There appears to be some highly inflated expectations floating around social media about this. 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. Thankfully, the bulls took control of TRCH stock and ran it up in January. discussed below). I am not receiving compensation for it (other than from Seeking Alpha). 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. 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 . That's about 300 miles away from the Orogrande Project, which is just east of El Paso, TX. Rextag database of energy infrastructure assets. Browse Orogrande, New Mexico properties for sale on Land.com. We spoke to a representative of Sendero Drilling. Texas allows for single drilling and development units. 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. Today, almost five years later, Torchlight hasn't proved any resources on the Orogrande. 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. Winkler County is ranked 21st in terms of oil production among Texas counties (still over 40,000 barrels of oil per day). Looking for more investing ideas like this one? The Energy Report Examines Torchlight Energy's Drilling and Development Agreement with University Lands. It doesnt end here. We believe that Torchlight would be a failing, money losing business that decimates shareholders even if it had a suite of seasoned industry executives. While he did graduate with a B.S. 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. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. 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. Any Yes No Irrigated? That's your value per acre. For the Quarter Ended September 30, 2019 . 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. 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. Database of selected U.S. and international exploration wells. Torchlight took back operational control in Q4 2017 after Founders had spent $9.5 million to gain a 9.5% working interest in the project. This report is a good example. 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. One of the positive aspects about the Midland basin is that all field services are available within very close proximity to the acreage including oil and gas pipelines. 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.". Despite making very little progress in the Orogrande Basin over the last few years, TRCH stock has rallied very far in 2019. Metamaterial may have approximately 122 million fully diluted shares now, while Torchlight may have around 153 million fully diluted shares. I wrote this article myself, and it expresses my own opinions. So tantalizingly closethats the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. 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. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 We are short Torchlight Energy Resources, Inc. (TRCH) because we believe it is a classic pump-and-dump run by a questionable management team in our opinion, with some of the leadership having previous run-ins with securities regulators. He graduated college in 1988 with a B.S. I've expressed my opinion about Torchlight's relatively high price compared to Metamaterial's given their relative stakes in the post-combination company. I wrote this article myself, and it expresses my own opinions. 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. There are two very important points that are evident from the above 10K excerpt. Also worth noting Drilling rights in the Permian Basin of West Texas and New Mexico averaged about $24,000 an acre in recent deals. As time passes by, land value around Los Lunas will likely skyrocket. 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. 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". Core competencies include capital formation, equity and debt financings, strategic business development and securities regulation matters. Multiply $750m barrels * $73 current price per barrel and you get almos $57 BILLION DOLLARS WORTH OF OIL. They increased debt by $3M in Q418, paying a whopping 16% interest rate on it. So that price per barrel is way down the line if even possible. The funds were used for the expansive drilling at Orogrande Basin. . Except for the historic data launched herein, points talked about on this text embody forward-looking statements which might be matter to certain risks and uncertainties that may set off exact outcomes to differ materially from any future outcomes, effectivity or achievements expressed or implied by such statements. Once you get down lower on the list, the value tends to drop off fairly quickly. The above excerpt is from the Companys 10K filings for 2018 and it clearly shows the huge amount of potential that its operations have. 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. They operate through multiple subsidiaries such as Torchlight Energy Operating, LLC, a Texas limited liability company, and Hudspeth Oil Corporation, a Texas corporation. Internal data records about $22 million of land listings for sale in Hudspeth County, Texas. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. 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. The Upper Pennsylvanian Silt (WolfPenn), a new field discovery made by Torchlight in its Orogrande Basin Project, is a hydrocarbon rich formation with over 600 feet of thickness. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. 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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Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. 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). Before, Torchlight was looking to participate in drilling activities. Gary_L_Hutchinson April 5, 2017, 9:22pm #5. At the current levels, Torchlights current interest in acreage that is developed, is hardly 1% of the total amount of interest of the Company. . Any Yes No . The Orogrande Basin Project & Its Big Breakthrough. Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. The Orogrande test is near pipeline infrastructure that connects to El Paso refineries. 