties, resulting in a net impairment charge of $7,594,000 recognized on the consolidated statements
of comprehensive income (loss).
Based on the results of the Company’s December 31, 2018 evaluation of potential impairment or related
reversals, indicators of impairment were identified on the Company’s Coora CGU, and indicators of
impairment reversals were identified on the Company’s WD-4 and WD-8 properties. Impairment tests
were conducted on the properties, resulting in an impairment charge of $271,000 related to the Coora
CGU and impairment recoveries of $3,351,000 and $695,000 related to the WD-4 and WD-8 CGUs,
respectively. In addition, the Company recorded $56,000 in impairment charges related to oilfield
inventory that was not assigned to a specific CGU during the year ended December 31, 2018.
Subsequent to year-end, significant declines and abnormal volatility in financial markets and world crude
oil prices have occurred as a result of the COVID-19 pandemic and concurrent oil market share war. The
scale and duration of these developments remain uncertain but could impact the Company's operations,
future net earnings, cash flow and financial condition.
The impairment tests for the Company’s property and equipment assets are based on value in use
calculations. As required by IFRS, the Company has not reflected these subsequent conditions in its
indictors of impairment analysis or recoverable amount estimates of its petroleum assets as at December
31, 2019. Impairment indicators for the Company’s property and equipment assets could exist at March
31, 2020, if current conditions persist. Management continues to work on revisions to the Company's
forecasts and operating and capital investment plans in light of current conditions and will use these
updated assumptions and forecasts for its impairment indicator analysis and for impairment testing in the
first quarter of 2020, if such tests are required.
Further information regarding the impairment charges for the years ended December 31, 2019 and 2018
is included in Note 9 "Impairments" of the Company’s December 31, 2019 consolidated financial
statements.
Decommissioning liabilities and abandonment fund
The Company’s decommissioning and reclamation liabilities relate to future site restoration and well
abandonment costs including the costs of production equipment removal and land reclamation based on
current environmental regulations.
Pursuant to production and exploration licences with the MEEI, the Company is obligated to remit $0.25
per barrel sold into an escrow account in the name of the MEEI. The payments are used as a contingency

fund for remediation of pollution arising from petroleum operations carried out under the relevant licence
and the eventual abandonment of wells and decommissioning of facilities used for operations conducted
under the relevant licence. The MEEI shall return the funds in the escrow account once all obligations in
respect of environmental remediation are fulfilled to the satisfaction of the MEEI. Contributions to the fund
are reflected on the consolidated statements of financial position as non-current abandonment fund
assets.
With respect to decommissioning liabilities associated with the Company’s leases with Heritage, the
Company is obligated for its proportional cost of all abandonments defined as its percentage of crude oil
sold in a well in comparison to the well’s cumulative historical production. The Company is not
responsible for the decommissioning of existing infrastructure and sales facilities. The Company is
obligated to remit $0.25 per barrel sold to Heritage into a joint well abandonment fund. These funds are
used solely for well decommissioning. Any costs of wells that are abandoned during the relevant licence
term are credited against any future contributions of the well abandonment fund. Upon expiration of the
relevant agreement, Heritage shall calculate the Company’s total abandonment liability. If Touchstone’s
liability exceeds the well abandonment fund, the Company is obligated to pay the difference. Conversely,
if the proceeds of the fund exceed the liability, the surplus shall be returned to Touchstone. These
amounts are also reflected on the consolidated statements of financial position as non-current
abandonment fund assets. As of December 31, 2019, the Company classified $1,125,000 of accrued or
paid contributions into MEEI and Heritage abandonment funds as abandonment fund assets (2018 -
$966,000).
Pursuant to its Heritage operating agreements, the Company funds Heritage’s $0.25 per barrel obligation
with respect to Heritage’s head licence commitments with the MEEI. As the Company cannot access the
contributions for its future well abandonments and all contributions are non-refundable, the payments are
included in operating expenses as incurred. Additionally, the Company is obligated to remit $0.03 per
barrel to Heritage into a general abandonment fund. The non-refundable proceeds are used as a
contingency fund for the decommissioning and removal of infrastructure and facilities within a property
and are expensed to operating costs as incurred.
Touchstone estimated the net present value of the cash flows required to settle its decommissioning
liabilities to be $11,547,000 as at December 31, 2019 based on a total inflation adjusted future liability of
$27,153,000 (2018 - $8,915,000 and $31,606,000, respectively). The estimate included assumptions in
respect of actual costs to abandon wells or reclaim a property, the time frame in which such costs will be
incurred, and annual inflation factors. December 31, 2019 decommissioning liabilities were valued using a
long-term risk-free rate of 5.5% and a long-term inflation rate of 3.3% (2018 - 7.9% and 3.7%,
respectively). $97,000 and $372,000 of accretion charges were recognized during the three months and
year ended December 31, 2019 to reflect the increase in decommissioning liabilities associated with the
passage of time, respectively (2018 - $67,000 and $262,000). Decommissioning obligation details as at
December 31, 2019 are noted in the table below.
Inflation adjusted
Number of net well Undiscounted balance Discounted balance
balance
locations ($000’s) ($000’s)
($000’s)
833 15,776 27,153 11,547
Environmental stewardship is a core value at Touchstone, and abandonment and reclamation activities
are made in a prudent, responsible manner with the oversight of the Board and in accordance with local
regulations. Decommissioning liabilities are considered critical accounting estimates. There are significant
uncertainties related to decommissioning expenditures, and the impact on the consolidated financial
statements could be material. The eventual timing of and costs for these expenditures could differ from
current estimates. Further information regarding decommissioning liabilities for years ended December
31, 2019 and 2018 is included in Note 15 "Decommissioning Liabilities and Abandonment Fund" of the
Company’s December 31, 2019 consolidated financial statements.

Income taxes
The Company’s two Trinidad exploration and production subsidiaries are subject to the following Trinidad
petroleum taxes:
• Supplemental Petroleum Tax ("SPT") 18% of gross oil revenue less royalties
• Petroleum Profits Tax ("PPT") 50% of net taxable profits
• Unemployment Levy ("UL") 5% of net taxable profits
• Green Fund Levy 0.3% of gross revenue
SPT is computed and remitted on a quarterly basis and is applicable to produced petroleum liquids.
Actual rates vary based on the realized selling prices of crude oil in the applicable quarter. The SPT rate
is 0% when the weighted average realized price of oil for a given quarter is below $50.00 per barrel and
18% when weighted average realized oil prices fall between $50.00 and $90.00. The revenue base for
the calculation of SPT is gross revenue less royalties paid, less 20% investment tax credits on mature
oilfields for allowable tangible and intangible capital expenditures incurred in the applicable fiscal quarter.
Effective January 1, 2020, the investment tax credit relating to mature oilfields was increased to 25%. The
Company’s Ortoire property is not considered a mature oilfield and thus no investment tax credits are
applicable for exploration spending.
Annual PPT and UL taxes are calculated based on net taxable profits. Net taxable profits are determined
by calculating gross revenue less: royalties, SPT paid during the year, capital allowances, operating,
administration and certain finance expenses. PPT losses may be carried forward indefinitely to reduce
PPT in future years. Effective January 1, 2020, PPT losses can only be used to shelter a maximum of
75% of PPT per annum. UL losses cannot be carried forward to reduce future year UL. Developmental
and exploratory capital expenditure allowances (tangible and intangible) were formerly amortized 50% in
year one, 30% in year two and 20% in year three. Effective January 1, 2020, all development and
exploration capital expenditure allowances are amortized on a five-year straight-line basis.
The Company has a Trinidad oilfield service subsidiary that is subject to the greater of a 30% corporation
income tax calculated on net taxable profits or a 0.6% business levy calculated on gross revenue. The
service company is also subject to the green fund levy noted above. All corporate income tax losses can
be carried forward indefinitely. Allowances vary from 10% to 33.3% for various capital expenditures
incurred in the year.
The following table sets forth current income tax expense for the three months and years ended
December 31, 2019 and 2018.

% %
change change
2019 2018 2019 2018
SPT 1,120 474 4,914 1,714
PPT/UL (38) (78) 279 3
Business levy 4 3 25 17
Green fund levy 28 26 150 121
Current income tax
1,114 425 100 5,368 1,855 100
expense
For the three months and year ended December 31, 2019, current income taxes expenses were
$1,114,000 and $5,368,000, respectively (2018 - $425,000 and $1,855,000). The annual increases in
both reporting periods were predominately from increased SPT recorded in 2019 due to significantly
reduced developmental capital activity, which qualified for less SPT input tax credits.

The Company’s December 31, 2019 income tax payable balance was composed entirely of 2019 income
tax accruals. In 2019, Touchstone paid $2,933,000 in historical income tax balances, which allowed the
reversal of previously accrued income tax interest expense based on the aforementioned Trinidad tax
amnesty. The following table is a continuity of the current income tax payable for the year ended
December 31, 2019 and 2018.
Year ended December 31,

($000’s)
2019 2018
Balance, beginning of period 2,730 2,441
Current income tax expense 5,174 1,850
Revisions to estimates 194 5
Income tax interest expense 655 -
Income tax payments (7,336) (1,552)
Reversal of income tax interest (102) -
Effect of change in foreign exchange rates 14 (14)
Balance, end of period 1,329 2,730
Summary by income tax
UL 209 (98)
SPT 1,120 463
Interest - 2,365
Total income tax payable 1,329 2,730
Touchstone’s $13,289,000 deferred income tax liability balance represented the estimated future tax
consequences attributable to differences between financial statement carrying amounts of assets and
liabilities and their respective tax bases as at December 31, 2019 (2018 - $14,994,000). The deferred tax
balance was in a liability position mainly from the discrepancy between the carrying values and the tax
values of the Company’s petroleum assets. The Company recorded deferred tax recoveries of
$3,945,000 and $1,813,000 during the three months and year ended December 31, 2019, respectively
(2018 – expenses of $3,228,000 and $6,897,000). The 2019 deferred tax recoveries were primarily
reflective of the property and equipment impairment charges recorded in the fourth quarter of 2019.
The tax regulations and legislation and interpretations thereof in the various jurisdictions in which the
Company operates are continually changing. As a result, there are generally a number of tax matters
under review, and the Company believes that the provision for income taxes is adequate. Further
information regarding the Company’s income taxes is included in Note 16 "Income Taxes" of the
Company’s December 31, 2019 consolidated financial statements.
Capital Expenditures and Dispositions
Exploration asset expenditures
Exploration asset expenditures include asset additions in areas that have been determined to be in the
exploration phase. Touchstone’s core exploration property is the Ortoire exploration block. The
Company’s exploration asset expenditures during the respective periods are summarized in the following
table.

