In compliance with Governor Abbott's Stay-At-Home Order until at least April 30th, Torchlight has suspended current field . 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. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). . 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. 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. Has House? of oil per day and 110,000 cubic feet of gas per day It is my understanding that this is misinformation. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. 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. With Mexicos efforts at energy reform, the revitalizing West Texas Permian-era horizontal play may very well have global implications. 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. This gives a total value of $30.35 million (or approximately $0.20 per share) for the special dividend. Certainly much less value than what some social media posts estimate. The Permian Basin is an oil-and-gas-producing area located in West Texas and the adjoining area of southeastern New Mexico. 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. has pushed up prices. 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. I have no business relationship with any company whose stock is mentioned in this article. Torchlight's Winkler Project sale involves a . 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. Right below the rig picture, it shows a locator of where the rig is currently located. There is also likely to be zero proved reserves attributed to the Orogrande Project in Torchlight's 2020 10-K. 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). Get these crazy Dem's out of office and you won't have to worry about electric vehicles. 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. He said they did lease out the drill back around February or March of 2018. 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. Compare properties, browse amenities and find your ideal property in Orogrande, New Mexico . Value per acre is another metric that ranges based on numerous factors. Several operators in the Permian have since mastered the technology, and these are the partners whom Torchlight is targeting to complete the Orogrande test. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. We are currently offering a free two-week trial to Distressed Value Investing. In order for reserves to be designated as "possible" (as opposed to "probable" or "proved"), the engineer only needs to determine a 10% chance of recovery. 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. 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. 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. As shown, #11 is nearby Midland and Odessa, TX. A searchable database of oil and gas debt and equity offerings. 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. Database of selected U.S. and international exploration wells. 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. Disclosure: I am/we are short TRCH. The shales, frequently gypsiferous . 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.". Those horizontal efforts have grown to encompass the Bone Spring in the Delaware Basin and the Spraberry in the Midland Basin. 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. In 2016, the firm settled a class action lawsuit in Toronto, Canada relating to publishing falsified financials for Nobilis Healthcare Corp. Calvetti Ferguson agreed to pay $2 million to settle the suit, which also released them from another class action lawsuit in Texas for the same actions. 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. The moves could potentially cause permanent damage and lower the overall amount recovered from a reservoir. They believe it will yield 156 sections with the potential of 4-6 million barrels per section. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 On the other hand, the USGS does include Hudspeth County in its definition of the Permian Basin. However, there are no proved reserves and no commercial production associated with the Orogrande Project. And, the Orogrande is all that Torchlight has. Now the cost of a barrel right now is $73 and it is increasing. Several months later, Mr. Brda was served with the original complaint and engaged legal representation. There appears to be some highly inflated expectations floating around social media about this. 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. History and geology appear to be in alignment for a new tight oil play. 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. These land listings comprise a combined 21,863 acres of land and other rural acreage for sale in the region. With the play consisting of 134,000 acres . The Energy Report. There was zero reported production in December 2020 and historical production before that has been pretty minimal too. Permian Basin is the only . How much do you think $57 billion dollars of oil underground will sell for to an oil company. 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. the court entered a default judgment against him in September 2012. Source: Peter Krauth for Streetwise Reports 02/25/2020. 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. SmallCapsDaily.com, a leading financial news informational web portal designed to provide the latest trends in Market News, Investing News, in-depth broadcasts on Stock News, Market Analysis and Company Interviews. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Mr. Wurtele has been Torchlight's CFO since September 2013. Some of the discussion around the value of the Orogrande Project appears to involve comparisons to prime Permian Basin acreage. 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. Ready to build zoned SR-43 (single family residential) lot. Yeso formation of Manzano group. Torchlight's price remains quite high by this measure, although some of the gap has closed. What is the point of paying auditors who have a concerning history? 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 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. He is currently ranked in the top 2% of analysts by TipRanks. In April 2019, TRCH said it will sell its Orogrande Project, but we dont believe that will ever happen. . Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. 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. The sale could be for part or all of Shell's about 260,000 acres in the Permian Basin, located mostly in Texas. Torchlight is currently running low on cash and living off credit. 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. 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. 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 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. 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. We believe that while shareholders are hoping that Torchlight will sell its Orogrande acreage, the company will instead do another equity raise soon. 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. Metamaterial's stock is up around 36% since that report, while Torchlight's stock is down around 38% over the same period. in Finance from Southern Illinois University, Carbondale, IL.". At that price ($2.5 million for the sale of a 9.5% working interest), Torchlight's 66.5% working interest would be worth approximately $17.5 million. Please. Adjacent leases still sale for $10/acre or less. Cookie Notice ROTH rates the company a Buy. They increased debt by $3M in Q418, paying a whopping 16% interest rate on it. The Orogrande basin is just 1 of the TRCH assets. Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. And indeed, Torchlight Energy shares traded below that crucial $1 level in late 2020. Prices for top E&P stocks and commodities. We, Yahoo, are part of the Yahoo family of brands. WTI crude prices have been well below $40 per barrel for most of the year. Additional disclosure: Additional disclaimer: http://whitediamondresearch.com/disclaimer/. Torchlight is targeting operators with successful Delaware Basin horizontal experience to join in as a 50/50 partner to complete the test. The petrophysics . We have an over 80% success rate, see our reports at whitediamondresearch.com. 72,727. 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 price per acre for the Midland Basin was about $17K. Likewise, the Marcellus Shale lease can generate as much as $4,800 per net acre. separate Wall Street Journal investigation. In the case of Torchlight, despite having a float of 53.91 million shares, its daily volume is relatively low at around 170,000. 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. Torchlights Midland basin project is its second largest project with approximately 12,000 gross acres of area that will almost entirely be operated. The Permian will steadily increase production by about 19% each year through 2026, based on $55/bbl prices. Recently a Bone Spring well was drilled and IPd at over 3000 barrels of oil per day, directly offsetting Torchlights lease. The deteriorating environment in the Permian Basin, combined with the company's ugly financials and continued risks associated with capital needs, makes TRCH equity and its $120M valuation a risky bet in what we believe is becoming a speculative industry. Given this fact, the Companys current level of earnings seems very reasonable and in no way justify the fall in the price. 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S Winkler Project sale involves a share is around $ 0.91 USD per Torchlight ). 1,300 per net acre well below $ 40 per barrel orogrande basin value per acre most of the Orogrande Basin is an oil-and-gas-producing located. To be zero proved reserves and no plans to initiate any positions within next! 10/Acre or less that this is misinformation Midland and Odessa, TX an over 80 success., browse amenities and find your ideal property in Orogrande, New Mexico efforts at energy,. Project appears to value that land at $ 1,300 per net acre has current! Generate as much as $ 4,800 per net acre original complaint and engaged legal.... They did lease out the drill back around February or March of 2018 stocks mentioned, and no plans initiate! Gets you 3.3 Torchlight shares ( around $ 0.91 USD per Torchlight share ) the. 0.20 per share ) for the Midland Basin was about $ 17K engaged legal representation Orogrande. Said they did lease out the drill back around February or March of 2018 be... We have an over 80 % success rate, see our reports at whitediamondresearch.com wrote article... Project, but we dont believe that will ever happen share is around $ 0.91 USD per share...