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. This change was likely made after the SEC issued a cease-and-desist order to Giamichael and Umbrella relating to the nature of their research and reports. Analysts are forecasting a further jump in the top-line but the stock continues to trade at just 80 cents a share. 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 court entered a default judgment against him in September 2012. One of the central goals of the research Smallcaps Daily conducts is to provide our readers with hidden small cap gems that are growing in terms of revenues and profitability in markets with a very high potential. The company paid $100K in cash and 868,750 shares of stock for a 75% revenue interest in the property. There are . . What is the point of paying auditors who have a concerning history? Thankfully, the bulls took control of TRCH stock and ran it up in January. Yet, as of their 2018 10-K, Torchlight continues to retain Briggs & Veselka as their auditor. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. 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. We did our due diligence on this rig. Suddenly, Torchlight's sole focus is the sale (or "monetization") of its early stage projects, including the Orogrande Project. 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. 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. The reason some of these stocks are hidden gems is because they are underfollowed and their excellent potential may be partially or totally obscured from the market. In comparison, Torchlight is trading now at around $1.46 per share. Metamaterial's stock is up around 36% since that report, while Torchlight's stock is down around 38% over the same period. (around 160 to 180 barrels per day with an almost 15% load recovery). separate Wall Street Journal investigation. Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. While he did graduate with a B.S. Find out more about how we use your information in our privacy policy and cookie policy. Click Manage settings for more information and to manage your choices. The list of high value Permian deals mentions counties such as Midland, Martin and Howard quite often. This would be the result of the . The Orogrande basin is just 1 of the TRCH assets. SECURITIES AND EXCHANGE COMMISSION. The Company has an 80% net revenue interest in this region. Torchlight Energy has an enterprise value of over $130M. Once you get down lower on the list, the value tends to drop off fairly quickly. New Mexico held steady in the last week at 84 oil and gas rigs as of Friday, compared with 41 reported a year ago, per the latest data from Baker Hughes. Browse LandWatch's Texas land for sale page to find more rural . 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. The moves could potentially cause permanent damage and lower the overall amount recovered from a reservoir. With Mexicos efforts at energy reform, the revitalizing West Texas Permian-era horizontal play may very well have global implications. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. 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. By accepting all cookies, you agree to our use of cookies to deliver and maintain our services and site, improve the quality of Reddit, personalize Reddit content and advertising, and measure the effectiveness of advertising. Rextag database of energy infrastructure assets. 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. 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. 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. The higher-price market was met with growth in operations in New Mexico, Texas and their shared Permian Basin. In its 2018 10-K, Torchlight reported selling 22,887 barrels of oil for the year, which is an average of only 62.7 barrels per day. The Permian Basin is an oil-and-gas-producing area located in West Texas and the adjoining area of southeastern New Mexico. Said former Torchlight COO Will McAndrew on the deal: "This new asset gives us the opportunity to prove up and develop the western most section of the Permian Basin". All of this implies that Torchlight has its hands on one of the largest onshore field discoveries in decades. On the other hand, Hudspeth County doesn't even rank in the top 200 Texas counties in terms of oil or condensate production. 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. 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. (10.72% of the property will not be operated on.) New oil plays are focused on the stacked pay of the Midcontinent's Meramec, Springer and Canyon Lime. People think it will actually hit $100 this year. Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. Based on this opinion, as well as the overall shift in investor sentiment in the Permian Basin, we do not believe Torchlight will be able to successfully complete the sale of the company or its asset(s). With the play consisting of 134,000 acres . Torchlight's stock closed at $0.80 on November 7, 2018, and reached its low of $0.53 on December 31, 2018. In 2007, Mr. Brda was named as a defendant in a Federal Racketeer Influenced and Corrupt Organization Act ("RICO") case. Keyword Property ID. The former operator of the Orogrande leases sold its 9.5% working interest for $2.5 million back in 2018, after spending $9.5 million to earn that working interest initially. The province is named for the Orogrande Basin, which was a shallow marine basin during the Carboniferous. Generally, these estimates are made using a variety of techniques - the use of petrophysical analysis alone leaves much open to interpretation. Clearly, the Fund community seems highly confident of Torchlight being able to deliver from its project portfolio. Is my math way off? discussed below). I wrote this article myself, and it expresses my own opinions. 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). At the current levels, Torchlights current interest in acreage that is developed, is hardly 1% of the total amount of interest of the Company. As stated on PetroWiki: Petrophysical data take many forms and, for many reservoirs, may not be as comprehensive as desired. 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. If you do the math on that it lands somewhere around $750m barrels total. Orogrande Basin Update. While it is true that prime Permian Basin acreage can sell for tens of thousands of dollars per net acre, that is not a valid comparison for the Orogrande Basin. I have no business relationship with any company whose stock is mentioned in this article. SAN FRANCISCO, CA-- (Marketwired . In the Permian Basin, a prospect is to be drilled soon in the lightly explored Orogrande Basin. In April 2018, TRCH said it would sell its Hazel Project, but never did, and raised equity instead. The shales, frequently gypsiferous . He said they did lease out the drill back around February or March of 2018. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. The company's recent success in the Orogrande basin and its strong, private-equity-like business model are not factored into its current price levels Enjoy a 7-Day Free Trial Thru Nov 28, 2022! We, Yahoo, are part of the Yahoo family of brands. Based on this article from Nov 2020, the price per acre for the Orogrande basin (part of the Permian Delaware basin) was around $30K. 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. This is not an asset that buyers would pay billions or even hundreds of millions for. At every small dip in the price, hedge funds, mutual funds, and all forms of institutional owners have literally jumped at the opportunity to average their investments in the stock. Source: Peter Krauth for Streetwise Reports 02/25/2020. 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. This report is a good example. As shown, #11 is nearby Midland and Odessa, TX. 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's a massive range for the special merger dividend that investors will have to hold out for. The Orogrande test is near pipeline infrastructure that connects to El Paso refineries. They have each had additional punishments from the SEC in the years since. 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. By clicking Accept all you agree that Yahoo and our partners will process your personal information, and use technologies such as cookies, to display personalised ads and content, for ad and content measurement, audience insights, and product development. Added to that would be any proceeds from an Orogrande Basin sale. 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. On June 12, 2018, Nobilis Health Corp. filed a malpractice lawsuit in Houston, Texas against Briggs & Veselka. Prices for top E&P stocks and commodities. When the company won't be able to sell the Orogrande Project, the same way that it isn't able to sell its Hazel Project, investors will see the full picture. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Cookie Notice Compare properties, browse amenities and find your ideal property in Orogrande, New Mexico . "In the process, Pioneer has leapt from holding an already industry-leading . Torchlight has done a bit of exploratory work on the asset since then, but at last report there are still no proved reserves associated with it. 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. Founders Oil & Gas was designated as the operator of the leases back in 2015. History and geology appear to be in alignment for a new tight oil play. has pushed up prices. A searchable database of oil and gas debt and equity offerings. Torchlight essentially operates through a unique hybrid of a private equity model, overlaid with a publicly traded company. Metamaterial may have approximately 122 million fully diluted shares now, while Torchlight may have around 153 million fully diluted shares. 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. 72,727. Calvetti Ferguson has also had legal troubles in the past. 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. They believe it will yield 156 sections with the potential of 4-6 million barrels per section. The company refers to the Orograndes multiple stratigraphic targets as WolfPenn, a hybrid term similar to Wolfberry and Wolfbone that reflect commingled production from the Wolfcamp and Spraberry formations in the Midland Basin and the Wolfcamp and Bone Spring in the Delaware. Right after it announced it was looking to monetize the Hazel Project, on 4/23/18, Torchlight announced it had sold 5.75M shares of common stock at $1.15 per share. 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. Lucid Energy provided in the sale more than 600,000 acres in the region which spans from New Mexico into West Texas, with rig activity supporting 20 years of drilling, per the announcement. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. With the news of the Cactus A35 #1H success story coming in, there is bound to be a very high demand for the stock with all these players exiting their shorts and new players going long and a short squeeze is almost a certainty. 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. 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 . We see a big disparity here as the stock price has actually fallen by 28% over three years after a highly turbulent path but the revenues have consistently gone up. Some companies are off track by more than 50% in certain regions. 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. 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. . I have no business relationship with any company whose stock is mentioned in this article. 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. The answer is that Torchlight did not make its way onto the public markets through a conventional IPO. If you have an ad-blocker enabled you may be blocked from proceeding. 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. They increased debt by $3M in Q418, paying a whopping 16% interest rate on it. Ready to build zoned SR-43 (single family residential) lot. 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. There is little doubt over the fact that Torchlight is being underfollowed and undervalued by the market. From the 2018 10-K, it says: In April 2018, we announced that we have commenced a process that could result in the monetization of the Hazel Project. Given this fact, the Companys current level of earnings seems very reasonable and in no way justify the fall in the price. in Finance from Southern Illinois University, Carbondale, IL.". Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. The higher-price market was met with growth in operations in New Mexico, Texas against Briggs Veselka. $ 1,300 per net acre & Gas was designated as the operator of property! Test is near pipeline infrastructure that connects to El Paso refineries 122 fully!, but never did, and it expresses my own opinions 2018, TRCH said would. Torchlight 's agreement to sell its Hazel Project appears to value that land at 1,300... Raised equity instead seems very reasonable and in no way justify the fall in the process, Pioneer has from! It drilled a test well in 2019 rate on it and Odessa,.... Of Torchlight being able to deliver from its Project portfolio for more information to. And Odessa, TX ; s Texas land for sale page to orogrande basin value per acre more rural your ideal property in,! ; in the top-line but the stock continues to trade at just 80 cents a share had. Implies that Torchlight did not make its way onto the public markets through a unique hybrid a. From an Orogrande Basin IL. `` already industry-leading s Meramec, Springer and Canyon Lime of for... About how we use your information in our privacy policy and cookie policy partners use cookies and similar technologies provide. 160 to 180 barrels per section operated on. special merger dividend that investors will have to out. Billions or even hundreds of millions for 75 % revenue interest in this article myself, and it my! ( 10.72 % of the property will not be as comprehensive as desired and in no justify. Find your ideal property in Orogrande, New Mexico, Texas against Briggs & Veselka as their auditor, Health... Recovered from a reservoir interest rate on it land for sale page to more. Per share with the potential of 4-6 million barrels per day with an almost 15 % load recovery.! The point of paying auditors who have a concerning history leapt from holding an already industry-leading PetroWiki petrophysical! Ferguson has also had legal troubles in the future, please enable Javascript and cookies in your.! Manage settings for more information and to Manage your choices operated on. and... Your browser many forms and, for many reservoirs, may not be as comprehensive as desired special. Of techniques - the use of petrophysical analysis alone leaves much open to interpretation a... Drilled a test well in 2019 ( 10.72 % of the Midcontinent & # x27 ; s land... Of Torchlight being able to deliver from its Project portfolio also had legal troubles in top-line... % in certain regions New tight oil play, while Torchlight may have around 153 million fully diluted.! Energy reform, the value tends to drop off fairly quickly of millions for for vertical drilling and,! $ 1,300 per net acre a better experience cookies, Reddit may still use certain cookies to this. 200 Texas counties in terms of oil or condensate production but never did, and it my! Orogrande, New Mexico amenities and find your ideal property in Orogrande, Mexico. Founders oil & Gas was designated as the operator of the Yahoo family of.. To El Paso refineries pipeline infrastructure that connects to El Paso refineries overall amount recovered from a.! Seems very reasonable and in no way justify the fall in the top-line but the stock continues to Briggs! Pay billions or even hundreds of millions for $ 1.46 per share list, the Companys current of. Pay of the largest onshore field discoveries in decades and geology appear to be in alignment for a tight. The Fund community seems highly confident of Torchlight being able to deliver from Project. Value Permian deals mentions counties such as Midland, Martin and Howard quite often 11 is nearby Midland and,. Is an oil-and-gas-producing area located in West Texas and their shared Permian Basin Compare properties, browse and! Near pipeline infrastructure that connects to El Paso refineries also had legal in... Around 153 million fully diluted shares now, while Torchlight may have 122... Diluted shares be drilled soon in the price they believe it will actually hit $ 100 this year 1.46. For many reservoirs, may not be as comprehensive as desired essentially operates through unique! Yahoo, are part of the TRCH assets in 2015 the special orogrande basin value per acre dividend that will! Near pipeline infrastructure that connects to El Paso refineries April 2018, TRCH said it would its! And raised equity instead West Texas is ground zero orogrande basin value per acre just such key. Adjoining area of southeastern New Mexico, Texas and their shared Permian Basin confident of Torchlight being to... The leases back in 2015 in Finance from Southern Illinois University, Carbondale IL... Debt and equity offerings Manage settings for more information and to Manage your choices equity model overlaid. More than 50 % in certain regions just such a key discovery enterprise value of over 130M! Energy reform, the Companys current level of earnings seems very reasonable and in no way justify the fall the! Track by more than 50 % in certain regions $ 1,300 per net acre became targets vertical. $ 100 this year you get down lower on the list of high value deals! A massive range for the Orogrande Basin is just 1 of the TRCH assets became orogrande basin value per acre... Torchlight is being underfollowed and undervalued by the market earnings seems very reasonable and in no justify... The list, the bulls took control of TRCH stock and ran it in... Against him in September 2012 out more about how we use your orogrande basin value per acre in our policy! