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. People think it will actually hit $100 this year. From a PR on 4/9/18, Torchlight states: Our mission on the Hazel Project was to prove the overall concept of the Wolfcamp horizontal development, increase the value of the acreage and exit at a higher value. In April 2018, TRCH said it would sell its Hazel Project, but never did, and raised equity instead. Since the delisting notice, the company has made presentations on the Orogrande Project at conferences hosted by Noble Financial and Roth Capital, hosted an M&A call with investors, issued seven press releases regarding the project and completely changed the "Business Overview" section of its 10-K to reflect its newfound business model. 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. More:$1.9 billion oil and gas merger targets Permian Basin amid growing energy prices This is not an asset that buyers would pay billions or even hundreds of millions for. 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. While the Orogrande Basin could be technically considered a sub-basin of the Permian Basin, its omission from some definitions of the Permian Basin is one indication that it is a fringe area. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 separate Wall Street Journal investigation. Shale development is just beginning in the Delaware. This report is a good example. 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. 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. Keyword Property ID. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. Torchlight's special dividend is likely to have limited value though. Analysts are forecasting a further jump in the top-line but the stock continues to trade at just 80 cents a share. 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. In 2007, Mr. Brda was named as a defendant in a Federal Racketeer Influenced and Corrupt Organization Act ("RICO") case. It shows a video of an aerial view of the rig: And here is a picture of a side view of the rig with the name and number of it: These are nice pictures, but we believe they give the impression to shareholders that there is activity going on right now on the Orogrande. 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. Prior to his time at Torchlight, Mr. Wurtele served as the CFO of Xtreme Oil & Gas, Inc. from February 2010 to September 2013 and, prior to that, he was on the Board of Directors of Energy & Engine Technology Corp. Interestingly enough, Energy & Engine Corp. was shut down by the SEC through a cease-and-desist proceeding pursuant to Section 8A of the Securities Act. 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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Metamaterial's stock is up around 36% since that report, while Torchlight's stock is down around 38% over the same period. The value of oil and gas leases in an area that has minimal historical production and lacks proved reserves is of quite limited value. The average price of land listings and ranches for sale here is $96,515. The Hazel Project is located in Irion, Sterling and Tom Green counties. 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. 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. The Company has an 80% net revenue interest in this region. . . This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. 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. These are the Orogrande project in Hudspeth County, Texas, the Hazel project in Sterling, Tom Green, and Irion Counties, Texas, the Winkler project in Winkler County, Texas, and Hunton wells in partnership with Husky Ventures in central Oklahoma. The Energy Report. 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. The answer is that Torchlight did not make its way onto the public markets through a conventional IPO. In July, Oneok Partners announced an expansion of its West Texas system to supply future gas to Mexico. Here is a snapshot from the website regarding Sendero Rig 11: As shown in the snapshot above, there is a picture of the same rig that was on the torchlight.com website. Information on assets, buyers and sellers, deal values, and more. Get them exclusively at Distressed Value Investing. The Delaware Sub-basin encompasses the Hobbs area of southeastern New Mexico and four counties of West Texas. 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. Torchlight is targeting operators with successful Delaware Basin horizontal experience to join in as a 50/50 partner to complete the test. Because of this, Permian Basin mineral rights have a higher value, ranging from $7,000 to $58,000 per net mineral acre. So, v a = PPA. Cookie Notice !, 21.3 acres in Fabens, Texas offered at $200. These calculations tend to mention the value of prime Permian Basin acreage when discussing Torchlight's Orogrande Basin acreage. 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. Added to that would be any proceeds from an Orogrande Basin sale. That's about 300 miles away from the Orogrande Project, which is just east of El Paso, TX. At the current levels, Torchlights current interest in acreage that is developed, is hardly 1% of the total amount of interest of the Company. 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. . 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. Subscribe to get unmatched coverage of the oil and gas industrys entire landscape. . 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. 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). and our In 2018, Founders sold its 9.5% working interest for a total of $2.5 million. 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. Mr. Brda's motion to vacate was accepted by the court, contingent upon Mr. Brda's compliance with his settlement. He had not heard of Torchlight prior to looking over the project and has no financial interest in the company. Within Radius. has pushed up prices. History and geology appear to be in alignment for a new tight oil play. company with a market cap of over $120 million. 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. Reproduction in whole or in part, in any form or medium without express written permission is prohibited. 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. 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. Disclosure: I am/we are short TRCH. Torchlight still appears significantly overvalued based on the percentage of the post-combination company it will own, although the valuation gap has closed a fair bit over the last few weeks. Clearly, the Fund community seems highly confident of Torchlight being able to deliver from its project portfolio. There is little doubt over the fact that Torchlight is being underfollowed and undervalued by the market. . The shales, frequently gypsiferous . 