% %
change change
2019 2018 2019 2018
Lease payments 203 1,264 805 1,796
Geological 32 281 180 662
Drilling, completions and
5,552 - 8,901 -
well testing
Capitalized G&A / other 51 58 227 99
Total expenditures 5,838 1,603 100 10,113 2,557 100

The Company drilled two gross exploration wells on the Ortoire exploration property during 2019,
investing $5,552,000 and $8,901,000 in exploration expenditures during the three months and year ended
December 31, 2019 (2018 - $nil and $nil). The Company's capital costs for the Coho-1 exploration well
was approximately $3.5 million, which included drilling, completion and testing. The Company incurred
approximately $5.1 million to drill the Cascadura-1ST1 well during the year ended December 31, 2019.
2019 capital investment was also focused on the initial building of the Chinook-1 well site.
Property and equipment (development) expenditures

% %
change change
2019 2018 2019 2018
Drilling and completions (58) 4,429 696 13,527
Capitalized G&A 215 337 692 994
Corporate assets / other - 7 - 85
Total expenditures 157 4,773 (97) 1,388 14,606 (90)
Touchstone conducted minimal field development activity in both the fourth quarter and annual 2019
periods, with only well recompletions performed. During the three months and year ended December 31,
2018, the Company drilled three and 11 net developmental wells, respectively.
Property disposition
In December 2018, the Company completed the disposition of its Icacos crude oil property and related
assets. Touchstone sold its 50% operating working interest in the property to the third-party partner for
minimum consideration of $500,000. $38,000 of the consideration was collected during the year ended
December 31, 2019 (2018 - $96,000). The remaining consideration will be paid based on the Company’s
working interest net petroleum sales it would have received had it retained such interest through
December 2020. Should these cumulative payments not exceed the minimum consideration, the
Company will receive the difference prior to the end of February 2021. The Company shall retain all
cumulative payments should such payments exceed the $500,000 minimum consideration through
December 31, 2020.
The disposition was considered non-core as it represented 0.6% of total production during the 2018 year
and 0.3% of proved plus probable reserves at December 31, 2017 and therefore was not significant to the
Company’s 2018 financial results and operational performance.
Liquidity and Capital Resources
Touchstone’s capital management objective is to fund current period decommissioning and capital
expenditures necessary for the replacement of production declines using only funds flow from operations.
Profitable growth activities will be financed with a combination of funds flow from operations and other
sources of capital. Touchstone uses share equity and term debt as primary sources of capital.
As at December 31, 2019, Touchstone had a cash balance of $6,182,000, a working capital deficit of
$1,139,000 and a C$20 million principal term loan balance. The Company’s net debt was $16,503,000 as
at December 31, 2019, representing net debt to annual funds flow from operations of 2.4 times.
On October 31, 2019, the Company and its lender executed an amendment to the credit facility,
increasing the principal amount of the credit facility from C$15 million to C$20 million. The expanded
facility was primarily used to fund the Company’s Cascadura-1ST1 exploration well drilling. The amended
credit facility does not require the commencement of principal payments until January 1, 2021, and
Touchstone continued to be within the financial covenants as at December 31, 2019.

On the basis of the successful results from the first two Ortoire exploration wells, the Company undertook
a private placement in February 2020 in order to support the drilling of a further Ortoire exploration well at
the Chinook prospect. The private placement raised net proceeds of approximately $10.8 million by way
of a placing of 22,500,000 common shares at a price of 40 pence (approximately C$0.69). The net
proceeds of the equity issuance are also expected to be used to complete the second stage of the
Cascadura-1ST1 production test and to provide additional working capital while the Company progresses
on the Ortoire exploration program (see "Financial and Operating Results Summary – Subsequent events
and outlook").
The Company’s near-term development plan is strategically balanced between maintaining base
production levels and proceeding with exploratory activities on the Ortoire property. Touchstone will
continue to take a measured approach to future developmental drilling in an effort to manage financial
liquidity while focusing on the Ortoire exploration opportunity. Management’s long-term strategy is to
maintain net debt to annual funds flow from operations at or below a ratio of 2.0 times. While the
Company may exceed this ratio from time to time, efforts are made after a period of variation to bring the
measure back in line. Touchstone also monitors its capital management through the net debt to net debt
plus equity ratio. Management’s strategy is to utilize more equity than debt, thereby targeting net debt to
net debt plus shareholders’ equity at a ratio of less than 0.4 to 1. The Company's internal capital
management calculations for the year ended December 31, 2019 and December 31, 2018 are
summarized in the table below.
December 31, December 31,

($000’s) Target measure
2019 2018
Current assets (14,118) (15,854)
Current liabilities 15,257 19,172
Working capital deficit(1) 1,139 3,318
Principal non-current portion of term loan 15,364 11,004
Net debt(2) 16,503 14,322
Shareholders’ equity 30,115 31,217
Net debt plus equity 46,618 45,539
Annual funds flow from operations(3) 6,840 8,548
Net debt to funds flow from operations at or < 2.0 times 2.41 1.68
Net debt to net debt plus equity < 0.4 times 0.35 0.31
Notes:
(1) Working capital deficit is a Non-GAAP measure and is calculated as current assets minus current liabilities as they appear on the consolidated
statements of financial position.
Term loan
On November 23, 2016, the Company completed an arrangement for a C$15 million, five-year term credit
facility from a Canadian based investment fund (the "Credit Agreement"). The Credit Agreement bears a
fixed interest rate of 8% per annum, compounded and payable quarterly. In connection with the Credit
Agreement, the Company and the lender entered into a production payment agreement (the "Production
Payment Agreement"), which granted the lender a production payment equal to 1% of petroleum sales
from Company land holdings in Trinidad, payable quarterly through October 31, 2021 regardless of any
repayment or prepayment of the term credit facility. The Credit Agreement and the Company’s production
payment obligations under the Production Payment Agreement are principally secured by fixed and
floating security interests over all present and after acquired assets of the Company and its subsidiaries.

The Credit Agreement and Production Payment Agreement have been subsequently amended as follows:
• June 15, 2018: The Second Amending Agreement to the Credit Agreement extended the term
credit facility maturity date by one year to November 22, 2022 and deferred all principal payments
by one year. The First Amendment to the Production Payment Agreement extended the maturity
date by one year as well.
• March 29, 2019: The Third Amending Agreement to the Credit Agreement further extended the
term credit facility maturity date to November 20, 2023 and deferred all principal payments by one
year. The Second Amendment to the Production Payment Agreement extended the maturity date
by one year to October 31, 2023.
• October 31, 2019: The Fourth Amending Agreement to the Credit Agreement (the "Amended
Credit Agreement"), increased the principal amount of the term credit facility from C$15 million to
C$20 million. The Third Amending Agreement to the Production Payment Agreement increased
future production payment obligations from 1% of petroleum sales to 1.33% of petroleum sales
attributable to the Company’s participating interest in all current Trinidad properties.
The Company is required to repay C$1,100,000 per quarter of the principal outstanding under the term
credit facility provided under the Amended Credit Agreement, commencing on January 1, 2021 through
October 1, 2023, and the then outstanding principal balance is repayable on the November 23, 2023
maturity date. Touchstone continues to have the ability to prepay the credit facility principal amount and
has the option to negotiate a buyout of future production payment obligations with the lender if the
outstanding principal amount of the credit facility is prepaid in full.
The debt instrument is comprised of two financial liability components: the term loan liability and the
production payment liability.
At inception the term loan liability was measured at fair value, net of all transaction fees, using a discount
rate of 12%. The term loan was revalued based on the Third and Fourth Amending Agreements, resulting
in gains of $379,000 and $656,000 recognized during the three months and year ended December 31,
2019, respectively (2018 - $nil and $219,000). The discount on the term loan liability is unwound using
the effective interest rate method to the face value at maturity, resulting in $153,000 and $384,000
recognized to accretion during the three months and year ended December 31, 2019, respectively (2018 -
$74,000 and $301,000). The term loan liability balance was $13,966,000 as at December 31, 2019 (2018
- $10,130,000).
The production payment liability is revalued at each reporting period based on internal estimated future
production and forward crude oil pricing forecasts using a discount rate of 15%. As a result of these
changes in estimates and the Third and Fourth Amending Agreements, revaluation losses of $452,000
and $622,000 were recognized during the three months and year ended December 31, 2019, respectively
(2018 – $289,000 and $341,000). The production payment liability balance was estimated at $989,000 as
at December 31, 2019, with $220,000 classified as a current liability on the consolidated statement of
financial position (2018 - $733,000 and $180,000, respectively).
The Amended Credit Agreement contains industry standard representations and warranties, positive and
negative covenants and events of default. The Fourth Amending Agreement revised the definition of
Funded Debt, which is part of the definition of Net Funded Debt. Net Funded Debt forms part of the Net
Funded Debt to Equity Ratio and the Net Funded Debt to EBITDA Ratio financial covenants in the
Amended Credit Agreement. The definition of Funded Debt excludes lease obligations that were treated
as operating leases under IFRS in effect as at December 31, 2018.

