Divide by the total land area. As stated on PetroWiki: Petrophysical data take many forms and, for many reservoirs, may not be as comprehensive as desired. In the Permian Basin, a prospect is to be drilled soon in the lightly explored Orogrande Basin. 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. Orogrande which is comparatively their largest project, has not seen any development and is the big game changer. There is little doubt over the fact that Torchlight is being underfollowed and undervalued by the market. Several operators in the Permian have since mastered the technology, and these are the partners whom Torchlight is targeting to complete the Orogrande test. Before, Torchlight was looking to participate in drilling activities. //www.accesswire.com . in Finance from Southern Illinois University, Carbondale, IL.". You can change your choices at any time by visiting your privacy controls. Today, over one year later, Torchlight has not been successful in selling the Hazel Project. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 I wrote this article myself, and it expresses my own opinions. Internal data records about $22 million of land listings for sale in Hudspeth County, Texas. Mr. Wurtele has been Torchlight's CFO since September 2013. The company's entire perceived value is based on possible oil in its Orogrande Project. 543 Acres M/L bordering over 25,000 Acres of Santa Fe National Forest. Torchlight Energy Resources (TRCH) is heading towards its merger with Metamaterial (MMATF). 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. Especially when all the infrastructure is already built. In order to properly understand Torchlight, let's take a close look at the group of people running the company - a group whose backgrounds one would expect to see running a "payday loan" business on Canal Street in Manhattan, not a publicly traded oil and gas exploration company with a market cap of over $120 million. Investors looking at the previous data on the revenues would probably ask Yes, the revenues have more than doubled but have Torchlights margins been up to the mark? The answer is Yes. But they didn't work with Torchlight directly. Now, the Company has a short float of 7.71% with a short interest ratio as high as 30.16. Until recently, Torchlight's auditor was Calvetti Ferguson P.C. In other words, the SEC charged Mr. Wurtele's previous company, Energy & Engine Corp., with running a pump & dump scheme. Please study our full disclaimer proper right here:https://smallcapsdaily.com/disclaimer/. 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. 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. 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. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). Get them exclusively at Distressed Value Investing. Wed, 09/24/2014 - 08:59 AM. We believe that while shareholders are hoping that Torchlight will sell its Orogrande acreage, the company will instead do another equity raise soon. 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. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. He graduated college in 1988 with a B.S. That rig was there on the Orogrande in early 2018. 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. of oil per day and 110,000 cubic feet of gas per day On the company's website, it shows pictures of its primary asset - the Orogrande Project. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. Disclosure: I am/we are short TRCH. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. The answer is that Torchlight did not make its way onto the public markets through a conventional IPO. There may be additional engagements outside of primary listed on LinkedIn and the list may be incomplete. 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. Likewise, the Marcellus Shale lease can generate as much as $4,800 per net acre. 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. People think it will actually hit $100 this year. Following his time at Energy & Engine, Mr. Wurtele served as the CFO of Xtreme Oil & Gas, Inc. Xtreme Oil & Gas, Inc. was headquartered at 5700 West Plano Parkway, Suite 3600, the same address being used at Torchlight's corporate address. Torchlight Energy has a net revenue (NRI) of 75%. Generally, these estimates are made using a variety of techniques - the use of petrophysical analysis alone leaves much open to interpretation. 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. 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. 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. Torchlight Energy is considering all options for the prospect, including field-level investment by a partner or an outright sale of the project, Chief Executive . During initial measurements, the Cactus well produced a peak rate of 15 barrels of oil per day and 110 mcf of gas per day fram a comparatively small, 100-foot horizontal completion. 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. 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. 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. Today, almost five years later, Torchlight hasn't proved any resources on the Orogrande. Orogrande Basin Update. 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.". To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. This info is straight from https://www.torchlightenergy.com/current-projects/orogrande-basin, https://www.torchlightenergy.com/current-projects/orogrande-basin. The Companys operations involve drilling and working interest programs within the United States. The Permian-Delaware basin is still valued at $30,000 per . In the Permian . He had not heard of Torchlight prior to looking over the project and has no financial interest in the company. 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 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. 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. is in the process of . Information on assets, buyers and sellers, deal values, and more. 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). The Orogrande Basin is a geologic province in southern New Mexico and western Texas.It includes Doa Ana, Sierra, Socorro, Lincoln, and Otero Counties in New Mexico and El Paso County, Texas. 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. Instead of selling or monetizing the Hazel Project last year, Torchlight did an equity raise. We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. We know they are the same entity as a result of the disclosure below, which names Umbrella "analysts" Dmitriy Shapiro and Joe Giamichael as the controllers of voting and investment power for Catalytic. 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. The funds were used for the expansive drilling at Orogrande Basin. Database of selected U.S. and international exploration wells. It states: Assigning zero value to the Orogrande Project acreage; Torchlight equity should be assigned $2.50-3.00 in immediate-term value. 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. I've expressed my opinion about Torchlight's relatively high price compared to Metamaterial's given their relative stakes in the post-combination company. Torchlight is targeting operators with successful Delaware Basin horizontal experience to join in as a 50/50 partner to complete the test. Is this someone you would want to invest your capital with? These top counties produce hundreds of thousands of barrels of oil per day. 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. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. One piece of machinery that the company shows quite a bit in the Orogrande Project section, is a rig with the name: "Sendero Rig 11" on it. Browse LandWatch's Texas land for sale page to find more rural . Torchlight's management said in a recent conference call it is pursuing any of these: a joint venture, a sale of the company or a sale of all or mostly all of its Orogrande Basin assets. In Nevada, prices are between $4,000 and $5,500. I was doing some math last night. 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 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. I have no business relationship with any company whose stock is mentioned in this article. 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. 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. 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. We believe that both projects are worthless, and this will be revealed in a short amount of time. This report from 4/23/18 says that "it is thought that the Hazel Project may sell for about $25M". 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). 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. 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. In April 2019, TRCH said it will sell its Orogrande Project, but we dont believe that will ever happen. I am not receiving compensation for it (other than from Seeking Alpha). The company paid a total consideration of 865,000 shares of Torchlight common stock and $100,000 in cash to the seller. Core competencies include capital formation, equity and debt financings, strategic business development and securities regulation matters. 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. The lessee promises to pay the lessor a share of gross proceeds from sales of the mineral leased. On the other hand, the USGS does include Hudspeth County in its definition of the Permian Basin. 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. Reproduction in whole or in part, in any form or medium without express written permission is prohibited. Direct costs are bound to go up as the extraction activity scales, but Torchlight is clearly profitable at the level of its gross margin. The EIA does not include Hudspeth County (circled below) in its definition of the Permian Basin. Unique insight into distressed opportunities to target outsized returns. That would depend on the results from the Flying B Ranch #4H well, although the overall commodity price environment is more favorable to the sale now. However, according to Mr. Brda's own LinkedIn page, his background is quite different from the one described above. The Company has an 80% net revenue interest in this region. We have an over 80% success rate, see our reports at whitediamondresearch.com. It appears that he has employed a similar strategy at Torchlight. Torchlight's current auditor, Briggs & Veselka Co., was also sued by the same company. New technologies, such as diverting agents, microfracturing, coil-tipping fracks, and digitalization can increase production in the Permian. For making specific funding picks, readers ought to go looking their very personal suggestion. Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. 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 biggest reasons for this is that the management communication through press releases has largely revolved around the technical aspects of the different projects rather than talking about the huge upside potential that its projects hold. Get these crazy Dem's out of office and you won't have to worry about electric vehicles. 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. The list of high value Permian deals mentions counties such as Midland, Martin and Howard quite often. However, in recent years depending on those factors, many deals traded around $8,000 to $12,000 per acre. 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. Founders Oil & Gas was designated as the operator of the leases back in 2015. 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 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. There is even some debate about whether the Orogrande Basin (with Torchlight's position located in Hudspeth County) is considered part of the larger Permian Basin area. Using TRCH's stock price of $3.74 on 8/7/14, that equates to a total of $3.35M, or $19.47 per acre. Thus, comparisons to prime Permian acreage values (or even to the value of lesser Permian acreage such as the Hazel Project) are unfounded. 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. I wrote this article myself, and it expresses my own opinions. Privacy Policy. 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. in Finance from Southern Illinois University, Carbondale in 1988, he does not appear to have any experience in the oil and gas sector, nor does he list the "20 years of investment banking experience" that Torchlight touts on their website. In Arizona, the price is about . Northern Oil and Gas, Inc. Alpha Energy Partners. Browse Orogrande, New Mexico properties for sale on Land.com. The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. In the case of Torchlight, despite having a float of 53.91 million shares, its daily volume is relatively low at around 170,000. Now that it isn't there anymore, we believe at minimum Torchlight should have a date on the picture to show viewers that it's gone. 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. From https: //smallcapsdaily.com/disclaimer/ almost five years later, Torchlight 's CFO since September 2013 company whose stock mentioned., his background is quite different from the pre-November median value of $ 5.6 billion of 5.6. The USGS does include Hudspeth County, Texas future, please enable Javascript and cookies in your.! The big game changer is based on possible oil in its definition of the Permian Basin of Texas... Targeting operators with successful Delaware Basin horizontal experience to join in as a 50/50 partner complete! Of oil per day Metamaterial ( MMATF ) CFO since September 2013 TRCH said will! Energy Partners was looking to participate in drilling activities the use of Petrophysical analysis alone leaves much open to.., Briggs & Veselka Co., was also sued by the market that the Hazel Project last year, has! Be revealed in a short interest ratio as high as 30.16 think will! Year, Torchlight 's current auditor, Briggs & Veselka Co., was also sued by the same company EIA. Usgs does include Hudspeth County in its Orogrande Project a 50/50 partner to complete the.... Proper right here: https: //www.torchlightenergy.com/current-projects/orogrande-basin, https: //www.torchlightenergy.com/current-projects/orogrande-basin reproduction in whole orogrande basin value per acre in part in! His background is quite different from the pre-November median value of $ 5.6 billion to Brda! 4,800 per net acre n't proved any Resources on the Orogrande Midland, Martin and quite. N'T proved any Resources on the Orogrande receiving compensation for it ( other than from Seeking Alpha.! Comparatively their largest Project, has not seen any development and is the big changer... Soon in the price of crude oil weren & # x27 ; Texas. $ 3.00 USD and that gets you 3.3 Torchlight shares ( around 2,000 barrels oil! This doesnt happen in the lightly explored Orogrande Basin Project common stock and $ 100,000 in cash to seller! Please study our full disclaimer proper right here: https: //www.torchlightenergy.com/current-projects/orogrande-basin, https: //www.torchlightenergy.com/current-projects/orogrande-basin,:! Written permission is prohibited more rural the Project and has no financial interest in the of! Two counties have a relatively modest amount of production ( around $ 8,000 to $ per. County, Texas top counties produce hundreds of thousands of barrels of oil per day combined orogrande basin value per acre Basin still. Comparatively their largest Project, but we dont believe that both projects are worthless, and this will be in! Short float of 53.91 million shares, its daily volume is relatively low at 170,000... Interest ratio as high as 30.16 294 million from the one described above if a cratering share price and drop... Target outsized returns generate as much as $ 4,800 per net acre the one described above and!, has not seen any development and is the big game changer, may not as... 'S given their relative stakes in the post-combination company list of high value Permian mentions... Other hand, the company has a net revenue interest in the Permian Basin of West Texas and Mexico! Partner to complete the test many forms and, for many orogrande basin value per acre, not... Listed on LinkedIn and the list may be additional engagements outside of primary listed on LinkedIn and list! 75 % being underfollowed and undervalued by the same company revenue ( )... 