Private Placement And Retail Offer

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A BREACH OF THE RELEVANT SECURITIES LAWS OF SUCH JURISDICTION. NO SECURITIES OF THE COMPANY ARE BEING OFFERED TO ANY PERSON RESIDENT IN CANADA OR OTHERWISE SUBJECT TO THE SECURITIES LAW OF ANY JURISDICTION OF CANADA.

TOUCHSTONE EXPLORATION ANNOUNCES £6.32 MILLION (US$8.44 MILLION) PRIVATE PLACEMENT AND RETAIL OFFER OF UP TO £0.68 MILLION (US$0.91 MILLION)

CALGARY, ALBERTA (October 24, 2025) - Touchstone Exploration Inc. ("Touchstone" or the "Company") (TSX, LSE: TXP) announces that it has conditionally raised £6.32 million (approximately US$8.44 million) by way of a private placement of 57,454,545 new common shares in the Company with no par value ("Common Shares") to certain new and existing investors (the "Placing") at a price of 11 pence (approximately C$0.206) per Common Share (the "Placing Price").

The Company is proposing to raise up to an additional £0.68 million before expenses (approximately US$0.91 million) by way of a retail offer to its existing shareholders via the Bookbuild Platform (the "Retail Offer") of up to 6,181,818 new Common Shares at the Placing Price (together with the Common Shares issuable under the Placing, the "Offered Shares"). A separate announcement will be made regarding the Retail Offer and its terms. For the avoidance of doubt, the Placing is separate from, and does not form part of, the Retail Offer.

The Company intends to use the net proceeds of the Placing, together with any funds raised under the Retail Offer, to continue its revised 2025 capital program and to satisfy the remaining equity raising requirement under the Company's Fourth Amended and Restated Loan Agreement with Republic Bank Limited (the "Loan Agreement").

Pursuant to the Placing, a new investor, Purebond Limited, and certain existing investors have agreed to subscribe for 57,454,545 new Common Shares at the Placing Price, to raise gross proceeds of £6.32 million (approximately US$8.44 million). The Placing Price represents a 2.2 percent discount to 11.25 pence, which was the closing price of the Common Shares on the AIM market ("AIM") of the London Stock Exchange on October 23, 2025.

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

Use of Proceeds

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

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

"This financing fully satisfies our outstanding obligations under our Loan Agreement, positioning us to advance our 2025 capital investment program focused on high-return projects, including drilling on the recently acquired Central block and the installation of the Cascadura compressor.

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

Admission of the Offered Shares

Application has been made for the Offered Shares to be admitted to trading on the Toronto Stock Exchange ("TSX") and AIM ("Admission"). Subject to the receipt of required approvals from the TSX and AIM, the Offered Shares are expected to be issued and admitted to trading at or before 8.00 a.m. (London time) on October 30, 2025.

The Placing is conditional on, among other things, Admission becoming effective (including final approval for the listing of the Offered Shares on the TSX) and the placing agreement entered into between the Company and Shore Capital in connection with the Placing not being terminated in accordance with its terms. The Common Shares to be issued pursuant to the Placing will, when issued, represent approximately 18 percent of the total share capital of the Company on Admission (before the issue of any Common Shares pursuant to the Retail Offer). Shore Capital acted as broker in connection with the Placing.

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

Update on May 8, 2025 Private Placement

On June 30, 2025, Touchstone Exploration Inc. announced that £10,324,500 of the £15,375,000 gross proceeds had not been received as of the TSX‑approved closing deadline of June 27, 2025. As a result, the Company closed on £5,050,500 in gross proceeds and issued 24,636,585 Common Shares.

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

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

Updated Guidance

On August 14, 2025, the Company announced its revised 2025 operational and financial guidance (the "Revised Guidance"). Following the incorporation of the Central block assets and the development activities at Cascadura reported on September 29, 2025, Touchstone provides the following updates to the Revised Guidance.

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

For further details regarding the Company's Revised Guidance and the related advisories (which are incorporated by reference herein), please refer to the Company's news release dated August 14, 2025 titled "Touchstone Exploration Announces Second Quarter 2025 Results", available on the Company's profile on www.sedarplus.ca and on its website at www.touchstoneexploration.com.

Touchstone Exploration Inc.

For further information about Touchstone, please visit www.touchstoneexploration.com or contact:

Touchstone Exploration Inc.

Paul Baay, President and Chief Executive Officer Tel: +1 (403) 750-4405

Scott Budau, Chief Financial Officer

Shore Capital (Nominated Advisor and Joint Broker)

Daniel Bush / Toby Gibbs / Tom Knibbs Tel: +44 (0) 20 7408 4090

Canaccord Genuity (Joint Broker)

Adam James / Charlie Hammond Tel: +44 (0) 20 7523 8000

FTI Consulting (Financial PR)

Nick Hennis / Ben Brewerton Tel: +44 (0) 20 3727 1000

Advisories

Currency

Unless otherwise stated, all financial amounts referenced herein are expressed in British pounds sterling ("£"). For reference purposes only, one British pound has been translated into United States dollars ("US$") at a rate of £1.00 = US$1.40, and one British pound has been translated into Canadian dollars ("C$") at a rate of £1.00 = C$1.87.

Non-GAAP Financial Measures

This announcement references non-GAAP financial measures and capital management measures as such terms are defined in National Instrument 52-112 Non-GAAP and Other Financial Measures Disclosure. Such measures are not recognized measures under Canadian Generally Accepted Accounting Principles ("GAAP") and do not have a standardized meaning prescribed by IFRS Accounting Standards as Issued by the International Accounting Standards Board ("IFRS") and therefore may not be comparable to similar financial measures disclosed by other issuers. Readers are cautioned that the non-GAAP financial measures referred to herein should not be construed as alternatives to, or more meaningful than, measures prescribed by IFRS, and they are not meant to enhance the Company's reported financial performance or position. These are complementary measures that are commonly used in the oil and natural gas industry and by the Company to provide shareholders and potential investors with additional information regarding the Company's performance. Below is a description of the non-GAAP financial measures and capital management measures disclosed herein.

Capital expenditures

Working capital and net debt

Working capital and net debt are capital management measures used by Management to monitor the Company's capital structure to evaluate its true debt and liquidity position and to manage capital and liquidity risk. Working capital is calculated as current assets minus current liabilities, based on the amounts presented in the applicable consolidated balance sheet. Net debt is determined by adding the Company's working capital to the principal (undiscounted) long-term balances of its senior secured debt and convertible debenture. Net debt is most directly comparable to total liabilities as disclosed in the Company's consolidated balance sheets.

For further information, please refer to the "Advisories - Non-GAAP Financial Measures" section of the Company's most recent Management's discussion and analysis for the three and six months ended June 30, 2025 accompanying our June 30, 2025 unaudited interim condensed consolidated financial statements, both of which are available online under the Company's profile on SEDAR+ (www.sedarplus.ca) and on the Company's website (www.touchstoneexploration.com). Touchstone's Management's discussion and analysis is incorporated by reference herein and includes further discussion of the purpose and composition of the specified non-GAAP financial measures consistently used by the Company and detailed reconciliations to the most directly comparable GAAP measures.

Oil and Natural Gas Measures

To provide a single unit of production for analytical purposes, natural gas production has been converted mathematically to barrels of oil equivalent. The Company uses the industry-accepted standard conversion of six thousand cubic feet of natural gas to one barrel of oil (6 Mcf = 1 bbl). The 6:1 boe ratio is based on an energy equivalent conversion method primarily applicable at the burner tip. It does not represent a value equivalency at the wellhead and is not based on either energy content or current prices. While the boe ratio is useful for comparative measures and observing trends, it does not accurately reflect individual product values and might be misleading, particularly if used in isolation. As well, given that the value ratio, based on the current price of crude oil to natural gas, is significantly different from the 6:1 energy equivalency ratio, using a 6:1 conversion ratio may be misleading as an indication of value.

Product Type Disclosures

This announcement includes references to crude oil, NGLs, crude oil and liquids, natural gas, and average daily production volumes. Under National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities ("NI 51-101"), disclosure of production volumes should include segmentation by product type as defined in the instrument. In this announcement, references to "crude oil" refer to "light crude oil and medium crude oil" and "heavy crude oil" combined product types; references to "NGLs" refer to condensate and propane; and references to "natural gas" refer to the "conventional natural gas" product type, all as defined in the instrument. In addition, references to "crude oil and liquids" herein include crude oil and NGLs.

The Company's estimated average 2025 midpoint production disclosed herein consists of the following product types as defined in NI 51-101 using a conversion of 6 Mcf to 1 boe where applicable.

For further information regarding specific product disclosures in accordance with NI 51-101, please refer to the "Advisories - Product Type Disclosures" section of the Company's most recent Management's discussion and analysis for the three and six months ended June 30, 2025 accompanying our June 30, 2025 unaudited interim condensed consolidated financial statements, both of which are available online under the Company's profile on SEDAR+ (www.sedarplus.ca) and on the Company's website (www.touchstoneexploration.com).

Abbreviations

The following abbreviations may be referenced in this announcement:

bbl(s) barrel(s)

bbls/d barrels per day

boe barrels of oil equivalent

boe/d barrels of oil equivalent per day

Mcf thousand cubic feet

Mcf/d thousand cubic feet per day

NGL(s) natural gas liquid(s)

UK Product Governance Requirements

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK MiFIR Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK MiFIR Product Governance Requirements) may otherwise have with respect thereto, the Placing Shares have been subject to a product approval process, which has determined that the Placing Shares are: (i) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in paragraphs 3.5 and 3.6 of COBS; and (ii) eligible for distribution through all permitted distribution channels (the "Target Market Assessment").

Notwithstanding the Target Market Assessment, distributors should note that: the price of the Placing Shares may decline and investors could lose all or part of their investment; the Placing Shares offer no guaranteed income and no capital protection; and an investment in the Placing Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the Placing.

For the avoidance of doubt, the Target Market Assessment does not constitute: (a) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of COBS; or (b) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the Placing Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the Placing Shares and determining appropriate distribution channels.