The financial covenants and the Company’s estimated position as at December 31, 2019 are set forth
below.
Covenant Year ended

Covenant
threshold December 31, 2019
Net funded debt to equity ratio(1) < 0.50 times 0.20 times
Net funded debt to EBITDA ratio(2) < 2.50 times 0.77 times
Notes:
(1) Net funded debt is defined in the Amended Credit Agreement as interest-bearing debt less cash. Equity is defined as the book value of
shareholders’ equity less accumulated other comprehensive loss, less the effects of impairment expenses or recoveries.
(2) Means the ratio of net funded debt to EBITDA for the trailing twelve-month period. EBITDA is defined in the Amended Credit Agreement as net
earnings before interest, income taxes and all non-cash items.
Pursuant to the Amended Credit Agreement, a failure of any covenant constitutes an event of default.
Upon an event of default, the lender can declare the principal credit facility balance and any accrued
interest immediately due and payable. The Company routinely reviews Credit Agreement covenants
based on actual and forecasted results and can make changes to development and exploration plans to
comply with the covenants. The Company is committed to having an adaptable capital expenditure
program that can be adjusted to a tightening of liquidity sources if necessary.
Restricted cash
As at December 31, 2019, the Company provided $271,000 in cash collateralized guarantees to Heritage
to support its operating agreement work commitments via bonds that expire on December 31, 2020 (2018
– $271,000).
Finance lease
The Company entered into a five-year, $1,836,000 contractual agreement to lease its coil tubing unit, four
service rigs and ancillary equipment to a third party on October 1, 2017. Effective September 30, 2019,
the parties amended the lease arrangement to exclude a service rig, reducing the principal balance by
$900,000. The amended lease continues to bear a fixed interest rate of 8% per annum, compounded and
payable monthly. Principal is collected on a monthly basis, and the Company continues to hold title to the
assets until all principal and associated interest payments have been collected.
The lease arrangement was accounted for as a finance lease, as substantially all of the risks and rewards
of ownership are held by the lessee. The adoption of IFRS 16 did not affect the finance lease
arrangement at January 1, 2019 (refer to "Changes to Accounting Polices"). At December 31, 2019, the
Company’s finance lease receivable was $376,000, of which $239,000 was classified as non-current
other assets on the consolidated statement of financial position (2018 - $1,447,000 and $1,047,000,
respectively).
Lease liabilities
Lease liabilities were recognized by the Company as a result of the adoption of IFRS 16 (refer to
"Changes to Accounting Policies"). The Company has lease liabilities for head office space, motor
vehicles and office equipment, with contracts effective from one to three years as of December 31, 2019.
Leases are negotiated on an individual basis and contain varying terms and conditions. Discount rates
used in calculating the present values of lease payments during the year ended December 31, 2019 were
between 5 and 10%.

The following table details the movements of the Company’s lease liabilities for the year ended December
31, 2019.
($000’s)
Balance, January 1, 2019 1,352

Interest expense 69
Payments (432)
Derecognition of liabilities (670)
Effect of change in foreign exchange rates 16
Balance, December 31, 2019 335
Current (included in accounts payable and accrued liabilities) 230
Non-current 105
Lease liabilities 335
Effective August 1, 2019, an arrangement relating to oilfield service equipment was amended and
consequently was no longer considered a lease under IFRS 16. Accordingly, the Company’s lease liability
of $670,000 and the associated ROU asset of $655,000 were derecognized, resulting in a $15,000 non-
cash gain recorded in net finance expenses.
Shareholder's equity
The Company is authorized to issue an unlimited number of voting common shares without nominal or
par value. The table below summarizes the outstanding common shares, share options and incentive
share options as at the date of this MD&A, December 31, 2019 and December 31, 2018.
March 25, December 31, December 31,

2020 2019 2018
Common shares outstanding 183,203,095 160,703,095 129,021,428
Share options outstanding 8,593,100 8,740,600 8,534,640
Incentive share options outstanding - - 15,000
Fully diluted common shares 191,796,195 169,443,695 137,571,068
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become
due. Liquidity risk also includes the risk of not being able to liquidate assets in a timely manner at a
reasonable price. The Company’s approach to managing liquidity is to ensure that it will have sufficient
liquidity to meet liabilities when due, under both normal and unusual conditions without incurring
unacceptable losses or jeopardizing the Company’s business objectives. Stewardship of the Company’s
capital structure and potential liquidity risk is managed through its financial and operating forecast
process. The forecast of the Company’s future cash flows is based on estimates of production, crude oil
prices, capital expenditures, royalty expenses, operating expenses, G&A expenses, income tax expenses
and other investing and financing activities. The forecast is regularly updated based on changes in
commodity prices, capital expenditures, production expectations and other factors that in the Company’s
view would impact cash flow.
To manage its capital structure, the Company may reduce its fixed cost structure, adjust capital and
exploration spending, issue new equity or seek additional sources of debt financing. Given that the
Company currently has minimal development work obligations and guarantees, the Company will
continue to manage its capital expenditures to reflect current financial resources in the interest of
sustaining long-term viability (see "Financial and Operating Results Summary – Subsequent events and
outlook").

The following table sets forth estimated undiscounted cash outflows and financial maturities of the
Company’s financial liabilities as at December 31, 2019.
Financial maturity by period

($000’s) Undiscounted Less than 1
1 to 3 years 4 to 5 years
cash outflows year
Accounts payable and accrued liabilities 13,708 13,708 - -
Income taxes payable 1,329 1,329 - -
Term loan principal 15,364 - 6,760 8,604
Estimated term loan production payments 1,946 439 981 526
Term loan interest payments 3,553 1,229 1,849 475
Lease liabilities 351 245 105 1
Total financial liabilities 36,251 16,950 9,695 9,606
Market Risk Management
Management of cash flow variability is an integral component of Touchstone’s business strategy.

Changing business conditions are monitored regularly and, where material, reviewed with the Board of
Directors to establish risk management guidelines to be used by Management. The risk exposure
inherent in the movements of the price of crude oil and fluctuations in foreign exchange rates are all
proactively reviewed by Touchstone and may be managed through the use of derivative contracts as
considered appropriate.
The Company has elected not to apply IFRS prescribed “hedge accounting” rules. Accordingly, the fair
value of financial derivative contracts is recorded at each period-end. The fair value may change
substantially from period to period depending on market conditions. As a result, comprehensive income
(loss) may fluctuate considerably based on the period ending commodity forward strip prices compared to
the prices in any derivative contracts.
Commodity price risk
The Company is exposed to commodity price movements as part of its operations. Commodity prices for
oil are impacted by the world and continental/regional economy and other events that dictate the levels of
supply and demand. Consequently, these changes could also affect the value of the Company’s
properties, the level of spending for exploration and development and the ability to meet obligations as
they come due. Touchstone maintains a risk management strategy to protect funds flow from operations
from the volatility of commodity prices. Touchstone’s strategy focuses on the periodic use of puts,
costless collars, swaps or fixed price contracts to limit exposure to fluctuations in commodity prices while
allowing for participation in commodity price increases.
In April 2019, the Company purchased crude oil put option contracts for 800 barrels per day at a strike
price of Brent $56.10 per barrel from June 1, 2019 to December 31, 2019. The put options were
purchased from a financial institution for an upfront cash premium of $171,000. The Company initially
recognized the premium for the put options as a derivative financial asset, with the derivatives
subsequently recorded at their estimated fair value based on the difference between the contracted price
and the period-end forward price using quoted market prices. The monthly options expired without being
exercised, resulting in derivative losses of $118,000 and $171,000 recognized during the three months
and year ended December 31, 2019 (2018 - $nil and $153,000). The Company had no commodity
financial contracts in place as of January 1, 2020.
The Company will continue to monitor forward commodity prices and may enter future commodity-based
risk management contracts to reduce the volatility of petroleum sales and protect future development and
exploration capital programs.

Foreign currency risk
Foreign currency exchange risk arises from changes in foreign exchange rates that may affect the fair
value or future cash flows of the Company’s financial assets or liabilities. As the Company primarily
operates in Trinidad, fluctuations in the exchange rate between the TT$ and the US$ could have a
significant effect on reported results, as the sales prices of crude oil are determined by reference to US$
denominated benchmark prices and the majority of the Company’s operating costs are denominated in
TT$. This is currently mitigated by the fact that the TT$ is informally pegged to the US$. In addition, the
Company has Canadian dollar denominated debt, related interest and production payment obligations of
which future cash repayments are directly impacted by the exchange rate in effect on each payment date.
The Company also has foreign exchange exposure on head office costs denominated in Canadian dollars
and costs denominated in pounds sterling required to maintain its AIM listing. Any material movements in
the C$ to US$ exchange rate may have a material effect on the Company’s reporting results (see
"Foreign exchange and foreign currency translation").
The Company’s foreign currency policy is to monitor foreign currency risk exposure in its areas of
operations and mitigate that risk where possible by matching foreign currency denominated expenses
with petroleum sales paid in foreign currencies. The Company attempts to limit its exposure to foreign
currency through collecting and paying foreign currency denominated balances in a timely fashion. The
Company has no contracts in place to manage foreign currency risk as at the date hereof or during the
years ended December 31, 2019 and 2018.
Credit Risk
Credit risk arises from the potential that the Company may incur a loss if a counterparty to a financial
instrument fails to meet its obligation in accordance with agreed terms. As at December 31, 2019, the
Company was exposed to credit risk with respect to its accounts receivable and other assets, which
include finance lease receivable and deferred consideration from a property disposition.
The credit risk associated with Touchstone’s finance lease receivable is considered to be low as the asset
is secured by the underlying fixed assets, with ownership transferring to the counterparty subsequent to
the final lease payment (refer to "Liquidity and Capital Resources - Finance lease"). The credit risk
associated with the Company’s deferred consideration is also considered low as the Company is selling
the counterparty’s crude oil produced from the disposed assets through its facilities and currently has the
right to net the quarterly payment from the gross proceeds received.
The Company’s credit exposure on accounts receivable typically pertains to accrued sales revenue for
monthly production volumes sold to Heritage and value added taxes due from the Trinidad government.
As at December 31, 2019, $2,074,000 of petroleum sales was included in accounts receivable,
representing approximately 28% of the consolidated accounts receivable balance (2018 - $5,165,000 and
43%, respectively). $4,283,000 in value added tax was included in accounts receivable as at December
31, 2019, which represented approximately 58% of the accounts receivable balance (2018 - $6,006,000
and 51%, respectively).
As at December 31, 2019, Touchstone believes that the accounts receivable balances that are past due
are ultimately collectible, as the majority are due from Trinidad government agencies for value added
taxes, and the Company has historically not experienced any material collection issues. The aging of
accounts receivable as at December 31, 2019 and December 31, 2018 is disclosed in the following table.