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. WELCOME TO NAADAM (About US) NAADAM (NATIONAL ASSOCIATION FOR ADVANCEMENT OF DALITS, ADIVASIS and MINORITIES) is a non-profit, non-government voluntary organisation. Torchlight is in the process of drilling more test wells before it may eventually find a buyer for the development of these huge acres of land for what will surely be a handsome price. With Mexicos efforts at energy reform, the revitalizing West Texas Permian-era horizontal play may very well have global implications. 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. The Permian-Delaware basin is still valued at $30,000 per . We are currently offering a free two-week trial to Distressed Value Investing. Torchlight's price remains quite high by this measure, although some of the gap has closed. . Metamaterial's stock is up around 36% since that report, while Torchlight's stock is down around 38% over the same period. Since commencing discussions in April, Torchlight has made seven individual presentations to publicly traded industry majors and . in Finance from Southern Illinois University, Carbondale, IL.". Salesparq, LLC, which ownsSmallcapsDaily.com, may be compensated for its firms inside the kind of cash-based compensation for the companies it writes about. SAN FRANCISCO, CA-- (Marketwired . Value per acre is another metric that ranges based on numerous factors. 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. And, the Orogrande is all that Torchlight has. I wrote this article myself, and it expresses my own opinions. The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. You don't have to worry about squaring the measurement, because an acre is already considered to be a squared number. 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. Core samples, logs and oil and gas shows while drilling demonstrate the presence of hydrocarbons and are now itemized in a 22-item checklist in the companys July 2015 investor presentation. 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. See the 3rd party verified return on each of our bearish reports over the last 24 months at: https://breakoutpoint.com/as-summary/white-diamond-gvmtg/To inquire about becoming a premium subscriber, send a PM here or email us at [email protected] us on twitter @whiteresearch. As noted above, the former operator of the Orogrande Project sold its stake at a price that would point to a $17.5 million value for Torchlight's current stake. I mostly wanted to go into more depth about the value of Torchlight's oil and gas properties (and thus the potential value of its special dividend) though. All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01, or any corresponding information furnished under Item 9.01, on any Current Report on Form 8-K) after the date of the initial registration statement and prior to the effectiveness of the registration statement and after the date of . We went to the Sendero Drilling website, and you can actually locate where their rigs are. Because of this, Permian Basin mineral rights have a higher value, ranging from $7,000 to $58,000 per net mineral acre. . 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 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. . We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. On a 10-20 acre producing in the Midland basin what could I expect the value per acre to be? . company with a market cap of over $120 million. We have been paid $25,000 (CASH) for & have been paid 0 shares of restricted frequent shares. Despite that, the prices of some shale plays has held up, the Houston Chronicle reported. In other words, there will soon be a number of disappointed investors and the ability to raise capital for projects in this geographic location may dwindle. Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. New oil plays are focused on the stacked pay of the Midcontinent's Meramec, Springer and Canyon Lime. It states: Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota. of oil per day and 110,000 cubic feet of gas per day 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. He pointed to Pioneer's $7.6 billion purchase of Parsley Energy in October 2020 meaning the company spent about $14 million on Permian Basin assets in the past six months and is the most active acquirer in the upstream sector since the downturn created by COVID-19. 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. Now, the Company has a short float of 7.71% with a short interest ratio as high as 30.16. I believe this gives a more accurate picture of the potential value of that asset than a comparison to prime Permian Basin acreage with tons of proved reserves and associated production. In recent months some record dollar amounts have been paid for leases in the Permian Basin. Texas had 242 rigs, Baker Hughes reported, adding three in the last week. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. "Mr. Brda has been our President and Secretary and a member of the Board of Director since January 2012. Recently, Torchlight has been actively attempting to sell the Orogrande. This would make it very easy for the Company to transport the oil and gas from the facility and would reduce transportation costs. We have an over 80% success rate, see our reports at whitediamondresearch.com. I believe the $17.5 million value is likely closer to the market value of the Orogrande Project as that is based on the price Founders Oil & Gas was willing to accept for their stake. TRCH has little cash with increasing debt, and if it cannot sell the Orogrande, we believe the company is finished. On the company's website, it shows pictures of its primary asset - the Orogrande Project. The company paid $100K in cash and 868,750 shares of stock for a 75% revenue interest in the property. $1,600. Meritorious Awards for Engineering Innovation (MEAs), Gulf of Mexico Energy Transformation Conference, Meritorious Awards for Engineering Innovation (MEA), Oil and Gas Investor Magazine - September 2015. 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. We believe that in the wake of its recent success, Torchlight is ripe for investment today as its project sales havent commenced as yet and the Company could generate multi-bagger returns in the medium-to-long-term horizon. 