Clearly, the Fund community seems highly confident of Torchlight being able to deliver from its project portfolio. That's a massive range for the special merger dividend that investors will have to hold out for. 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 . with many not being able to survive the fallout. He was promoted to CEO in December of 2014 with the exit of our co-founder Tom Lapinski. On June 12, 2018, Nobilis Health Corp. filed a malpractice lawsuit in Houston, Texas against Briggs & Veselka. You can change your choices at any time by visiting your privacy controls. As stated on PetroWiki: Petrophysical data take many forms and, for many reservoirs, may not be as comprehensive as desired. The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. With the play consisting of 134,000 acres . 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. 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 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. Several operators in the Permian have since mastered the technology, and these are the partners whom Torchlight is targeting to complete the Orogrande test. 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. Any Yes No . You don't have to worry about squaring the measurement, because an acre is already considered to be a squared number. 09-30-2022. Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. 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. Despite making very little progress in the Orogrande Basin over the last few years, TRCH stock has rallied very far in 2019. Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. In 2018 a Santa Fe firm that places bids for anonymous investors bid more than $95,000 per acre for a tract of U.S. government land on the New Mexico side of the Basin. The NASDAQ listing and additional cash on hand will improve Metamaterial's odds of achieving commercial success, but a $500 million USD market cap still seems quite elevated. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 Unique insight into distressed opportunities to target outsized returns. Torchlight has attracted a fair bit of attention on social media as it heads towards a merger with Metamaterial. Shale development is just beginning in the Delaware. Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. 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. All rights reserved. Torchlight Energy has an enterprise value of over $130M. I have no business relationship with any company whose stock is mentioned in this article. I am not receiving compensation for it (other than from Seeking Alpha). . Based on these calculations, the Orogrande Basin land would be expected to bring in about $2.4B ($4B adjusted to $2.4B after . Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. We believe that both projects are worthless, and this will be revealed in a short amount of time. 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). To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Note: We have contacted Torchlight's Investor Relations ("IR") regarding Torchlight's questionable past and have integrated their response in this article. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. Can we trust Torchlights financial reporting? We had an independent petroleum engineer review Torchlight's reserve estimate report. Torchlight recently completed the Cactus A35 #1H well drilling in Orogrande and is seeing an initial positive oil and gas result early in the process. So, v a = PPA. We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. As explained in the recent 10-K, Torchlight acquired the Orogrande Project on 8/7/14. You can do the same for the tax liability. This report is a good example. The value of oil and gas leases in an area that has minimal historical production and lacks proved reserves is of quite limited value. In 2018, Founders sold its 9.5% working interest for a total of $2.5 million. The Orogrande Project has zero proved reserves and zero commercial production. 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. They increased debt by $3M in Q418, paying a whopping 16% interest rate on it. 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. So tantalizingly closethats the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. 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. 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). Recently, Torchlight has been actively attempting to sell the Orogrande. This required Mr. Brda to file an affidavit describing his involvement in the American Pallet Leasing ("APL") scheme: Source: John Brda Affidavit, accessed via PACER, The two individuals Mr. Brda did business with at APL were Craig Medoff and Curt Kramer. Torchlight's special dividend is likely to have limited value though. 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. 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. September 16, 2019 by PBOG. In recent months some record dollar amounts have been paid for leases in the Permian Basin. Browse Orogrande, New Mexico properties for sale on Land.com. Northern Oil and Gas, Inc. Alpha Energy Partners. 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.". 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. 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. Orogrande Basin Lease was bought in 2014 for 850k shares at 3.5 dollars, with 100k in cash with 75% interest! Permian Basin is the only . 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). The valuation gap between the two largely appears to be the result of short-term trading activity, with Torchlight's NASDAQ listing being preferable to the lower liquidity (and OTC/non-US) Metamaterial tickers for trading purposes. 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"). 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. The Hazel Project is located in Irion, Sterling and Tom Green counties. "Mr. Brda has been our President and Secretary and a member of the Board of Director since January 2012. Information about your device and internet connection, like your IP address, Browsing and search activity while using Yahoo websites and apps. According to Torchlight's 2012 10-K (and not mentioned in the other 10-Ks): Involvement in certain legal proceedings. It doesnt end here. Find out more about how we use your information in our privacy policy and cookie policy. 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. Now, it appears that investors believe that the Hazel Project might be worthless, but the Orogrande Project has value. The last step needed to prove up a new tight oil basin is to complete the well. Right now, the average price for a loaf of bread is, approximately, $1.87. 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. 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. 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. Is this happening to you frequently? . Over that time period, Mr. Brda, either originated, invested in, or placed over $70 million in financings. 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. Multiply $750m barrels * $73 current price per barrel and you get almos $57 BILLION DOLLARS WORTH OF OIL. Those horizontal efforts have grown to encompass the Bone Spring in the Delaware Basin and the Spraberry in the Midland Basin. Mr. Brda also has a checkered past. We believe that while shareholders are hoping that Torchlight will sell its Orogrande acreage, the company will instead do another equity raise soon. The promoter is often compensated in the form of purportedly unrestricted shares of the company's common stock, which the promoter sells after its touting has attracted investor interest in the company. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. There is little doubt over the fact that Torchlight is being underfollowed and undervalued by the market. It is my understanding that this is misinformation. The company's entire perceived value is based on possible oil in its Orogrande Project. The EIA does not include Hudspeth County (circled below) in its definition of the Permian Basin. 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 . Is this happening to you frequently? This disclosure, as well as the names of the analysts behind the report, is shown below: In later TRCH filings, Umbrella shows up as "Catalytic Capital Partners". 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. SAN FRANCISCO, CA-- (Marketwired . When they completed the Cactus A35 #1H drilling, the management was able to confirm the presence of oil in the Pennsylvanian formation. Texas had 242 rigs, Baker Hughes reported, adding three in the last week. Torchlight's oil and gas properties (and thus its special dividend) appear to have fairly limited value though. . Browse LandWatch's Texas land for sale page to find more rural . Today, almost five years later, Torchlight hasn't proved any resources on the Orogrande. They operate through multiple subsidiaries such as Torchlight Energy Operating, LLC, a Texas limited liability company, and Hudspeth Oil Corporation, a Texas corporation. February 27, 2020. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. Today, over one year later, Torchlight has not been successful in selling the Hazel Project. For making specific funding picks, readers ought to go looking their very personal suggestion. Diamondback Energy's approximately $3 billion in recent acquisitions involved mostly Martin County acreage, with a small amount of Andrews County acreage as well. "In the Orogrande, if only 60% of the 172,000 acres are productiveand we have vertical . Torchlight is currently running low on cash and living off credit. . Located in Winkler County, Texas, the project includes 640 gross (67.2 net) acres. 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. 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. I wrote this article myself, and it expresses my own opinions. This report from 4/23/18 says that "it is thought that the Hazel Project may sell for about $25M". 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. 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. Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. The company paid a total consideration of 865,000 shares of Torchlight common stock and $100,000 in cash to the seller. 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 currently controls approximately 97,500 surface net acres, out of 134,000-acre continuous block, all of which are under University Lands. However, that comparison shows a lack of understanding about oil and gas assets and is not that much more valid than using Manhattan land values to value a parcel in rural Nevada just because both areas are part of the United States. This basin, known as the Orogrande . Engineers warn the new wells could produce as much as 50% less in some circumstances. 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 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. And, the Orogrande is all that Torchlight has. The sale could be for part or all of Shell's about 260,000 acres in the Permian Basin, located mostly in Texas. 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. (around 160 to 180 barrels per day with an almost 15% load recovery). 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. Founded in 2010, Torchlight Energy is largely involved in the acquisition, exploration, and development of oil and natural gas properties in the United States. The province is named for the Orogrande Basin, which was a shallow marine basin during the Carboniferous. Please disable your ad-blocker and refresh. 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. 72,727. There are . In April 2018, TRCH said it would sell its Hazel Project, but never did, and raised equity instead. Under a new law proposed by House Republicans, that price would go up to more than $2.50. Since commencing operations in 2013, the company has generated only $10.7 million in revenue while incurring $52.8 million in operating expenses and paying $14.4 million in interest expense, for a cumulative net loss of $83.9 million. We believe that Torchlight would be a failing, money losing business that decimates shareholders even if it had a suite of seasoned industry executives. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. This is under the "Current Projects" tab. The Permian Basin is an oil-and-gas-producing area located in West Texas and the adjoining area of southeastern New Mexico. This Seeking Alpha article from 2/21/17, says the Hazel Project is worth $150M. 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. It currently has interests in four oil and gas projects. 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. 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. The Orogrande basin is just 1 of the TRCH assets. Privacy Policy. 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.". However, analysts are expecting to range from anywhere between $1 per share and $20 per share. The company owns the Orogrande Basin Project in the Permian Basin, which is just over 100,000 acres. I wrote this article myself, and it expresses my own opinions. So that price per barrel is way down the line if even possible. I have no business relationship with any company whose stock is mentioned in this article. We have achieved all goals and are now ready to focus all efforts and capital into the Orogrande. 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. Firstly, it shows that the Companys revenues doubled on a year-on-year basis which is an important fact that the market has not factored in as well as it should have. Prices for top E&P stocks and commodities. 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 have been paid $25,000 (CASH) for & have been paid 0 shares of restricted frequent shares. Several months later, Mr. Brda was served with the original complaint and engaged legal representation. They leased the drill to Founders. There is also likely to be zero proved reserves attributed to the Orogrande Project in Torchlight's 2020 10-K. The Permian-Delaware basin is still valued at $30,000 per . 6. 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. 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. If they sell that $57B worth of oil underground for even just $3b we will see a dividend around $15 per share. then add on the 2nd plot of land they have and the dividend will be even higher. Join our community to receive exclusive research about various energy companies and other opportunities along with full access to my portfolio of historic research that now includes over 1,000 reports on over 100 companies. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. The Delaware Sub-basin encompasses the Hobbs area of southeastern New Mexico and four counties of West Texas. is in the process of . Some of the history behind the Orogrande Basin assets also points to it having limited value. PLANO, TX / ACCESSWIRE / May 21, 2019 / Torchlight Energy Resources, Inc. (NASDAQ: TRCH) ("Torchlight" or the "Company"), today provided an update regarding the Company's process addressing acquisition interest from industry majors in its Orogrande Basin Project.
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