($000's)
2019 2018
Not past due 3,581 6,731
Past due (greater than 90 days) 3,767 5,162
Accounts receivable 7,348 11,893

Contractual Obligations, Commitments and Guarantees
In the normal course of operations, the Company executes agreements that provide for indemnification
and guarantees to counterparties in transactions such as the sale of assets. The Company indemnifies its
directors and officers against any and all claims or losses reasonably incurred in the performance of their
services to the Company to the extent permitted by law. The Company maintains liability insurance for its
officers and directors. The Company is party to various legal claims associated with the ordinary conduct
of business, and the Company does not expect that these claims will have a material impact on its
financial position.
The Company has minimum work obligations under various operating agreements with Heritage,
exploration commitments under exploration and production agreements with the MEEI and various lease
commitments for office space and equipment.
The following table outlines the Company’s estimated minimum contractual capital requirements as at
December 31, 2019.
Estimated payments due by period

($000’s)
Total 2020 2021 2022 Thereafter
Operating agreement commitments
Coora blocks 104 15 16 16 57
WD-4 block 236 35 37 39 125
WD-8 block 224 32 34 36 122
New Dome block 15 2 2 2 9
South Palo Seco block 1,464 90 801 101 472
Fyzabad block 985 73 74 76 762
Exploration agreement commitments
Ortoire block 4,951 4,951 - - -
East Brighton block 2,319 2,319 - - -
Office leases 578 300 278 - -
Equipment leases 189 183 6 - -
Minimum payments 11,065 8,000 1,248 270 1,547
Under the terms of its operating agreements, the Company must fulfill the minimum work obligations on
an annual basis over the specific licence term. In aggregate, the Company is obligated to drill 12 wells
and perform 18 well recompletions prior to the end of 2021. As of the date of this MD&A, 10 wells were
drilled, and 15 well recompletions were completed with respect to these obligations (see "Operating
Agreements"). The Company has provided $271,000 in cash collateralized guarantees in favour of
Heritage to support its operating agreement work commitments (refer to "Liquidity and Capital Resources
- Restricted cash").
The following table sets forth the Company’s December 31, 2019 estimated costs and timing of its
minimum future Ortoire exploration commitments, which included acquiring and processing 85-line
kilometres of 2D seismic and the drilling of two vertical wells.

($000’s)
Lease payments 451 451 - - -
2D seismic 2,000 2,000 - - -
Drilling commitments 2,500 2,500 - - -
Minimum payments 4,951 4,951 - - -

Touchstone’s December 31, 2019 estimated costs and timing of its minimum future East Brighton
exploration commitments, which included the drilling of one well to a total depth of 5,000 true vertical feet,
are disclosed in the following table.

($000’s)
Lease payments 319 319 - - -
Drilling commitments 2,000 2,000 - - -
Minimum payments 2,319 2,319 - - -
As at December 31, 2019, the Company provided a general security agreement to Export Development
Canada in connection with a performance security guarantee that support a $500,000 bid bond issued to
the MEEI in relation to a Trinidad solar project proposal. Subsequent to December 31, 2019, the
Company was notified it was not a successful bidder, and the bid bond will expire once the MEEI has
formally notified the issuing bank or the August 1, 2020 expiry date.
Off-balance Sheet Arrangements
The Company did not enter into any off-balance sheet arrangements during the years ended December
31, 2019 and 2018.
Related Parties
The Company’s Corporate Secretary and Director is a partner of the Company’s legal counsel, Norton
Rose Fulbright Canada LLP. For the year ended December 31, 2019, $94,000 in legal fees charged by
Norton Rose Fulbright Canada LLP were incurred, of which $13,000 were included in accounts payable
and accrued liabilities as at December 31, 2019 (2018 - $38,000 and $8,000, respectively).
The Company has determined that the key management personnel of the Company consists of its
officers and directors. The Company provides salaries and directors' fees, annual bonuses and other
benefits to its key management personnel. In addition, the Company provides share-based compensation
to its key management personnel under its share option plan. For the year ended December 31, 2019,
Touchstone recognized $1,536,000 in total key management personnel compensation (2018 -
$1,376,000). The compensation paid to the directors of the Company during the year ended December
31, 2019 is set forth in the following table.
Share-based All other Total

($000’s)
Fees earned compensation compensation compensation
Paul R. Baay(1) - - - -
Kenneth R. McKinnon 34 11 8 53
Peter Nicol 32 11 8 51
Stanley T. Smith 34 11 8 53
Thomas E. Valentine 30 10 8 48
Dr. Harrie Vredenburg 30 10 8 48
John D. Wright 45 11 8 64
Director compensation 205 64 48 317
Note:
(1) Mr. Baay does not receive compensation for his service as a director during the period as he is an executive officer of the Company.

Changes to Accounting Policies
Presentation currency
The Company changed its presentation currency from Canadian dollars to United States dollars effective
January 1, 2019, with retrospective application on comparative figures in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors and IAS 21 Foreign Currency. The
change in accounting policy was made to better reflect the Company’s international business activities
and to improve comparability of the Company’s financial results with other internationally focused junior
oil and gas exploration and production companies. Touchstone’s functional currencies of the parent
company and its subsidiaries remained unchanged.
For comparative purposes, historical consolidated financial statements and financial amounts included in
this MD&A have been restated to reflect financial results had they been presented in US$ since the
Company’s inception. The change in presentation currency did not have an economic impact on the
Company’s underlying operations and transactions. However, elements of earnings or loss and any ratios
incorporating elements of earnings and loss have changed as a result of different currency rates being
applied thereto.
Further information regarding the Company’s change in presentation currency is included in Note 4
"Changes to Accounting Policies" of the Company’s December 31, 2019 consolidated financial
statements.
Adoption of IFRS 16 Leases
Effective January 1, 2019, the Company adopted IFRS 16 which requires the recognition of a ROU asset
and associated lease liability for most leasing arrangements where the Company is acting as the lessee.
Prior to the adoption of this standard, identified leases where the Company was the lessee were
categorized as either operating or finance leases, and operating leases were not subject to recognition on
the consolidated statements of financial position. IFRS 16 allows lessors to continue with the dual
classification model for recognized leases with the resultant accounting remaining unchanged from
previous guidance. The Company is the lessee in the majority of its lease arrangements; however, the
Company does have one material lease arrangement where it acts as the lessor.
The Company elected to apply IFRS 16 using the modified retrospective approach which does not require
the restatement of prior period financial information. Modified retrospective application recognizes the
cumulative effect of IFRS 16 as an adjustment to opening accumulated deficit at January 1, 2019 and
applies the standard prospectively. Accordingly, comparative information before adoption has not been
restated and continues to be reported under the previous guidance.
On adoption of IFRS 16, the Company recognized lease liabilities in relation to leases under the
principles of the new standard measured at the present value of the remaining lease payments,
discounted using the interest rate implicit in the lease or the Company’s incremental borrowing rate as at
January 1, 2019. The associated ROU assets (included in property and equipment) were measured at the
amount equal to the lease liability on January 1, 2019 less any amount previously recognized for office
lease inducements, with no impact on opening accumulated deficit.
The Company identified ROU lease assets and liabilities related to head office space, oilfield service
equipment, motor vehicles and office equipment. Certain short-term leases (less than 12 months) and
leases of low-value assets are exempt from recognition requirements.

The impact on the consolidated statement of financial position as at January 1, 2019 is detailed in the
table below.
January 1,
($000’s)
2019
ROU assets (included in property and equipment) 1,194
Increase in total assets 1,194
Current portion of lease liabilities (included in accounts payable and accrued liabilities) 482
Provisions and accounts payable and accrued liabilities (158)
Non-current portion of lease liabilities 870
Increase in total liabilities and shareholders’ equity 1,194
Refer to "Liquidity and Capital Resources – Lease liabilities" for further information regarding 2019 lease
liabilities. For the year ended December 31, 2019, the Company reclassified approximately $348,000 in
operating expenses and approximately $83,000 in G&A expenses to lease interest expenses and
payments of finance leases as a result of the adoption of IFRS 16.
The adoption of IFRS 16 did not affect its finance lease where the Company is the lessor.
Certain of the Company’s performance measures including funds flow from operations and operating
netbacks are impacted by the adoption of IFRS 16. Where lease payments for certain arrangements were
previously included in operating expense and G&A, these payments are now reflected as payments of
interest and lease obligations, which increase total funds flow from operations and operating netbacks. As
IFRS 16 was adopted using a modified retrospective approach, prior period comparatives have not been
restated and may not be comparable. Further information regarding the Company’s adoption of IFRS 16
is included in Note 4 "Changes to Accounting Policies" to the Company’s December 31, 2019
consolidated financial statements.
Significant Accounting Estimates, Judgements and Assumptions
The preparation of financial statements in conformity with IFRS requires Management to make estimates,
judgments, and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, revenues and expenses. Actual results may differ from estimates, and those
differences may be material. The estimates, judgements and assumptions used are subject to updates
based on experience and the application of new information. Estimates and underlying assumptions are
reviewed on an ongoing basis, and any revisions to accounting estimates are recognized in the period in
which the estimates are revised.
Significant estimates and judgements made by Management in the preparation of the Company’s
consolidated financial statements are included in Note 5 "Use of Estimates, Judgements and
Assumptions" of the December 31, 2019 consolidated financial statements.
Control Environment
Management, including the Company’s President and Chief Executive Officer and Chief Financial Officer,
assessed the design and effectiveness of internal control over financial reporting ("ICFR") and disclosure
controls and procedures ("DC&P") as at December 31, 2019. In making its assessment, Management
used the Committee of Sponsoring Organizations of the Treadway Commission Framework in Internal
Control - Integrated Framework (2013) to evaluate the design and effectiveness of internal control over
financial reporting. Based on this evaluation, Management concluded that both ICFR and DC&P were
effective as at December 31, 2019. There were no changes during the three months and year ended
December 31, 2019 that had materially affected, or were reasonably likely to materially affect, ICFR.

ICFR is a process designed to provide reasonable assurance that all assets are safeguarded, and
transactions are appropriately authorized and to facilitate the preparation of relevant, reliable and timely
information. Internal control systems, no matter how well designed, have inherent limitations and may not
prevent or detect misstatements. Therefore, even those systems determined to be effective can provide
only reasonable assurance with respect to financial statement preparation and presentation. Furthermore,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may
become inadequate because of changes in conditions or that the degree of compliance with the policies
or procedures may deteriorate.
Business Risks
For a full understanding of risks that affect the Company, the following should be read in conjunction with
the Company’s 2019 Annual Information Form dated March 25, 2020, which can be found on the
Company’s SEDAR profile (www.sedar.com).
The Company is exposed to a variety of risks including, but not limited to, political, operational, financial,
and environmental risks. As discussed in the "Market Risk Management" section of this MD&A, the
Company is exposed to normal financial risks inherent in the international oil and gas industry including
commodity price risk, exchange rate risk, and credit risk. The Company continuously monitors
opportunities to use financial instruments to manage exposure to fluctuations in foreign exchange and
commodity prices. The Company operates the majority of its properties and, therefore, has significant
control over the timing and costs related to exploration commitments and development opportunities. The
following are key risks, uncertainties and opportunities associated with the Company's business that can
impact financial results.
Foreign location of assets and foreign economic and political risk
Touchstone is subject to risks associated with international operations in Trinidad. The Company’s
operations may be adversely affected by changes in foreign government policies and legislation or social
instability and other factors which are not within the control of Touchstone, including, but not limited to:
nationalization, expropriation of property without fair compensation or marketable compensation;
renegotiation or nullification of existing concessions and contracts; the imposition of specific drilling
obligations and the development and abandonment of fields; changes in energy and environmental
policies or the personnel administering them; changes in oil and natural gas pricing policies; the actions of
national labour unions; currency fluctuations and devaluations; currency exchange controls; economic
sanctions; and royalty and tax increases. The Company’s operations may also be adversely affected by
laws and policies of Trinidad affecting foreign trade, taxation and investment. If the Company’s operations
are disrupted and/or the economic integrity of its projects are threatened for unexpected reasons, its
business may be harmed. Prolonged problems may threaten the commercial viability of its operations.
Although Management considers political conditions in Trinidad as generally stable, changes may occur
in its political, fiscal and legal systems, which might affect the ownership or operation of the Company’s
interests.
Volatility of commodity prices and foreign exchange rates
The Company’s operational results and financial condition, and therefore its amount of capital investment,
are dependent on the prices received for crude oil and natural gas production. Decreasing crude oil and
natural gas prices will decrease the Company’s cash flows, adversely impacting the Company’s level of
capital investment and may result in the shut-in of certain producing properties. Any movement in crude
oil and natural gas prices will have an effect on the Company's ability to continue its exploration and
development capital programs. Crude oil and natural gas prices are affected by global economic and
political events that dictate the levels of supply and demand. Political factors include foreign tax regimes
and protectionist measures that could have the effect of closing off key markets. Supply and demand
factors, including weather and general economic conditions as well as conditions in other crude oil and
natural gas regions, impact prices. Touchstone may manage the risk associated with changes in
commodity prices by entering into crude oil or natural gas price derivative contracts. If the Company

engages in activities to manage its commodity price exposure, it may forego the benefits it would
otherwise experience if commodity prices were to increase. In addition, commodity derivative contracts
activities could expose the Company to losses. To the extent that Touchstone engages in risk
management activities related to commodity prices, it will also be subject to credit risks associated with
counterparties with which it contracts. Refer to "Market Risk Management - Commodity price risk" in this
MD&A for further details.
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will
fluctuate as a result of changes in foreign currency exchange rates. The Company is exposed to foreign
currency fluctuations as various portions of its working capital balances, its term loan and production
obligation and future expenses and revenues are denominated in US$, TT$, C$ and UK pounds sterling
(see "Market Risk Management – Foreign currency risk").
Adverse Economic Conditions
The demand for energy, including crude oil and natural gas, is generally linked to broad-based economic
activities. If there was a slowdown in economic growth, an economic downturn or recession or other
adverse economic or political development in the United States, Europe, or Asia, there could be a
significant adverse effect on global financial markets and commodity prices. In addition, continued
hostilities in the Middle East and the occurrence or threat of terrorist attacks in the United States or other
countries could adversely affect the global economy. Global or national health concerns, including the
outbreak of pandemic or contagious diseases, such as the recent COVID-19 outbreak, may adversely
affect the Company by (i) reducing global economic activity thereby resulting in lower demand for crude
oil and natural gas, (ii) impairing its supply chain, for example, by limiting the manufacturing of materials
or the supply of services used in Touchstone's operations, and (iii) affecting the health of its workforce,
rendering employees unable to work or travel. These and other factors that affect the demand for crude
oil and natural gas and the Company's business and industry could ultimately have an adverse impact on
Touchstone's results of operations and cash flows.
Refinancing and debt service
The Company anticipates making substantial capital expenditures for the acquisition, exploration,
development and production of crude oil and natural gas reserves in the future. From time to time, the
Company may have to raise additional funds to finance business development activities. The Company’s
ability to raise additional capital will depend on a number of factors such as general economic and market
conditions that are beyond the Company’s control. Internally generated funds will also fluctuate with
changing commodity prices. The Company is committed to having an adaptable capital expenditure
program that can be adjusted to capitalize on acquisition opportunities and, if necessary, a tightening of
liquidity sources.
Touchstone currently has a C$20,000,000 term credit facility that is secured against the current and
future assets of the Company. Touchstone is required to comply with covenants under this facility, and in
the event it does not comply, access to capital could be restricted or repayment may be required. The
Company routinely reviews the covenants based on actual and forecasted results and has the ability to
make changes to development and exploration plans to comply with the covenants under the credit
facility. If Touchstone becomes unable to pay its debt service charges or otherwise commits an event of
default, the lender may foreclose on such assets of Touchstone or sell the working interests.
Access to capital markets
Touchstone’s capital expenditures are financed from funds from operations, borrowings, proceeds from
property divestments and possible future equity issuances. The Company’s ability to issue equity is
dependent upon, among other factors, the overall state of capital markets and investor appetite for
investments in the international energy industry and Company securities. Further, if revenues or reserves
decline, the Company may not have access to the capital necessary to undertake or complete future
drilling programs.

To the extent that external sources of capital become limited, unavailable or available on onerous terms,
the Company's ability to make capital investments and maintain or expand existing assets and reserves
may be impaired, and Touchstone's assets, liabilities, business, financial condition, and results of
operations may be materially or adversely affected as a result.
Environmental regulations
The Company is subject to environmental laws and regulations that affect aspects of the Company's past,
present and future operations. Extensive environmental laws and regulations in Trinidad will and do affect
nearly all of the operations of the Company. These laws and regulations set various standards regulating
certain aspects of health and environmental quality, including air emissions, water quality, wastewater
discharges and the generation, transport and disposal of waste and hazardous substances; provide for
penalties and other liabilities for the violation of such standards; and establish, in certain circumstances,
obligations to remediate current and former facilities and locations where operations are or have been
conducted. In addition, special provisions may be appropriate or required in environmentally sensitive
areas of operation. The Company adopts prudent and industry-recommended field operating procedures
for all operations, as well as maintaining a robust health, safety and environment program.
Significant liability could be imposed on the Company for costs resulting from potential unknown and
unforeseeable environmental impacts arising from the Company's operations, including damages, clean-
up costs or penalties in the event of certain discharges into the environment, environmental damage
caused by previous owners of properties purchased by Touchstone or non-compliance with
environmental laws or regulations. While these costs have not been material to the Company in the past,
there is no guarantee that this will continue to be the case in the future.
Operational matters
The operation of oil and gas wells and sales facilities involves a number of operational and natural
hazards. Operational risks include competition, reservoir performance uncertainties, well blow-outs and
other operating hazards, lack of infrastructure or transportation to access markets and monetize reserves,
and regulatory, environment and safety concerns. The Company works to mitigate these risks by
employing highly skilled personnel and utilizing available technology. The Company maintains a
corporate insurance program in amounts consistent with industry practices to protect against insurable
losses. Business interruption insurance may also be purchased for selected facilities, to the extent that
such insurance is available. The Company may become liable for damages arising from such events
against which it cannot insure or against which it may elect not to insure because of high premium costs
or other reasons. Costs incurred to repair such damage or pay such liabilities will reduce cash flows and
may reduce future capital investments. Furthermore, the Company may be subject to specific project risks
that may be required to process and market its natural gas reserves.
The oil and natural gas industry is intensely competitive, with the Company competing against companies
that may have greater technical and financial resources. There is competition for new exploration and
development properties, for infrastructure and sales contracts, for drilling and other specialized technical
equipment and for experienced key human resources.
Sole purchaser and the ability to market
The Company is exposed to sole purchaser risk in Trinidad as Heritage is the sole purchaser of crude oil.
Touchstone's ability to market its crude oil depends upon numerous factors beyond its control, including:
the availability of pipeline capacity; the supply of and demand for crude oil; the availability of alternative
fuel sources; Heritage’s future financial viability and ability to remain a going concern; and the effects of
weather conditions. Deliverability uncertainties relate to third-party processing and storage facilities,
operational problems affecting pipelines and facilities as well as government regulation relating to oil
prices, taxes, royalties, land tenure, allowable production, and the export of crude oil. Because of these
factors, Touchstone could be unable to market or to obtain competitive prices for the crude oil it produces.

