Prices for top E&P stocks and commodities. The lessee promises to pay the lessor a share of gross proceeds from sales of the mineral leased. It is only a matter of time before the management starts divesting the projects which implies a huge jump in the top-line with a minimal increase in direct and indirect expenses so it seems like the Company will soon have a strong return on equity. 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. However, there are no proved reserves and no commercial production associated with the Orogrande Project. Furthermore, this engineer noted that Torchlight's determination was made using petrophysical analysis alone, which is unusual, given the size of the reserve being analyzed. As shown, #11 is nearby Midland and Odessa, TX. 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. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. Most people have it growing at about [a rate of] 800,000 barrels per year. Get them exclusively at Distressed Value Investing. In addition, Mike Mullen, a reservoir evaluation expert from Stimulation Petrophysics, indicated earlier in 2019, that there could be a potential 3 billion barrels of oil present in this Orogrande area. 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. 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 July, Oneok Partners announced an expansion of its West Texas system to supply future gas to Mexico. Generally, these estimates are made using a variety of techniques - the use of petrophysical analysis alone leaves much open to interpretation. is in the process of . History and geology appear to be in alignment for a new tight oil play. Right now, the drill isn't being used, he said. Privacy Policy. They believe it will yield 156 sections with the potential of 4-6 million barrels per section. 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. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. 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. 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. 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 2007, Mr. Brda was named as a defendant in a Federal Racketeer Influenced and Corrupt Organization Act ("RICO") case. He graduated college in 1988 with a B.S. Under a new law proposed by House Republicans, that price would go up to more than $2.50. The funds were used for the expansive drilling at Orogrande Basin. In the case of Torchlight, despite having a float of 53.91 million shares, its daily volume is relatively low at around 170,000. We did our due diligence on this rig. He is currently ranked in the top 2% of analysts by TipRanks. There may be additional engagements outside of primary listed on LinkedIn and the list may be incomplete. (10.72% of the property will not be operated on.) You can change your choices at any time by visiting your privacy controls. Torchlights Midland basin project is its second largest project with approximately 12,000 gross acres of area that will almost entirely be operated. . Add up the value of all the parcels you want to include in your average, if there's more than one. 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. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. I wrote this article myself, and it expresses my own opinions. The company's entire perceived value is based on possible oil in its Orogrande Project. Right below the rig picture, it shows a locator of where the rig is currently located. They are a public company looking for investors. The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. 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. He has a B.S. He does, however, list the following experience: While Mr. Brda likely had employment between his graduation from SIU in 1988 and his term at iMedia in 2005, we assume that he would have listed any impressive experience on his LinkedIn page. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. If you have an ad-blocker enabled you may be blocked from proceeding. status, API, lease information, and legal description Rig Locations Map / Database: Updated Weekly Search and view rig locations by: operator, well name, county, state, and wellbore type Planned Drilling Programs Search for the number of wells planned to drill / complete, rigs, lateral lengths, and frac stages A&D Transactions Track A&D/M&A transactions by: buyer, seller, deal value . 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. Until recently, Torchlight's auditor was Calvetti Ferguson P.C. Torchlight Energy Resources (TRCH) is heading towards its merger with Metamaterial (MMATF). 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. Given this fact, the Companys current level of earnings seems very reasonable and in no way justify the fall in the price. Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. We have been paid $25,000 (CASH) for & have been paid 0 shares of restricted frequent shares. Torchlight Energy Resources not only has discovered a new oil field in Texas, but has also effectively produced hydrocarbons from it. 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. 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. The Companys operations involve drilling and working interest programs within the United States. 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. Ready to build zoned SR-43 (single family residential) lot. All rights reserved. Browse Orogrande, New Mexico properties for sale on Land.com. The moves could potentially cause permanent damage and lower the overall amount recovered from a reservoir. 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. 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. He noted that the 3.678 billion barrel estimate touted by the company is actually referring only to possible reserves. They operate through multiple subsidiaries such as Torchlight Energy Operating, LLC, a Texas limited liability company, and Hudspeth Oil Corporation, a Texas corporation. Has House? discussed below). There are . 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 specialize in the technology and healthcare sectors. 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 the Permian . I am not receiving compensation for it (other than from Seeking Alpha). Disclosure: I am/we are short TRCH. We, Yahoo, are part of the Yahoo family of brands. Torchlight spudded the Rich A-11 in March 2015 based on prospect work by Permian Basin geologist Rich Masterson, who is credited with originating the Wolfbone play in the Delaware Basin. So, v a = PPA. He had not heard of Torchlight prior to looking over the project and has no financial interest in the company. We believe this news could really change the market perception and send the stock skyrocketing. 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. So tantalizingly closethats the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. Based on these calculations, the Orogrande Basin land would be expected to bring in about $2.4B ($4B adjusted to $2.4B after . Those intrusions were thought to have created a fractured and overly cooked subsurface environment hostile to the type of oil and gas development underway further east in the Midland and Delaware basins. Torchlight used 3,000 pounds per foot of sand instead of the 2,000 pounds per foot used on the Founders A25 #1H . 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. 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). For making specific funding picks, readers ought to go looking their very personal suggestion. Clearly, the Fund community seems highly confident of Torchlight being able to deliver from its project portfolio. These calculations tend to mention the value of prime Permian Basin acreage when discussing Torchlight's Orogrande Basin acreage. In addition to Umbrella, 321 Gold Ltd., run by Robert Moriarty, has also been a consistent supporter of Torchlight in "research" reports published on his website, 321gold.com. 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. On the other hand, Hudspeth County doesn't even rank in the top 200 Texas counties in terms of oil or condensate production. . This is clearly the sign of a big investment opportunity in the stock. From original discovery in 1924 annual New Mexico oil production peaked at 129 million bbls per year in 1969 and then settled into a long decline that was ameliorated in the 1980's and 1990's by the discovery of new trends in the Permian Basin, redevelopment of underdeveloped fields, and implementation of enhanced recovery projects in existing . Is my math way off? 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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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. The former operator of the Orogrande Project sold its 9.5% working interest in the assets for $2.5 million in 2018, which gives a better idea of the potential worth of Orogrande Basin assets. Additional disclosure: Additional disclaimer: http://whitediamondresearch.com/disclaimer/. This basin, known as the Orogrande . The Orogrande basin is just 1 of the TRCH assets. Keyword Property ID. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. 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). 2023 Hart Energy. It's all about the price per acre, not by the amount of oil in the land. @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 . Mr. Brda's motion to vacate was accepted by the court, contingent upon Mr. Brda's compliance with his settlement. Suddenly, Torchlight's sole focus is the sale (or "monetization") of its early stage projects, including the Orogrande Project. Prices for top E&P stocks and commodities. The above excerpt is from the Companys 10K filings for 2018 and it clearly shows the huge amount of potential that its operations have. the court entered a default judgment against him in September 2012. Because of this, Permian Basin mineral rights have a higher value, ranging from $7,000 to $58,000 per net mineral acre. Information on assets, buyers and sellers, deal values, and more. We have achieved all goals and are now ready to focus all efforts and capital into the Orogrande. If you do the math on that it lands somewhere around $750m barrels total. 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 research@whitediamondresearch.com.Follow us on twitter @whiteresearch. On possible oil in the top 2 % of analysts by TipRanks readers ought to go looking their personal. Noted that the 3.678 billion barrel estimate touted by the amount of potential that its operations have barrel... Clearly, the Fund community seems highly confident of Torchlight prior to looking over last! 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