It currently has interests in four oil and gas projects. Founded in 2010, Torchlight Energy is largely involved in the acquisition, exploration, and development of oil and natural gas properties in the United States. View 11 photos, read details, and contact the seller. The province takes its name from the community of Orogrande, New Mexico.. Geology. The newer shale wells often interfere with the output of older wells, because blasting too many holes in dense rock formations can damage nearby wells and lower the overall pressure, making it harder for oil to seep out. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Despite that, the prices of some shale plays has held up, the Houston Chronicle reported. . Mr. Brda's motion to vacate was accepted by the court, contingent upon Mr. Brda's compliance with his settlement. 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). Internal data records about $22 million of land listings for sale in Hudspeth County, Texas. During initial measurements, the Cactus well produced a peak rate of 15 barrels of oil per day and 110 mcf of gas per day fram a comparatively small, 100-foot horizontal completion. The petrophysics . Permian Basin is the only . I have no business relationship with any company whose stock is mentioned in this article. 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. AGAIN that is just 1 of their two sites, I am not even talking about the midland basin yet. Wed, 09/24/2014 - 08:59 AM. As the company discloses in an 8-K filing with the SEC, Torchlight was given 180 days to regain compliance with Listing Rule 5550(A)(2), which requires the company to maintain a minimum bid of $1 per share. Certainly much less value than what some social media posts estimate. What is the point of paying auditors who have a concerning history? The average price of land listings and ranches for sale here is $96,515. 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. Kramer had a cease-and-desist order entered against him for violations of Sections 5(A) and 5(C) of the Securities Act for selling stock to the investing public in violation of registration requirements. The management ensured the installation of tubing and an electric submersible pump which is designed to move as much as 500 barrels of liquid each day which is significantly above what the well has been producing (around 160 to 180 barrels per day with an almost 15% load recovery). Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. Orogrande which is comparatively their largest project, has not seen any development and is the big game changer. Please. These calculations tend to mention the value of prime Permian Basin acreage when discussing Torchlight's Orogrande Basin acreage. Torchlight spent a bit over $3 million for the Orogrande Project acreage back in 2014 and has done a modest amount of exploration work on it since then. He noted that the 3.678 billion barrel estimate touted by the company is actually referring only to possible reserves. . Based on this opinion, as well as the overall shift in investor sentiment in the Permian Basin, we do not believe Torchlight will be able to successfully complete the sale of the company or its asset(s). Home-based cardiac rehabilitation may help people live longer, Woodside Credit Becomes Official Sponsor of The Amelia, Hagertys Award-Winning Motoring Event, SUNSHINE BIOPHARMA SIGNS EXCLUSIVE WORLDWIDE LICENSE WITH UNIVERSITY OF ARIZONA FOR PLpro-BASED COVID-19 TREATMENT, Depression & anxiety symptoms linked to vaping nicotine and THC in teens and young adults, Splash Beverage Reaches Agreement with Three Distributors Bringing SALT Tequila to Significant Portions of New York State, OKYO Pharma Announces Custom Clearance of GMP Packaged OK-101 Drug to be Used in Phase 2 Clinical Trial for Treating Dry Eye Disease, Regence and Equip partner to offer virtual eating disorder treatment for people aged 6 to 24, Bubblr Inc. Northern Oil and Gas, Inc. Alpha Energy Partners. 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. It could go either way at this point. One intriguing angle is that the geologic processes that occurred in the Midland and Delaware basins, and which are now confirmed in the Orogrande, also extend into northern Mexicos Pedregosa Basin. This would result in a value of $0.62 per share for the oil and gas assets. Despite having only three years of experience in the field, he has worked in drilling, production and reservoirs throughout south west Texas, most notably contributing to the Eagle Ford Shale Project, which is currently the most active shale play in the world with over 100 active rigs. There is little doubt over the fact that Torchlight is being underfollowed and undervalued by the market. Right now, the average price for a loaf of bread is, approximately, $1.87. 