The amount of oil and natural gas that Touchstone can produce and sell is subject to the accessibility,
availability, proximity and capacity of these third-party processing facilities and pipeline systems. From
time-to-time, these facilities may discontinue or decrease operations either as a result of normal servicing
requirements or as a result of unexpected events. A discontinuation or decrease of operations could have
a materially adverse effect on the Company's ability to market its oil and natural gas production. The
ongoing lack of availability of capacity in any of the third-party processing facilities and pipeline systems
could result in Touchstone's inability to realize the full economic potential of its production, or in a
reduction of the price offered for its production.
Reserves estimates
The reserves and recovery information contained in Touchstone’s annual independent reserves
evaluation is only an estimate. Reserve values are based on a number of variables and assumptions
such as future commodity prices, future production, future operating and capital costs and governmental
regulations. The actual production and ultimate reserves from the properties may be greater or less than
the estimates prepared by the independent reserves evaluator. The reserves evaluator forecasts reserve
volumes and future cash flows based upon current and historical well performance through to the
economic production limit of individual wells. Notwithstanding established precedence and contractual
options for the continuation and renewal of the Company’s existing operating agreements, in many cases
the forecast economic limit of individual wells is beyond the current term of the relevant operating
agreements. There is no certainty as to the renewal of any of the Company’s existing operating
arrangements.
Depletion of reserves
The Company’s future crude oil and natural gas reserves and production, and therefore its cash flows, will
be highly dependent on its success in exploiting its reserves base and acquiring additional reserves.
Without reserves additions through acquisition or development activities, Touchstone’s reserves and
production will decline over time as the oil and natural gas reserves are produced. There can be no
assurance that the Company will make sufficient capital expenditures to maintain production at current
levels. There can be no certainty that Touchstone will be successful in developing or acquiring additional
reserves on terms that meet the Company’s investment objectives.
Counterparty risk
Credit risk is the risk of a counterparty failing to meet its obligations in accordance with the agreed upon
terms. The Company may be exposed to third-party credit risk through its contractual arrangements with
its current or future joint operation partners, marketers of its commodities and other parties. Touchstone
has established credit policies and controls designed to mitigate the risk of default or non-payment with
respect to oil and natural gas sales and financial derivative transactions. However, the Company is
exposed to sole purchaser risk in Trinidad as state-owned Heritage is the sole purchaser of crude oil. In
addition, the Company historically has aged accounts receivables owing for Trinidad based value added
taxes. Although ultimate collection is erratic and therefore the timing thereof cannot be estimated with any
certainty, the Company believes that all of the balances are ultimately collectable as it has not
experienced any past collection issues (see "Credit risk").
Exploration
As a participant in the oil and gas industry, the Company is exposed to a high level of exploration and
production risk, upon which there is no assurance that hydrocarbon reserves will be discovered and
economically produced. The Company’s current and future (to the extent discovered or acquired) proved
reserves will decline as reserves are produced from its properties unless Touchstone can acquire or
develop new reserves. The business of exploring for, developing or acquiring reserves is capital intensive
and is subject to numerous estimates and interpretations of geological and geophysical data. There can
be no assurance that the Company’s future exploration, development and acquisition activities will result
in material additions of proved reserves. To manage this risk, to the extent possible, the Company

employs highly experienced geologists, uses technology such as 2D or 3D seismic as a primary
exploration tool and focuses exploration efforts in known hydrocarbon-producing basins. The Company
may also choose to mitigate exploration risk through acquisitions that may require raising funds.
Changes in income tax legislation
In the future, income tax laws or other laws may be changed or interpreted in a manner that adversely
affects Touchstone or its shareholders. Tax authorities having jurisdiction over the Company or its
shareholders may disagree with how Touchstone calculates its income for tax purposes to the detriment
of the Company and its shareholders. Furthermore, changes in Trinidad tax laws may have an
unfavourable effect on cash flows, adversely impacting the Company’s level of capital investment.
The Trinidad exploration and production agreements
The current exploration and production licences, LOAs, joint operating agreements and/or FOAs with
respect to Touchstone's properties contain significant obligations on the part of the Company or its
subsidiaries including minimum work commitments on blocks held in Trinidad which, upon a continuing
default, may give rise to the termination of the Company's operatorship interest therein. There are no
assurances that all of these commitments will be fulfilled within the time frames allowed. As such,
Touchstone may lose certain exploration and production rights on the blocks affected and may be subject
to certain financial penalties that would be levied by Heritage, the MEEI, or the other parties thereto, as
applicable. The current forms of LOAs and FOAs, as applicable, may, in certain circumstances, be
terminated at Heritage's or the MEEI’s discretion and are subject to a defined term, and there is no
certainty as to any renewal.
Further, the Company is operating under a number of private lease agreements and one government
licence which have expired and are currently being renegotiated. Based on legal opinions obtained from
Trinidad legal counsel, the Company is continuing to recognize revenue as operator, is paying all
associated royalties and taxes, and no title to its lands in Trinidad has been disputed. However, there is
no certainty that such expired lease agreements will be renewed, on terms satisfactory to the Company or
at all, or that the Company's rights as operator will not be challenged or impugned.
Retention of key personnel
A loss in the key personnel of Touchstone could delay the completion of certain projects or otherwise
have a material adverse effect on the Company. Shareholders are dependent on the Company's
Management and staff in respect of the administration and management of all manners relating to the
Company's assets. Any deterioration of Touchstone's corporate culture could adversely affect its long-
term success.
Cyber-security
Touchstone employs and depends upon information technology systems to conduct its business. These
systems have the potential to introduce information security risks, which are growing in both complexity
and frequency and could include potential breakdown, invasion, virus, cyber-attack, cyber-fraud, security
breach, and destruction or interruption of Touchstone's information technology systems by third parties or
insiders. Unauthorized access to these systems by employees or third parties could lead to corruption or
exposure of confidential, fiduciary or proprietary information, interruption to communications or operations
or disruption to business activities. Further, disturbance to critical information technology services, or
breaches of information security, could have a negative effect on the Company's assets, performance and
earnings, and reputation. The significance of any such event is difficult to quantify but may in certain
circumstances be material and could have a material adverse effect on the Company's business, financial
condition and results of operations.

Advisory on Forward-Looking Statements
Certain information regarding Touchstone set forth in this MD&A, including assessments by the
Company’s Management of the Company’s plans and future operations, contains forward-looking
statements that involve substantial known and unknown risks and uncertainties. All statements other than
statements of historical fact may be forward-looking statements. Forward-looking statements are often,
but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate",
"expect", "may", "will", "project", "predict", "potential", "target", "intend", "could", "might", "should",
"believe" and other similar expressions.
Such statements represent the Company’s internal projections, estimates or beliefs concerning, among
other things, future growth, results of operations, production rates, production decline rates, the
magnitude of and ability to recover oil and gas reserves, plans for and results of drilling and recompletion
activities, well abandonment costs, the ability to secure necessary personnel, equipment and services,
environmental matters, future commodity prices, changes to prevailing regulatory, royalty, tax and
environmental laws and regulations, the impact of competition, future capital and other expenditures
(including the amount, nature and sources of funding thereof), future financing sources, business
prospects and opportunities, risk that the Company will not be able to obtain contract extensions or fulfill
the contractual obligations required to retain its rights to explore, develop and exploit any of its properties
and risks related to lawsuits.
Although the Company believes that the expectations reflected in the forward-looking statements are
reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such
expectations are inherently subject to significant business, economic, operational, competitive, political
and social uncertainties and contingencies. Many factors could cause the Company’s actual results to
differ materially from those expressed or implied in any forward-looking statements made by, or on behalf
of, Touchstone. In particular, forward-looking statements contained in this MD&A may include, but are not
limited to, statements with respect to:
• the Company's business and operational strategies, including targeted jurisdictions and
technologies used to execute its strategies;
• financial condition and outlook and results of operations;
• the Company's financial and operational response to the recent COVID-19 outbreak and the
impact it will have on the Company's operations and future petroleum pricing;
• future demand for the Company's petroleum products and economic activity in general;
• the Company’s future capital expenditure programs, including the anticipated timing, allocation
and costs thereof and the method of funding;
• the Company's estimated timing of development of its Ortoire exploration wells;
• crude oil and natural gas production levels, estimated field production levels and production test
results;
• the performance characteristics of the Company's oil and natural gas properties;
• expectations regarding the ability of the Company to raise capital and to continually add to
reserves through acquisitions and development;
• future development and exploration activities to be undertaken in various areas and timing
thereof, including future cash flows to be derived therefrom and the fulfillment of minimum work
obligations and exploration commitments;
• terms and estimated future expenditures of the Company's contractual commitments and their
timing of settlement;

• terms and title of exploration and production licences and the expected renewal of certain
contracts;
• the Company’s expectations regarding its ability to obtain contract extensions or fulfill the
contractual obligations required to retain its rights to explore, develop and exploit any of its
undeveloped properties;
• receipt of anticipated or future regulatory approvals;
• access to facilities and infrastructure;
• expected levels of operating costs, G&A costs and other costs associated with the Company’s
business;
• the Company's risk management strategy and the future use of commodity derivatives to manage
movements in the price of crude oil and natural gas;
• treatment under current and future governmental regulatory regimes and tax laws;
• tax horizon, royalty rates and future tax and royalty rates enacted in the Company’s areas of
operations;
• foreign currency risk and the ability to reverse unrealized foreign exchange gains and losses in
the future;
• the Company's future liquidity and future sources of liquidity;
• the Company’s future compliance with its Credit Agreement covenants and its ability to make
future scheduled interest, principal and production obligation payments;
• estimated amounts of the Company’s future production payment obligations in connection with its
Production Payment Agreement;
• the potential of future acquisitions or dispositions;
• general economic and political developments in Trinidad;
• estimated amounts, timing and the anticipated sources of funding for the Company's
decommissioning liabilities;
• effect of business and environmental risks on the Company; and
• the statements under "Significant Accounting Estimates, Judgments and Assumptions".
Many factors could cause the Company’s actual results to differ materially from those expressed or
implied in any forward-looking statements made by, or on behalf of, the Company. The Company is
exposed to numerous operational, technical, financial and regulatory risks and uncertainties, many of
which are beyond its control and may significantly affect anticipated future results. The Company is
exposed to risks associated with negotiating with foreign governments as well as country risk associated
with conducting international activities. Operations may be unsuccessful or delayed as a result of
competition for services, supplies and equipment, mechanical and technical difficulties, ability to attract
and retain qualified employees on a cost-effective basis, commodity and marketing risk. The Company is
subject to significant drilling risks and uncertainties including the ability to find crude oil and natural gas
reserves on an economic basis and the potential for technical problems that could lead to well blow-outs
and environmental damage. The Company is exposed to risks relating to the inability to obtain timely
regulatory approvals, surface access, access to third-party gathering and processing facilities,
transportation and other third-party related operation risks. The Company is subject to industry conditions
including changes in laws and regulations, the adoption of new environmental laws and regulations and
changes in how they are interpreted and enforced. There are uncertainties in estimating the Company’s
reserve base due to the complexities in estimated future production, costs and timing of expenses and
future capital. The Company is subject to the risk that it will not be able to fulfill the contractual obligations
required to retain its rights to explore, develop and exploit any of its properties. The financial risks the
Company is exposed to include, but are not limited to, the impact of general economic conditions in

Canada, the United Kingdom and Trinidad, the impact of significant volatility in market prices for oil and
gas, the ability to access sufficient capital from internal and external sources, changes in income tax laws,
royalties and incentive programs relating to the Trinidad oil and gas industry, fluctuations in interest rates,
and fluctuations in foreign exchange rates. The Company is subject to local regulatory legislation, the
compliance with which may require significant expenditures and non-compliance with which may result in
fines, penalties or production restrictions or the termination of licence, exploration, lease operating or
farm-in rights related to the Company’s crude oil and gas interests in Trinidad. Readers are cautioned that
the foregoing list of risk factors is not exhaustive. Additional information on these and other factors that
could affect the Company’s operations and financial results are included in reports on file with Canadian
securities regulatory authorities and may be accessed through the SEDAR website (www.sedar.com).
Management has included the above summary of assumptions and risks related to forward-looking
statements and other information provided in this MD&A in order to provide shareholders and investors
with a more complete perspective on the Company’s current and future operations, and such information
may not be appropriate for other purposes. Actual results, performance or achievement could differ
materially from that expressed in or implied by any forward-looking statements or information in this
MD&A, and accordingly, investors should not place undue reliance on any such forward-looking
statements or information. Further, any forward-looking statements or information speaks only as of the
date on which such statement is made, and Touchstone undertakes no obligation to update any forward-
looking statements or information to reflect information, events, results, circumstances or otherwise after
the date on which such statement is made or to reflect the occurrence of unanticipated events, except as
required by law, including securities laws. All forward-looking statements and information contained in this
MD&A and other documents of Touchstone are qualified by such cautionary statements. New factors
emerge from time to time, and it is not possible for Management to predict all of such factors and to
assess in advance the impact of each such factor on Touchstone's business or the extent to which any
factor, or combination of factors, may cause actual results to differ materially from those contained in any
forward-looking statements.
Non-GAAP Measures
The MD&A contains terms commonly used in the oil and natural gas industry, including funds flow from
operations, funds flow from operations per share, operating netback and net debt. These terms do not
have a standardized meaning prescribed under GAAP and therefore may not be comparable to similar
measures presented by other companies. Shareholders and investors are cautioned that these measures
should not be construed as alternatives to cash flow from operating activities, net earnings, net earnings
per share, total liabilities, or other measures of financial performance as determined in accordance with
GAAP. Management uses these non-GAAP measures for its own performance measurement and to
provide stakeholders with measures to compare the Company’s operations over time.
Funds flow from operations is an additional GAAP measure included in the Company’s consolidated
statements of cash flows. Funds flow from operations represents net earnings (loss) excluding non-cash
items. Touchstone considers funds flow from operations to be an important measure of the Company's
ability to generate the funds necessary to finance capital expenditures and repay debt. The Company
calculates funds flow from operations per share by dividing funds flow from operations by the weighted
average number of common shares outstanding during the applicable period.
The Company uses operating netback as a key performance indicator of field results. Operating netback
is presented on a total and per barrel basis and is calculated by deducting royalties and operating
expenses from petroleum sales. If applicable, the Company also discloses operating netback both prior to
realized gains or losses on derivatives and after the impacts of derivatives are included. Realized gains or
losses represent the portion of risk management contracts that have settled in cash during the period,
and disclosing this impact provides Management and investors with transparent measures that reflect
how the Company’s risk management program can impact netback metrics. The Company considers
operating netback to be a key measure as it demonstrates Touchstone’s profitability relative to current
commodity prices. This measurement assists Management and investors with evaluating operating
results on a historical basis.

The following table calculates operating netback for the periods indicated.

($000’s unless otherwise stated) December 31, December 31,
2019 2018 2019 2018
Petroleum sales 8,920 9,970 38,654 37,729
Royalties (2,650) (2,523) (10,986) (10,133)
Operating expenses (2,364) (3,607) (9,936) (10,858)
Operating netback 3,906 3,840 17,732 16,738
Production (bbls) 155,454 170,320 666,277 627,209
Operating netback ($/bbl) 25.12 22.55 26.61 26.68
The following table reconciles operating netback to funds flow from operations for the periods indicated.

2019 2018 2019 2018
Funds flow from operations 2,018 1,482 6,840 8,548
Other income (55) - (72) (375)
Expenses
G&A 1,805 1,840 5,935 5,929
Net finance (673) 616 316 1,435
Current income tax 1,114 425 5,368 1,855
Realized foreign exchange 10 (45) 3 (42)
Change in non-cash other (313) (478) (658) (687)
Decommissioning expenditures - - - 75
Operating netback 3,906 3,840 17,732 16,738
The Company closely monitors its capital structure with a goal of maintaining a strong financial position to
fund current operations and the future growth of the Company. The Company monitors working capital
and net debt as part of its capital structure to assess its true debt and liquidity position and to manage
capital and liquidity risk. Working capital is calculated as current assets minus current liabilities as they
appear on the consolidated statements of financial position. Net debt is calculated by summing the
Company’s working capital and the principal (undiscounted) amount of senior secured debt. The following
table summarizes working capital and net debt for the periods indicated.

($000’s)
2019 2018
Current liabilities 15,257 19,172
Working capital deficit 1,139 3,318
Principal non-current portion of term loan 15,364 11,004
Net debt 16,503 14,322

The following table reconciles total liabilities per the financial statements to net debt for the periods
indicated.

($000’s)
2019 2018
Total liabilities 54,933 53,889
Provisions - (125)
Lease liabilities (105) -
Decommissioning liabilities (11,547) (8,915)
Deferred income tax liability (13,289) (14,994)
Variance between carrying value and undiscounted value of term loan 629 321
Net debt 16,503 14,322
In the Company’s March 31, 2019, June 30, 2019 and September 30, 2019 management’s discussion
and analysis and related continuous disclosure documents, Touchstone included the non-current portion
of lease liabilities in its calculation of net debt. The Company amended its term loan on October 31, 2019,
which among other things, amended certain financial covenants in the term loan by excluding lease
obligations that were treated as operating leases under IFRS in effect as at December 31, 2018 (refer to
"Liquidity and Capital Resources – Term loan"). The Company has excluded the non-current portion of
lease liabilities in its calculation of net debt as at December 31, 2019, restating prior 2019 reporting
periods retrospectively. This change aligns with the Company’s revised monitoring of its capital structure.

