. Above: A map shows where Torchlight Energy Resources of Plano plans to drill for shale oil in the 172,000-acre Orogrande Basin Prospect, east of El Paso in Hudspeth County. Prices per acre can range from $10,000 to $60,000 in Texas. 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. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. Value per acre is another metric that ranges based on numerous factors. In recent months some record dollar amounts have been paid for leases in the Permian Basin. Because of this, Permian Basin mineral rights have a higher value, ranging from $7,000 to $58,000 per net mineral acre. While it is true that prime Permian Basin acreage can sell for tens of thousands of dollars per net acre, that is not a valid comparison for the Orogrande Basin. Using TRCH's stock price of $3.74 on 8/7/14, that equates to a total of $3.35M, or $19.47 per acre. Until recently, Torchlight's auditor was Calvetti Ferguson P.C. One piece of machinery that the company shows quite a bit in the Orogrande Project section, is a rig with the name: "Sendero Rig 11" on it. 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). Some companies are off track by more than 50% in certain regions. Torchlight used 3,000 pounds per foot of sand instead of the 2,000 pounds per foot used on the Founders A25 #1H . 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). This will, therefore, increase Torchlight's interest in Orogrande, one of its three oil and gas projects, where it is pursuing development of the sizable land package. Especially when all the infrastructure is already built. With over 20 years of investment banking experience, including 5 years as a fund manager, prior to becoming a consultant, Mr. Brda has the knowledge and experience to execute and ensure success for his client companies. The province takes its name from the community of Orogrande, New Mexico.. Geology. They didn't provide any evidence that any facts we include in this article are incorrect. TRCH only paid $3.35M in cash and stock for 75% of the Orogrande in August 2014 when oil prices were much higher than today. It currently has interests in four oil and gas projects. 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. 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. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. The success of the Cactus A35 #1H drilling acts as strong evidence for international oil players that oil and natural gas can be successfully drilled out of this project and it has increased the projects saleability immensely. 2023 Hart Energy. Also, the Winkler Project at the Delaware Basin has seen some action as well. New Mexico held steady in the last week at 84 oil and gas rigs as of Friday, compared with 41 reported a year ago, per the latest data from Baker Hughes. 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. 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. This is clearly the sign of a big investment opportunity in the stock. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). 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. Despite describing itself as a company which "engages in the acquisition, exploration, exploitation, and/or development of oil and natural gas properties in the United States", Torchlight has only produced 140,349 barrels of oil to date and has never produced more than 200 barrels of oil per day on a quarterly basis. Indeed, this property is a gem! Core competencies include capital formation, equity and debt financings, strategic business development and securities regulation matters. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. Essentially, it appears to be just a matter of time before the prospective buyer can start producing millions of barrels of oil and natural gas each year. 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. I've expressed my opinion about Torchlight's relatively high price compared to Metamaterial's given their relative stakes in the post-combination company. In the Permian . They have each had additional punishments from the SEC in the years since. Prices for top E&P stocks and commodities. Torchlight used 3,000 pounds per foot of sand instead of the 2,000 pounds per foot used on the Founders A25 #1H . Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. 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. Consists of 1,000 to 2,000 feet of sandstone, shale, earthy limestone, and gypsum. We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. 21.3 Acres W/ Mineral Rights! View 11 photos, read details, and contact the seller. Torchlight's special dividend is likely to have limited value though. Permian Basin is the only . He said they did lease out the drill back around February or March of 2018. Prior to the Q2 2013 10-Q, the company's address was listed as 2007 Enterprise Avenue in League City, Texas. With the news of the Cactus A35 #1H success story coming in, there is bound to be a very high demand for the stock with all these players exiting their shorts and new players going long and a short squeeze is almost a certainty. 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. There is also the possibility that the Orogrande Project sells for less given that Torchlight paid a bit over $3 million for it back in 2014 (with $90 oil). 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. Thankfully, the bulls took control of TRCH stock and ran it up in January. 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. 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). The Energy Report Examines Torchlight Energy's Drilling and Development Agreement with University Lands. Rextag database of energy infrastructure assets. They believe it will yield 156 sections with the potential of 4-6 million barrels per section. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The Rich A-11 presents a 700-foot hydrocarbon-bearing column with up to 6 million barrels of oil or liquids-rich gas per section. . Located in Winkler County, Texas, the project includes 640 gross (67.2 net) acres. The funds were used for the expansive drilling at Orogrande Basin. The Company has recently been in the news for striking oil in its largest project in Orogrande and the potential amount of the oil extracted could be as much as 3.678 billion barrels. In November 2007, Mr. Brda was named alongside 75 entities and other individuals in a complaint containing nineteen counts, including alleged violations of the federal Racketeer Influenced and Corrupt Organization Act and the anti-fraud provisions of the federal securities laws (the lawsuit does not involve Torchlight Energy Resources, Inc. in any way). This project was the result of the work of a well known Permian Basin expert Geologist, Rich Masterson. 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. UNITED STATES. In fact, Umbrella discloses that their "research" was paid for by Torchlight in their reports, such as this one, in which they upgrade Torchlight to a "buy" and assign a $5.00 price target. I am not receiving compensation for it (other than from Seeking Alpha). There was zero reported production in December 2020 and historical production before that has been pretty minimal too. But they didn't work with Torchlight directly. 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. It's all about the price per acre, not by the amount of oil in the land. 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. Please disable your ad-blocker and refresh. We had an independent petroleum engineer review Torchlight's reserve estimate report. September 16, 2019 by PBOG. 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. Now the cost of a barrel right now is $73 and it is increasing. Is this someone you would want to invest your capital with? We have an over 80% success rate, see our reports at whitediamondresearch.com. Some companies are off track by more than 50 % in certain regions acre is another that. Months some record dollar amounts have been paid for leases in the stock % in certain.! Provide any evidence that any facts we include in this article are incorrect of TRCH stock and ran up! Per acre can range from $ 7,000 to $ 58,000 per net acre... 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