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. However, analysts are expecting to range from anywhere between $1 per share and $20 per share. Torchlight again has a 12.5% working interest in this project and management is looking forward to some excellent offset production in Winkler County by the likes of Jagged Peak and Felix Energy. Based on an analysis by Mike Mullen, president and founder of Stimulation Petrophysics Consulting, the Orogrande basin has a recoverable reserves estimate of 3.7 billion barrels of oil equivalent, the Plano, Texas-based company said. These land listings comprise a combined 21,863 acres of land and other rural acreage for sale in the region. in Finance from Southern Illinois University, Carbondale, IL.". Reproduction in whole or in part, in any form or medium without express written permission is prohibited. The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. Some of you might recall the first 1000' horizontal test well they drilled in 2018, which showed initial production of 2.2 million cubic feet of natural gas per day, and had a sustained rate of 1.2 . in Finance from Southern Illinois University, Carbondale in 1988, he does not appear to have any experience in the oil and gas sector, nor does he list the "20 years of investment banking experience" that Torchlight touts on their website. 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. Suddenly, Torchlight's sole focus is the sale (or "monetization") of its early stage projects, including the Orogrande Project. Keyword Property ID. As shown, #11 is nearby Midland and Odessa, TX. $1,600. As time passes by, land value around Los Lunas will likely skyrocket. Within Radius. 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. 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. 09-30-2022. The province is named for the Orogrande Basin, which was a shallow marine basin during the Carboniferous. This would make it very easy for the Company to transport the oil and gas from the facility and would reduce transportation costs. SECURITIES AND EXCHANGE COMMISSION. 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. 72,727. Those horizontal efforts have grown to encompass the Bone Spring in the Delaware Basin and the Spraberry in the Midland Basin. Torchlight Energy Resources Inc said on Tuesday it struck oil and gas at one of its development wells in the Orogrande basin in West Texas. Please disable your ad-blocker and refresh. Institutions have quietly accumulated the stock and it is a matter of time before the Company delivers a solid result making the stock price go through the roof. 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. Given those numbers, a reasonable question may be: how did this company make it through the in-depth due diligence the SEC requires for IPOs? We had an independent petroleum engineer review Torchlight's reserve estimate report. separate Wall Street Journal investigation. 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. Torchlight's price remains quite high by this measure, although some of the gap has closed. This info is straight from https://www.torchlightenergy.com/current-projects/orogrande-basin, https://www.torchlightenergy.com/current-projects/orogrande-basin. //www.accesswire.com . 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. The initial test was earmarked as a $1.5 million effort, but tricky drilling through cavernous stratigraphy and a painstaking effort to develop data for scientific evaluation in a remote part of West Texas boosted well costs to $3.5 million. Consists of 1,000 to 2,000 feet of sandstone, shale, earthy limestone, and gypsum. 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 . . 21.3 Acres W/ Mineral Rights! Likewise, the Marcellus Shale lease can generate as much as $4,800 per net acre. Torchlight's reserves at the end of 2019 were entirely attributable to its Winkler asset. Such efforts by the management to improve the efficiency of extraction will go a long way in reducing the indirect costs and improving the profitability and shareholder value in the long term. According to Torchlight's 2012 10-K (and not mentioned in the other 10-Ks): Involvement in certain legal proceedings. The Hazel Project is located in Irion, Sterling and Tom Green counties. Ready to build zoned SR-43 (single family residential) lot. Metamaterial's stock is up around 36% since that report, while Torchlight's stock is down around 38% over the same period. What we interpret Torchlight's above statement to mean is it has done all it can with its other projects, nothing came from them, and now, the only worthwhile project it has left to devote its effort and capital to is the Orogrande. The report, prepared by Stimulation Petrophysics Consulting, estimated a reserve potential of 3.678 billion barrels in the basin - an incredible stroke of luck for a company that has never had a quarter in which it produced more than 200 barrels of oil per day. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. We believe this news could really change the market perception and send the stock skyrocketing. And, the Orogrande is all that Torchlight has. . This is just a rough estimate based on the latest information I found, but if accurate it still points to Metamaterial's shares being significantly cheaper than Torchlight's shares if one wanted to invest in the new company. However, according to Mr. Brda's own LinkedIn page, his background is quite different from the one described above. The company's entire perceived value is based on possible oil in its Orogrande Project. The area has 19 contiguous sections with a potential of as many as 300 horizontal drilling locations and a potential to generate 4 to 6 million barrels per section. If one wants to be very bullish on the asset, the $81.3 million value (from the notes payable conversion) can be used instead. WTI crude prices have been well below $40 per barrel for most of the year. At every small dip in the price, hedge funds, mutual funds, and all forms of institutional owners have literally jumped at the opportunity to average their investments in the stock. One of the central goals of the research Smallcaps Daily conducts is to provide our readers with hidden small cap gems that are growing in terms of revenues and profitability in markets with a very high potential. Any Yes No . Note: We have contacted Torchlight's Investor Relations ("IR") regarding Torchlight's questionable past and have integrated their response in this article. In July, Oneok Partners announced an expansion of its West Texas system to supply future gas to Mexico. Orogrande is easily the largest project of Torchlight as it has a net acreage of around 134,000 with the Company having a 72.5% working interest in the project. There were some contingences that need to be completed with Universi. Especially when all the infrastructure is already built. The Permian-Delaware basin is still valued at $30,000 per . While he did graduate with a B.S. If those entreaties fail, Torchlight has acreage in Oklahoma, Kansas and the Texas Eagle Ford it can sell to generate funds for a completion, though the company prefers to partner with larger firms that have proven Permian horizontal completion experience. Torchlight is targeting operators with successful Delaware Basin horizontal experience to join in as a 50/50 partner to complete the test. It is also probably the most talked about project of Torchlights especially after the management announced the completion of the Cactus A35 #1H drilling. For making specific funding picks, readers ought to go looking their very personal suggestion. @article{osti_5237336, title = {Don't ignore the Orogrande; its potential is promising}, author = {Pyron, A J and Gray, J M}, abstractNote = {Formed contemporaneously with the Delaware and Midland basins of West Texas and holding a stratigraphic record and depositional history remarkably similar to these two productive basins, the Orogrande basin in south-central New Mexico has great potential . Medoff was later barred by the SEC because he "sold a company's unregistered stock to the public through the use of materially false and misleading documents" and "ma[king] misrepresentations to investors about the progress and results of clinical trials for BioChemics' product and misled investors about valuations of BioChemics that were purportedly prepared by reputable independent investment banks.". With the play consisting of 134,000 acres . Torchlight Energy's peak 24-hour production rates to date stand at 15 barrels of oil per day (bopd) and 110 million cubic feet per day (Mmcfpd). Added to that would be any proceeds from an Orogrande Basin sale. Such efforts by the management to improve the efficiency of extraction will go a long way in reducing the indirect costs and improving the profitability and shareholder value in the long term. Price Per Acre. 6. As the article shows, in the past, some investors had the belief that the Hazel Project had value, but the Orogrande Project might be worthless. I am not receiving compensation for it (other than from Seeking Alpha). Torchlight has attracted a fair bit of attention on social media as it heads towards a merger with Metamaterial. It is my understanding that this is misinformation. Washington, D.C. 20549 . Multiply $750m barrels * $73 current price per barrel and you get almos $57 BILLION DOLLARS WORTH OF OIL. For example, one Torchlight share is currently $2.29 USD (perhaps $2.08 USD net of the value of its oil and gas properties as discussed below). In Arizona, the price is about . However, this assumes that you have a certain . Salesparq, LLC which ownsSmallcapsDaily.comisnt registered with any financial or securities regulatory authority and doesnt present nor claims to produce funding suggestion or recommendations to readers of this launch. This high desert ranch country is punctuated by volcanic intrusions and uplifts that give it a distinctly western landscape. The price per acre for the Midland Basin was about $17K. Thus, comparisons to prime Permian acreage values (or even to the value of lesser Permian acreage such as the Hazel Project) are unfounded. We are currently offering a free two-week trial to Distressed Value Investing. The Orogrande Project has zero proved reserves and zero commercial production. Under a new law proposed by House Republicans, that price would go up to more than $2.50. New technologies, such as diverting agents, microfracturing, coil-tipping fracks, and digitalization can increase production in the Permian. This Seeking Alpha article from 2/21/17, says the Hazel Project is worth $150M. The second big point is the positive gross margin. I have no business relationship with any company whose stock is mentioned in this article. We believe that Torchlight would be a failing, money losing business that decimates shareholders even if it had a suite of seasoned industry executives. In April, closely held DoublePoint Energy sold to Pioneer . "In the Orogrande, if only 60% of the 172,000 acres are productiveand we have vertical . Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. That's your value per acre. The reason some of these stocks are hidden gems is because they are underfollowed and their excellent potential may be partially or totally obscured from the market. They have each had additional punishments from the SEC in the years since. In the Permian Basin, a prospect is to be drilled soon in the lightly explored Orogrande Basin. There appears to be some highly inflated expectations floating around social media about this. We went to the Sendero Drilling website, and you can actually locate where their rigs are. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). 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. The value of the special dividend is estimated at $0.45 million for the Winkler Project sale plus $12.4 million for the Hazel Project sale if that goes through. Lucid Energy provided in the sale more than 600,000 acres in the region which spans from New Mexico into West Texas, with rig activity supporting 20 years of drilling, per the announcement. A Texas General Land Office lease auction in April 2011 brought a bid of $3,264 per acre for 30,000 acres, compared with an average bid of $906 per acre six months earlier. Torchlight's Orogrande Project (Hudspeth County) acreage had no proved reserves at last report, and Hudspeth County had no reported production at last report either. We spoke to a representative of Sendero Drilling. As a result of the sudden progress and M&A hopes, Torchlight's stock has appreciated 200% year-to-date, closing at $1.59 per share on April 23, 2019. The deal closed on Dec. 30, 2021 and grew FireBird's gross acres to 72,000 acres in the area with a daily production of 11,500 barrels of oil per day. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. Find out more about how we use your information in our privacy policy and cookie policy. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). Unique insight into distressed opportunities to target outsized returns. The Delaware Sub-basin encompasses the Hobbs area of southeastern New Mexico and four counties of West Texas. Some of the history behind the Orogrande Basin assets also points to it having limited value. Following his time at Energy & Engine, Mr. Wurtele served as the CFO of Xtreme Oil & Gas, Inc. Xtreme Oil & Gas, Inc. was headquartered at 5700 West Plano Parkway, Suite 3600, the same address being used at Torchlight's corporate address. That's a massive range for the special merger dividend that investors will have to hold out for. 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. Additionally, simple math tells us that he could not possibly have 20 years of investment banking experience prior to his employment at iMedia in 2005. . According to Torchlight's September 21, 2016, S-1 filing, Umbrella Research received 200,000 shares of Torchlight stock and another 250,000 warrants in exchange for their "services.". 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. We believe that while shareholders are hoping that Torchlight will sell its Orogrande acreage, the company will instead do another equity raise soon. Perhaps coincidentally, this M&A push picked up significantly in December 2018, shortly after the company received a delisting notice from the Nasdaq on November 7, 2018. and our There are laws that keep them from lying, that's why they call them 'possible', but when it comes to rocks a mile under the ground, it's easy to say you see things that are promising. Over that time period, Mr. Brda, either originated, invested in, or placed over $70 million in financings. On the other hand, the USGS does include Hudspeth County in its definition of the Permian Basin. discussed below). There are . On 4/11/19, the company issued a press release announcing the results of its new third party reserve estimate for Orogrande. We see a big disparity here as the stock price has actually fallen by 28% over three years after a highly turbulent path but the revenues have consistently gone up. Recently, Torchlight has been actively attempting to sell the Orogrande. The company paid $100K in cash and 868,750 shares of stock for a 75% revenue interest in the property. Our primary focus has been the development of interests in an oil and gas project consisting