Summary of Quarterly Results
The following is a summary of the unaudited quarterly results of the Company for the eight most recently
completed fiscal quarters.
December 31, September 30, June 30, March 31,

Three months ended
2019 2019 2019 2019
Average daily production (bbls/d) 1,690 1,729 1,768 2,121
Net wells drilled 0.8 0.8 - -
Brent benchmark price(1) ($/bbl) 63.17 61.95 69.01 63.10
Operating netback(2) ($/bbl) 25.12 24.56 26.85 29.35
($000’s except per share amounts)
Petroleum sales 8,920 9,011 9,708 11,015

Cash flow from (used in) operating
2,090 (1,205) 1,832 2,737
activities
Funds flow from operations(3) 2,018 1,082 1,310 2,430
Per share - basic and diluted(2)(3) 0.01 0.01 0.01 0.02
Net loss (3,549) (1,053) (833) (185)
Per share - basic and diluted (0.02) (0.01) (0.01) (0.00)
Exploration capital expenditures 5,838 3,234 681 360
Development capital expenditures 157 517 315 399
Total capital expenditures 5,995 3,751 996 759
Working capital deficit (surplus) 1,139 805 (2,062) (1,963)
Principal balance of term loan 15,364 11,328 11,459 11,235
Net debt(2) - end of period 16,503 12,133 9,397 9,272
Weighted average shares outstanding -
160,691 160,688 160,688 140,984
basic and diluted
Outstanding shares - end of period 160,703 160,688 160,688 160,688
Notes:
(1) Average for the quarterly periods indicated. Source: US Energy Information Administration.

December 31, September 30, June 30, March 31,
Three months ended
2018 2018 2018 2018
Average daily production (bbls/d) 1,851 1,758 1,717 1,543
Net wells drilled 3.0 3.0 3.0 2.0
Brent benchmark price(1) ($/bbl) 68.76 75.10 74.53 66.86
Operating netback(2) ($/bbl) 22.55 28.39 29.58 26.52
($000’s except per share amounts)
Petroleum sales 9,970 9,862 9,685 8,212

Cash flow from (used in) operating
1,810 831 4,711 (1,021)
activities
Funds flow from operations(3) 1,482 2,497 2,507 2,062
Per share - basic and diluted(2)(3) 0.01 0.02 0.02 0.02
Net earnings (loss) 552 199 (523) 130
Per share - basic and diluted 0.00 0.00 (0.00) 0.00
Exploration capital expenditures 1,603 443 334 177
Development capital expenditures 4,773 3,475 3,506 2,852
Total capital expenditures 6,376 3,918 3,840 3,029
Working capital deficit (surplus) 3,318 (1,568) (2,844) (3,818)
Principal balance of term loan 11,004 11,627 11,420 11,630
Net debt(2) - end of period 14,322 10,059 8,576 7,812
Weighted avg. shares outstanding - basic 129,021 129,021 129,021 129,021
Weighted avg. shares outstanding - diluted 130,532 130,728 129,021 129,692
Outstanding shares - end of period 129,021 129,021 129,021 129,021
Notes:
(1) Average for the quarterly periods indicated. Source: US Energy Information Administration.
Trends in net earnings and funds flow from operations are primarily associated with fluctuations in
revenues which reflect changes in production levels and commodity prices. In addition, net earnings and
total asset values are impacted by exploration asset and development property and equipment
impairments and reversals. The following significant items impacted the Company's financial and
operating results over the past eight quarters:
• In the fourth quarter of 2019, the Company recognized a reversal of $1.3 million in previously
accrued interest on income tax balances, which predominately led to the $0.9 million quarterly
increase in funds flow from operations. Touchstone recognized net $7.6 million of property and
equipment impairment expenses which were partially offset by a deferred tax recovery of $3.9
million, leading to a net loss of $3.5 million recognized in the quarter.
• The Company extended its term loan credit facility by C$5.0 million to drill its second Ortoire
exploration well in the quarter, thereby increasing net debt by 36% from the third quarter of 2019.
• In the third quarter of 2019, Touchstone drilled its first Ortoire exploration well. The investment led
to a 29% increase in net debt from the second quarter of 2019.
• In the second quarter of 2019, average daily production decreased by 16% from the first quarter
of 2019 as production from wells drilled in the fourth quarter of 2018 stabilized. The production

decline decreased funds flow from operations and increased the Company's net loss from the first
quarter of 2019.
• In the first quarter of 2019, flush production from wells drilled in the fourth quarter of 2018
increased average daily production by 15%, thereby increasing petroleum sales and funds flow
from operations and decreasing net debt from the previous quarter.
• In the fourth quarter of 2018, the Company drilled three net development wells and commenced
exploration activities on the Ortoire property, thereby increasing 2018 capital expenditures to $6.4
million and increasing net debt by $4.3 million. Touchstone recognized net $3.2 million of property
and equipment impairment reversals, leading to net earnings of $0.5 million recognized in the
quarter.
• In the second quarter of 2018, average daily production increased by 11%, reflecting new
production from year to date 2018 new drilling. Petroleum sales and funds flow in turn increased
by 18% and 22% from the first quarter of 2018, respectively, based on increased production and
a 5% increase in realized pricing.
Currency and References to Touchstone
All information included in this MD&A is shown on a United States dollar basis unless otherwise stated.
For convenience, references in this document to the "Company", "we", "us", "our", and "its" may, where
applicable, refer only to Touchstone.
Additional Information
Additional information regarding Touchstone Exploration Inc., including Touchstone’s Annual Information
Form, can be accessed online on SEDAR at www.sedar.com or from the Company’s website at
www.touchstoneexploration.com.

CORPORATE INFORMATION
DIRECTORS AUDITOR ABBREVIATIONS
John D. Wright Ernst and Young LLP The following is a list of abbreviations
Chairman of the Board Calgary, Alberta that may be used in this MD&A:
Port of Spain, Trinidad
Measurement
Paul R. Baay
bbls barrels
Kenneth R. McKinnon RESERVES EVALUATOR bbls/d barrels per day
Mbbl thousand barrels
Peter Nicol GLJ Petroleum Consultants Mcf thousand cubic feet

Ltd. Mcf/d thousand cubic feet per day
Stanley T. Smith Calgary, Alberta MMcf million cubic feet
MMcf/d million cubic feet per day
Thomas E. Valentine boe barrels of oil equivalent

LEGAL COUNSEL boe/d barrels of oil equivalent per
Harrie Vredenburg day
Norton Rose Fulbright LLP Mboe thousand barrels of oil
equivalent
Calgary, Alberta
EXECUTIVE OFFICERS London, United Kingdom Other
Paul R. Baay Nunez and Co. AIM AIM market of the London
Port of Spain, Trinidad Stock Exchange plc
President and Chief Executive Brent Reference price paid for
Officer crude oil FOB North Sea
C$ Canadian dollar
Scott Budau TRANSFER AGENT AND TSX Toronto Stock Exchange
REGISTRAR TT$ Trinidad and Tobago dollar
Chief Financial Officer
WTI Western Texas
Intermediate, the reference
James Shipka Computershare Trust price paid for crude oil and
Chief Operating Officer Company of Canada standard grade in U.S.
Calgary, Alberta dollars at Cushing,
Oklahoma
$ or US$ United States dollar
STOCK EXCHANGE £ Pounds sterling
LISTING NOMINATED ADVISOR AND
BROKER
Toronto Stock Exchange
London Stock Exchange AIM Shore Capital
Symbol: TXP London, United Kingdom
HEAD OFFICE PUBLIC RELATIONS
Touchstone Exploration Inc. Camarco

4100, 350 7thAvenue SW London, United Kingdom
Calgary, Alberta, Canada
T2P 3N9
OPERATING OFFICE
Touchstone Exploration
(Trinidad) Ltd.
#30 Forest Reserve Road
Fyzabad, Trinidad, W.I.


TXP MDA December 31 2019 FINAL

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Touchstone Exploration Inc.

Management’s Discussion and Analysis

December 31, 2019

TSX / LSE: TXP

About Touchstone Exploration Inc.

Touchstone’s strategy is to leverage Canadian experience and capability to international onshore

Touchstone Exploration Inc. 2

Three months ended Year ended

Petroleum sales 8,920 9,970 (11) 38,654 37,729 2

Touchstone Exploration Inc. 3

Subsequent events and outlook

Touchstone Exploration Inc. 4

Touchstone Exploration Inc. 5

Lease operatorship agreements

Touchstone Exploration Inc. 6

MEEI exploration and production licences

Private lease agreements

Crude oil marketing agreement

Touchstone Exploration Inc. 7

Three months ended Year ended

Net (loss) earnings

Touchstone Exploration Inc. 8

Touchstone Exploration Inc. 9

Net (loss) earnings and funds flow from operations sensitivity

Three months ended Year ended

Touchstone Exploration Inc. 10

Three months ended Year ended

Realized crude oil pricing (excluding derivative contracts)

Three months ended Year ended

Touchstone Exploration Inc. 11

Three months ended Year ended

Commodity price financial derivatives

Touchstone Exploration Inc. 12

Three months ended Year ended

Touchstone Exploration Inc. 13

Three months ended Year ended

General and administrative expenses ("G&A")

Three months ended Year ended

Touchstone Exploration Inc. 14

Three months ended Year ended

Touchstone Exploration Inc. 15

Foreign exchange and foreign currency translation

Three months ended Year ended

Touchstone Exploration Inc. 16

Depletion and depreciation expense

Three months ended Year ended

Touchstone Exploration Inc. 17

Impairment of non-financial assets

Exploration asset impairments

Three months ended

Touchstone Exploration Inc. 18

Three months and year ended

Decommissioning liabilities and abandonment fund

Touchstone Exploration Inc. 19

Touchstone Exploration Inc. 20

Three months ended Year ended

Touchstone Exploration Inc. 21

Year ended December 31,