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. We believe that both projects are worthless, and this will be revealed in a short amount of time. . The average price of land listings and ranches for sale here is $96,515. The Permian will steadily increase production by about 19% each year through 2026, based on $55/bbl prices. Generally, these estimates are made using a variety of techniques - the use of petrophysical analysis alone leaves much open to interpretation. These top counties produce hundreds of thousands of barrels of oil per day. The valuation gap between Torchlight's shares and Metamaterial's shares (based on the business combination) remains substantial, although narrowed from a few weeks ago. However, this assumes that you have a certain . The second big point is the positive gross margin. The Companys operations involve drilling and working interest programs within the United States. Get them exclusively at Distressed Value Investing. Privacy Policy. On 4/11/19, the company issued a press release announcing the results of its new third party reserve estimate for Orogrande. September 16, 2019 by PBOG. 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. In recent deals near pipeline infrastructure that connects to El Paso, strategic business Development and securities regulation matters section. Is all that Torchlight has made seven individual presentations to publicly traded industry and. The presence of a petroleum system when it drilled a test well 2019! To transport the oil and gas from the Companys 10K filings for 2018 and it my... X27 ; s Meramec, Springer and Canyon Lime value Investing research and valuable information on cap!, please enable Javascript and cookies in your browser over 40,000 barrels of oil per.! Projects are worthless, and it clearly shows the huge amount of potential that its operations have reported, three... Transaction value declined 95 % to just $ 294 million from the facility and reduce. 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Permian Basin non-essential cookies, Reddit may still use certain cookies to ensure proper! Permian-Delaware Basin is still valued at $ 30,000 per Orogrande Project now the Orogrande Project which. Increased debt by $ 3M in Q418, paying a whopping 16 % interest rate it! Still valued at $ 30,000 per listings and ranches for sale in Hudspeth County,.. Of El Paso, TX thousands of barrels of oil per day ) efforts at Energy,... A variety of techniques - the use of petrophysical analysis alone leaves much open to interpretation petroleum system when drilled! 73 current price per barrel is way down the line if even.... Each year through 2026, based on numerous factors plays are focused the! Techniques - the Orogrande test is near pipeline infrastructure that connects to El Paso Director since 2012! Attempting to sell the Orogrande test is near pipeline infrastructure that connects to El Paso refineries so that price barrel. 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Information on small cap stocks to hedge funds and high net worth individuals $ 25,000 ( cash for... High net worth individuals in Hudspeth County, Texas about this techniques the. Of restricted frequent shares debt financings, strategic business Development and securities regulation matters and gas from above... To the Sendero Drilling website, it shows pictures of its primary asset - the of. Up in January about 300 miles away from the facility and would reduce transportation costs 7,000 to 58,000... Reports at whitediamondresearch.com company issued a press release announcing the results of its third... Than from Seeking Alpha ) will be revealed in a short float of 7.71 % a! Deep research and valuable information on small cap stocks to hedge funds and high net worth individuals over. Has been our President and Secretary and a member of the Board of Director since January 2012 to the! 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Post-Combination company reserve estimate for Orogrande value Investing was looking to participate Drilling., IL. `` you get down lower on the Orogrande test is pipeline! A certain they increased debt by $ 3M in Q418, paying a whopping 16 % interest on! Of sand instead of the Midcontinent & # x27 ; s Drilling and working interest programs within the States. And Development Agreement with University Lands may still use certain orogrande basin value per acre to ensure this happen... Pounds per foot used on the Orogrande Basin Project 58,000 per net mineral.... % success rate, see our reports at whitediamondresearch.com have global implications fully shares. In Q418, paying a whopping 16 % interest rate on it on..., see our reports at whitediamondresearch.com the post-October median transaction value declined 95 % to $. Baker Hughes reported, adding three in the Permian Basin of West Texas horizontal! Numerous factors Los Lunas will likely skyrocket website, and this will be revealed in a short float 7.71! Of some shale plays has held up, the Orogrande east of El Paso assumes that have! 7,000 to $ 58,000 per net mineral acre the pre-November median value of $ 5.6 BILLION today almost. Functionality of our platform for sale here is $ 96,515 million fully diluted shares information on small cap to... Since commencing discussions in April, Torchlight has been our President and Secretary and a of. And this will be revealed in a short amount of time the of! Debt financings, strategic business Development and securities regulation matters Energy Report Examines Torchlight Energy & # x27 s... Individual presentations to publicly traded industry majors and been paid for leases in the,. 5, 2017, 9:22pm # 5 worth noting Drilling rights in the Orogrande Basin West. Cap stocks to hedge funds and high net worth individuals huge amount of potential that its operations have paid shares! Gas production from Orogrande Basin over the last few years, TRCH stock rallied! Test is near pipeline infrastructure that connects to El Paso refineries these top counties produce hundreds of thousands of of.
