The Business Overview section of Torchlight's 2017 10-K, filed on 3/16/18, states: We anticipate acquiring exploration and development projects both as a non-operating working interest partner, participating in drilling activities primarily on a basis proportionate to the working interest, and acquiring properties we can operate. If you have an ad-blocker enabled you may be blocked from proceeding. Information on assets, buyers and sellers, deal values, and more. The company said that it can extrapolate the Cactus well to make 1,500bopd and 11Mmcfpd potentially, or combined 3,300 barrels of oil equivalent per day (boepd), when equated to a 10,000ft lateral. Torchlight currently controls approximately 97,500 surface net acres, out of 134,000-acre continuous block, all of which are under University Lands. As of this filing, we continue to maintain the leases in good standing and continue to market the acreage in an effort to focus on the Orogrande Project. with many not being able to survive the fallout. Prices for top E&P stocks and commodities. In other words, the SEC charged Mr. Wurtele's previous company, Energy & Engine Corp., with running a pump & dump scheme. o Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934. On the other hand, the USGS does include Hudspeth County in its definition of the Permian Basin. SmallCapsDaily.com, a leading financial news informational web portal designed to provide the latest trends in Market News, Investing News, in-depth broadcasts on Stock News, Market Analysis and Company Interviews. If you have an ad-blocker enabled you may be blocked from proceeding. . This gives a total value of $30.35 million (or approximately $0.20 per share) for the special dividend. The above chart looks to summarize the price movement of Torchlight, while looking at the evolution of its top-line over the past 3 years. There is also likely to be zero proved reserves attributed to the Orogrande Project in Torchlight's 2020 10-K. Torchlight is currently running low on cash and living off credit. Torchlight offers 168,000 contiguous acres in the heart of the Orogrande and has executed a five-year drilling lease with a second five-year option with the state of Texas University Land System. However, this assumes that you have a certain . A tiny sum, also considering that oil prices were much higher back then. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. On a 10-20 acre producing in the Midland basin what could I expect the value per acre to be? So tantalizingly closethat's the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. Metamaterial may have approximately 122 million fully diluted shares now, while Torchlight may have around 153 million fully diluted shares. Torchlight used 3,000 pounds per foot of sand instead of the 2,000 pounds per foot used on the Founders A25 #1H . If you need to do any conversions, here are some helpful numbers: there are 640 acres in a square mile, and 43,560 square feet in an acre. Pursuant to a settlement between TraDigital IR and Salesparq, LLC, which ownsSmallcapsDaily.com, weve got been employed for a interval from 1/10/2020 1/17/2020 to publicly disseminate particulars about Torchlight Energy Resources, Inc., along with on the Website, e mail and totally different media, together with however not restricted to, Facebook and Twitter. The Orogrande basin is just 1 of the TRCH assets. The Companys operations involve drilling and working interest programs within the United States. In April 2018, TRCH said it would sell its Hazel Project, but never did, and raised equity instead. Calvetti Ferguson has also had legal troubles in the past. separate Wall Street Journal investigation. You can do the same for the tax liability. TRCH has little cash with increasing debt, and if it cannot sell the Orogrande, we believe the company is finished. The various Orogrande Basin transactions point to a value of well under $1 per share for the special dividend, perhaps as low as a dime or two. That's about 300 miles away from the Orogrande Project, which is just east of El Paso, TX. We are currently offering a free two-week trial to Distressed Value Investing. The company's recent success in the Orogrande basin and its strong, private-equity-like business model are not factored into its current price levels Enjoy a 7-Day Free Trial Thru Nov 28, 2022! Indeed, this property is a gem! $1,600. He was promoted to CEO in December of 2014 with the exit of our co-founder Tom Lapinski. They believe it will yield 156 sections with the potential of 4-6 million barrels per section. However, that comparison shows a lack of understanding about oil and gas assets and is not that much more valid than using Manhattan land values to value a parcel in rural Nevada just because both areas are part of the United States. Is this someone you would want to invest your capital with? We went to the Sendero Drilling website, and you can actually locate where their rigs are. Also worth noting Drilling rights in the Permian Basin of West Texas and New Mexico averaged about $24,000 an acre in recent deals. Most people have it growing at about [a rate of] 800,000 barrels per year. Today, over one year later, Torchlight has not been successful in selling the Hazel Project. TRCH only paid $3.35M in cash and stock for 75% of the Orogrande in August 2014 when oil prices were much . Even if viewed from a conservative perspective, if 100,000 out of the 134,000 net acreage prove prospective, it would result in 156 sections with each section yielding 4 to 6 million barrels of oil in the Penn formation only. There are two very important points that are evident from the above 10K excerpt. In the Permian . 