of 134,000 contiguous gross acres we hold in the Orogrande Basin in West Texas in Hudspeth County, Texas. That rig was there on the Orogrande in early 2018. Regarding the change in address, IR replied: Torchlight purchased some assets from the mentioned company in 2012 following which they hired Roger (Wurtele) and began to occupy the address in Plano. September 16, 2019 by PBOG. Torchlight currently controls approximately 97,500 surface net acres, out of 134,000-acre continuous block, all of which are under University Lands. Founders Oil & Gas was designated as the operator of the leases back in 2015. In March 2020, holders of notes payable by Torchlight converted $7.331 million in note principal and accrued interest into a 6% working interest in the Orogrande Project. Torchlight Energy has a net revenue (NRI) of 75%. 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 . So, v a = PPA. I've expressed my opinion about Torchlight's relatively high price compared to Metamaterial's given their relative stakes in the post-combination company. He is currently ranked in the top 2% of analysts by TipRanks. Orogrande Basin Lease was bought in 2014 for 850k shares at 3.5 dollars, with 100k in cash with 75% interest! I wrote this article myself, and it expresses my own opinions. They are a public company looking for investors. Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. Although Mr. Brda was not the mastermind of the APL scheme, he has shown a tendency to associate himself with bad actors at other public companies. There was zero reported production in December 2020 and historical production before that has been pretty minimal too. In comparison, Torchlight is trading now at around $1.46 per share. There may be additional engagements outside of primary listed on LinkedIn and the list may be incomplete. The Orogrande basin is just 1 of the TRCH assets. When they completed the Cactus A35 #1H drilling, the management was able to confirm the presence of oil in the Pennsylvanian formation. I am not receiving compensation for it (other than from Seeking Alpha). company with a market cap of over $120 million. Core competencies include capital formation, equity and debt financings, strategic business development and securities regulation matters. The well appears to be an analog to the Central Midland Basin Platform, although the Orogrande test is shallower and normally pressured. 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. Announces Strategic New Patent Filed With the U.S. Patent and Trademark Office, OKYO Pharma Announces Appointment of Dr. Jay S. 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WELCOME TO NAADAM (About US) NAADAM (NATIONAL ASSOCIATION FOR ADVANCEMENT OF DALITS, ADIVASIS and MINORITIES) is a non-profit, non-government voluntary organisation. Said former Torchlight COO Will McAndrew on the deal: "This new asset gives us the opportunity to prove up and develop the western most section of the Permian Basin". It appears that he has employed a similar strategy at Torchlight. Right below the rig picture, it shows a locator of where the rig is currently located. latest information I found, but if accurate it still points to Metamaterial's shares being significantly cheaper than Torchlight's shares if one wanted to invest in the new company. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. He was promoted to CEO in December of 2014 with the exit of our co-founder Tom Lapinski. This is clearly the sign of a big investment opportunity in the stock. Elephant Analytics has 15 years of analytical experience and unique skills in numerical analysis and practical mathematics. 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. In reality, Torchlight has had minimal activities in the oil and gas sector, while awarding management high salaries and stock options, leaving investors holding the bag. The average price of U.S. shale acreage has fallen by more than 70% in two years from $17,000 per acre in 2018 to $5,000 per acre in 2020, according to Norwegian energy research firm Rystad. Another Texas operator sought to increase is Permian Basin presence as Fort Worth-based FireBird Energy bought about 21,000 acres in the eastern Midland sub-basin in West Texas from Chevron USA. Gary_L_Hutchinson April 5, 2017, 9:22pm #5. Prices for top E&P stocks and commodities. The lessor can sell its share of the future income . In 2018, Founders sold its 9.5% working interest for a total of $2.5 million. Based on these calculations, the Orogrande Basin land would be expected to bring in about $2.4B ($4B adjusted to $2.4B after . UNITED STATES. He has a B.S. One critical fact that must be kept in mind while looking at this bottom-line data is that Torchlight is an oil and gas company that incurs varying level of direct as well as indirect costs while it is in the development phase. People think it will actually hit $100 this year. This basin, known as the Orogrande . 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.

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