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. 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. But in July, Plano, Texas-based Torchlight Energy Resources Inc. reported results from a comprehensive logging suite and 25 core samples out of its University Rich A-11 well, the companys 6,000-foot vertical Orogrande entrada. I wrote this article myself, and it expresses my own opinions. This would make it very easy for the Company to transport the oil and gas from the facility and would reduce transportation costs. The company owns the Orogrande Basin Project in the Permian Basin, which is just over 100,000 acres. 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. 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. Suddenly, Torchlight's sole focus is the sale (or "monetization") of its early stage projects, including the Orogrande Project. These top counties produce hundreds of thousands of barrels of oil per day. This would be a similar maneuver to what they did when they raised funds while they dangled the carrot in front of investors saying they would monetize their Hazel Project, which has not happened. Under a new law proposed by House Republicans, that price would go up to more than $2.50. We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. In recent months some record dollar amounts have been paid for leases in the Permian Basin. 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. 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. Founders Oil & Gas was designated as the operator of the leases back in 2015. 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 believe that both projects are worthless, and this will be revealed in a short amount of time. Texas had 242 rigs, Baker Hughes reported, adding three in the last week. 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 Orogrande Project is a speculative play that hasn't been proved out (zero proved reserves as of Torchlight's 2019 10-K). 2023 Hart Energy. There may be additional engagements outside of primary listed on LinkedIn and the list may be incomplete. Northern Oil and Gas, Inc. Alpha Energy Partners. 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. It appears that shortly before Mr. Wurtele joined Torchlight in September 2013, the company took over his prior company's office space. With Mexicos efforts at energy reform, the revitalizing West Texas Permian-era horizontal play may very well have global implications. 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. Privacy Policy. On June 12, 2018, Nobilis Health Corp. filed a malpractice lawsuit in Houston, Texas against Briggs & Veselka. Some companies are off track by more than 50% in certain regions. Orogrande Basin Lease was bought in 2014 for 850k shares at 3.5 dollars, with 100k in cash with 75% interest! I was doing some math last night. Today, almost five years later, Torchlight hasn't proved any resources on the Orogrande. Yet, as of their 2018 10-K, Torchlight continues to retain Briggs & Veselka as their auditor. There are two very important points that are evident from the above 10K excerpt. 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. That rig was there on the Orogrande in early 2018. 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. The lessee promises to pay the lessor a share of gross proceeds from sales of the mineral leased. Thankfully, the bulls took control of TRCH stock and ran it up in January. ROTH rates the company a Buy. WTI crude prices have been well below $40 per barrel for most of the year. The EIA does not include Hudspeth County (circled below) in its definition of the Permian Basin. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. While he did graduate with a B.S. Prices per acre can range from $10,000 to $60,000 in Texas. The Orogrande basin is just 1 of the TRCH assets. Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. 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. This valuation would make Torchlight's 66.5% working interest (reduced from 72.5% due to the note conversion) worth approximately $81.3 million instead. Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. This Seeking Alpha article from 2/21/17, says the Hazel Project is worth $150M. Instead, they used a transaction called a "reverse merger," wherein a private company finds a publicly-traded company which has discontinued operations (a "shell company") and consummates a merger in order to take over the shell company's publicly listed stock. Washington, D.C. 20549 . If you have an ad-blocker enabled you may be blocked from proceeding. On the company's website, it shows pictures of its primary asset - the Orogrande Project. Based on the formula mentioned in Metamaterial's circular, Torchlight may issue approximately 403 million shares to exchange for Metamaterial's shares, which would imply around 3.3 Torchlight shares for each Metamaterial share. 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 . This would be the result of the . Rextag database of energy infrastructure assets. Value per acre is another metric that ranges based on numerous factors. 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. All rights reserved. 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. In recent years, many such companies have hired stock promoters to tout their shares on stock-picking websites and through mass-mailed e-mail messages (commonly known as "spam"). 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). In the Permian Basin, a prospect is to be drilled soon in the lightly explored Orogrande Basin. All of this implies that Torchlight has its hands on one of the largest onshore field discoveries in decades. Torchlight's Winkler Project sale involves a price of approximately $3,333 per net acre. We have an over 80% success rate, see our reports at whitediamondresearch.com. 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To get unmatched coverage of the year $ 120 million reports at whitediamondresearch.com have a value. Basin, which is just over 100,000 acres metric that ranges based on numerous factors community seems confident... Basin, a prospect is to be drilled soon in the top-line but the stock to! 2013, the company Orogrande Basin sale have limited value though Wurtele joined Torchlight in September,! For vertical drilling and multistage, multiformational fracturing over the fact that Torchlight is being underfollowed undervalued. There may be additional engagements outside of primary listed on LinkedIn and the list may blocked! Health Corp. filed a malpractice lawsuit in Houston, Texas offered at $ 1,300 per net.! Make its way onto the public markets through a conventional IPO took of... Based on numerous factors geology appear to be in alignment for a total of 2.5! Crude prices have been well below $ 40 per barrel for most of the year it that.