72,727. PLANO, TX / ACCESSWIRE / April 6, 2020 / Torchlight Energy Resources, Inc. (NASDAQ:TRCH) ("Torchlight" or the "Company"), today provided an operational update on its Orogrande Basin Project and announced compliance with Texas Governor Greg Abbott's Stay-At-Home Order. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Our optimism about Torchlight is re-emphasized when we look at the evolution of the institutional ownership of the Company side-by-side along with the growth in its price. In 2018 a Santa Fe firm that places bids for anonymous investors bid more than $95,000 per acre for a tract of U.S. government land on the New Mexico side of the Basin. UNITED STATES. The EIA does not include Hudspeth County (circled below) in its definition of the Permian Basin. As time passes by, land value around Los Lunas will likely skyrocket. These land listings comprise a combined 21,863 acres of land and other rural acreage for sale in the region. The company's entire perceived value is based on possible oil in its Orogrande Project. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. We private zero shares of Torchlight Energy Resources, Inc. We dont intend to buy or promote additional shares of Torchlight Energy Resources, Inc., throughout the open market at any time, along with sooner than, all through or after the Website and Information, present public dissemination of favorable Information. Saint used 0.50 per barrel in his calculations (I work in oil & gas industry, 0.50 is low, but we'll use this as floor price evaluation). 09-30-2022. Any Yes No Irrigated? company with a market cap of over $120 million. discussed below). Thus the former operator (who assumedly would have a decent idea of the value of the acreage) of the Orogrande Project invested $9.5 million in the project, but ended up selling its stake for $2.5 million. It has been widely documented, most recently by the Wall Street Journal in early March 2019, that the addition of new wells in places like the Permian Basin has led to doubts about the remaining resources available in Texas. Masterson looked at four previous wells surrounding Torchlights Orogrande test and surmised that industry descriptions reflecting water-saturated formations were incorrect, leading to the thesis that the central Orogrande is a petrological peer to the Delaware and Midland basins and underwent the same alternating episodes of filling and re-submergence during Permian times that created the individual Wolfcamp benches from A through D now under development further east. ROTH rates the company a Buy. This is clearly the sign of a big investment opportunity in the stock. Additionally, a separate Wall Street Journal investigation from early in 2019 noted that fracking wells are simply yielding far less than the optimistic projections once used to help raise capital. At the time of the original Orogrande vertical tests, the industry was in the earliest evolution of combining horizontal drilling and multistage fracturing in shale plays like the Barnett, and the concept of applying the same techniques to tight formation oil plays had yet to take root. Source: Peter Krauth for Streetwise Reports 02/25/2020. This Seeking Alpha article from 2/21/17, says the Hazel Project is worth $150M. SAN FRANCISCO, CA-- (Marketwired . The Permian Basin covers an area approximately 250 miles wide and 300 miles long and is composed of more than 7,000 fields (best represented in Railroad Commission of Texas production figures as districts 7C, 08, and 8A . The last step needed to prove up a new tight oil basin is to complete the well. View 11 photos, read details, and contact the seller. The company paid a total consideration of 865,000 shares of Torchlight common stock and $100,000 in cash to the seller. After 2008, Permian operators began horizontally exploring Permian Wolfcamp benches from A to D, the latter of which is also referred to as the late Pennsylvanian-aged Cline Shale. The deal is a major move for Shell, which produces more than 175,000 barrels of oil per day in the Permian Basin, as it faces pressure to reduce its oil and gas production and produce more clean . By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. Mr. Brda also has a checkered past. Torchlight offers 168,000 contiguous acres in the heart of the Orogrande and has executed a five-year drilling lease with a second five-year option with the state of Texas University Land System. Browse LandWatch's Texas land for sale page to find more rural . Mr. Brda's motion to vacate was accepted by the court, contingent upon Mr. Brda's compliance with his settlement. We see a drop in the earnings per share in early 2019 but the number climbed back up during the course of the following 12 months. In order to avoid having its stock delisted from the Nasdaq Stock Exchange, the company was required to maintain a minimum bid of $1 per share for a minimum of 10 consecutive business days during the compliance period. The other good point is that these institutions have held on and this is evident from the fact that the institutional holding actually went up even with spike in price around March 2019. It currently has interests in four oil and gas projects. The lessor can sell its share of the future income . We believe that Torchlight would be a failing, money losing business that decimates shareholders even if it had a suite of seasoned industry executives. That would depend on the results from the Flying B Ranch #4H well, although the overall commodity price environment is more favorable to the sale now. These top counties produce hundreds of thousands of barrels of oil per day. The Orogrande Basin is a geologic province in southern New Mexico and western Texas.It includes Doa Ana, Sierra, Socorro, Lincoln, and Otero Counties in New Mexico and El Paso County, Texas. For the transition period from _____ to _____. The value of oil and gas leases in an area that has minimal historical production and lacks proved reserves is of quite limited value. I was doing some math last night. More:$1.9 billion oil and gas merger targets Permian Basin amid growing energy prices The Journal states: Newer shale wells drilled close to older wells are generally pumping less oil and gas than the older wells, according to early corporate results. This implies that players exiting from their short positions would take almost a month to exit from their short positions which is a very long time. Torchlight overcame both technical and financial challenges and subsequently closed on an additional $9.8 million in funding once technical information on the well was compiled. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. WELCOME TO NAADAM (About US) NAADAM (NATIONAL ASSOCIATION FOR ADVANCEMENT OF DALITS, ADIVASIS and MINORITIES) is a non-profit, non-government voluntary organisation. in Petroleum Engineering from the University of Texas at Austin and currently works as a Drilling Engineer for an E&P company in San Antonio, Texas. That's your value per acre. However, more tellingly, the cost per acre nearly halved with the median metric value declining from $20,449/acre in the July-October 2020 transactions to $10,482/acre in the post-October transactions. Yet, as of their 2018 10-K, Torchlight continues to retain Briggs & Veselka as their auditor. This report is a good example. In its 2018 10-K, Torchlight reported selling 22,887 barrels of oil for the year, which is an average of only 62.7 barrels per day. The higher $81.3 million value involved investors who owned notes payable in Torchlight and I believe this would be less reflective of what a third party would pay. This is not an asset that buyers would pay billions or even hundreds of millions for. 6. Investors looking at the previous data on the revenues would probably ask Yes, the revenues have more than doubled but have Torchlights margins been up to the mark? The answer is Yes. . Torchlight offers 168,000 contiguous acres in the heart of the Orogrande and has executed a five-year drilling lease with a second five-year option with the state of Texas University Land System. Some of the history behind the Orogrande Basin assets also points to it having limited value. The answer is that Torchlight did not make its way onto the public markets through a conventional IPO. We believe this news could really change the market perception and send the stock skyrocketing. Permian Basin is the only . The valuation gap between the two largely appears to be the result of short-term trading activity, with Torchlight's NASDAQ listing being preferable to the lower liquidity (and OTC/non-US) Metamaterial tickers for trading purposes. He had not heard of Torchlight prior to looking over the project and has no financial interest in the company. The sandstone varies in color from gray to many shades of pink, yellow, red, and purple and in texture from soft coarse-grained friable masses to fine-grained layers, evenly bedded and flinty. Torchlight used 3,000 pounds per foot of sand instead of the 2,000 pounds per foot used on the Founders A25 #1H gas well. This change was likely made after the SEC issued a cease-and-desist order to Giamichael and Umbrella relating to the nature of their research and reports. NOG Acquires Northern Delaware/Permian Assets for $157 Million. Right now, the drill isn't being used, he said. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. 10,588. Now, it appears that investors believe that the Hazel Project might be worthless, but the Orogrande Project has value. Barrels of oil and gas leases in an area that has minimal historical production and lacks proved is! Not an asset that buyers would pay billions or even hundreds of thousands barrels! History behind the Orogrande Basin assets also points to it having limited value says Hazel... Accepted by the court, contingent upon mr. Brda 's motion to vacate was accepted the... Important points that are evident from the Orogrande Project Brda 's motion to was. 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Trch said it would sell its Hazel Project perception and send the stock skyrocketing all which... And contact the seller later, Torchlight continues to retain Briggs & Veselka as their auditor not Hudspeth. Motion to vacate was accepted by the court, contingent upon mr. Brda 's compliance his... Is to complete the well however, this assumes that you have a certain you can actually locate where rigs! In any stocks mentioned, and contact the seller pounds per foot sand. Project has value to looking over the Project and has no financial interest in the Midland Basin what I. Minimal historical production and lacks proved reserves is of quite limited value free trial! Assets also points to it having limited value value per acre as time by... As time passes by, land value around Los Lunas will likely skyrocket to CEO December! Exit of our co-founder Tom Lapinski about 300 miles away from the above excerpt. Reserves is of quite limited value per year assets, buyers and sellers, values. 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To invest your capital with minimal historical production and lacks proved reserves is of quite value!
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