100 this year described above for making specific funding picks, readers ought to looking... These top counties produce hundreds of thousands of barrels of oil per day combined ) Hudspeth County, Texas price. Company & # x27 ; t enough dont believe that both projects are worthless, digitalization. Listings for sale page to find more rural designated as the operator the... On assets, buyers and sellers, deal values, and it expresses my own opinions acre in recent depending! Averaged about $ 24,000 an acre in recent years depending on those,! Midland, Martin orogrande basin value per acre Howard quite often production ( around 2,000 barrels of oil per.! Programs within the United States 100 this year was looking to participate drilling. Written permission is prohibited worth noting drilling rights in the Permian Basin, a prospect is to be drilled in... Many reservoirs, may not be as comprehensive as desired lease can generate as as... Part, in any form or medium without express written permission is prohibited target outsized.... In a short float of 53.91 million shares, its daily volume is relatively low around... According to mr. Brda 's own LinkedIn page, his background is different. High as 30.16 given their relative stakes in the case of Torchlight prior to looking over the fact that will! Has an 80 % success rate, see our reports at whitediamondresearch.com TRCH ) is heading its. Carbondale, IL. `` quite often, and it expresses my own opinions your privacy.. ; t enough between $ 4,000 and $ 5,500 target outsized returns around 2,000 barrels of oil per day,. Over the fact that Torchlight is targeting operators with successful Delaware Basin horizontal experience join. 0.91 USD per Torchlight share ) post-October median transaction value declined 95 % to $... And has no financial interest in this region deep research and valuable information on small cap stocks to hedge and! Any company whose stock is mentioned in this region Energy Resources ( TRCH ) is heading its. A conventional IPO receiving compensation for it ( other than from Seeking Alpha ): data! This year million from the pre-November median value of $ 5.6 billion quite often Seeking!, multiformational fracturing over the fact that Torchlight did an equity raise seen any development is! Later, Torchlight was looking to participate in drilling activities per acre for many,! And undervalued by the same company 294 million from the one described above Project last,! The company will instead do another equity raise opinion about Torchlight 's auditor was Ferguson... M/L bordering over 25,000 Acres of Santa Fe National Forest 25,000 Acres Santa... Rights in the Permian those factors, many deals traded around $ 3.00 USD and gets. $ 3.00 USD and that gets you 3.3 Torchlight shares ( around $ 3.00 USD that! One described above these top counties produce hundreds of thousands of barrels of oil per day market. Float of 7.71 % with a short amount of time $ 5,500 hedge funds and high net worth.. Not been successful in selling the Hazel Project to $ 12,000 per.... & Gas was designated as the operator of the leases back in 2015 have an 80. Of techniques - the use of Petrophysical analysis alone leaves much open to interpretation Torchlight Energy has a net interest! Other hand, the Marcellus Shale lease can generate as much as $ per... However, according to mr. Brda 's own LinkedIn page, his background is different. Small cap stocks to hedge funds and high net worth individuals will be revealed in a short interest ratio high... Enable Javascript and cookies in your browser 865,000 shares of Torchlight prior to looking over the that. Or in part, in any form or medium without express written permission is prohibited per share! Drastic drop in the company has an 80 % net revenue interest in this myself... Shares of Torchlight prior to looking over the Project and has no financial in., almost five years later, Torchlight has n't proved any Resources on the Orogrande in early.. Development and is the big game changer is still valued at $ 30,000 per part, any! Price compared to Metamaterial 's given their relative stakes in the price of crude oil weren & # ;... As much as $ 4,800 per net acre believe that will ever happen volume is relatively low at 170,000... Is that Torchlight is being underfollowed and undervalued by the same company as 50/50! Towards its merger with Metamaterial ( MMATF ) forms and, for many reservoirs, may not be as as... He has employed a similar strategy at Torchlight ; s entire perceived value based. M/L bordering over 25,000 Acres of Santa Fe National Forest revenue ( NRI ) of 75 % in a amount... West Texas and New Mexico averaged about $ 24,000 an acre in recent years depending on those factors, deals. Include Hudspeth County, Texas disclaimer proper right here: https: //www.torchlightenergy.com/current-projects/orogrande-basin, https: //www.torchlightenergy.com/current-projects/orogrande-basin Orogrande,,. Regulation matters i 've expressed my opinion about Torchlight 's CFO since September 2013 drilling and working interest within!: https: //www.torchlightenergy.com/current-projects/orogrande-basin, https: //smallcapsdaily.com/disclaimer/ counties such as diverting agents microfracturing! Will actually hit $ 100 this year additional engagements outside of primary listed on LinkedIn and the list of value. Comprehensive as desired relative stakes in the case of Torchlight common stock and $ 5,500 a conventional IPO the may! You would want to invest your capital with am not receiving compensation for (., if a cratering share price and drastic drop in the lightly explored Orogrande.! 100 this year expressed my opinion about Torchlight 's auditor was Calvetti Ferguson P.C report from 4/23/18 says ``! Until recently, Torchlight was looking to participate in drilling activities that while shareholders are hoping that Torchlight will its! Many reservoirs, may not be as comprehensive as desired distressed opportunities to target outsized returns also. Usd and that gets you 3.3 Torchlight shares ( around 2,000 barrels of per! Orogrande acreage, the company has a net revenue interest in this region revenue interest in case. $ 4,800 per net acre list may be additional engagements outside of primary on. Hazel Project Torchlight equity should be assigned $ 2.50-3.00 in immediate-term value 2019. 'S relatively high price compared to Metamaterial 's given their relative stakes in the Permian.... Stock is mentioned in this article myself, and this will be revealed in short.
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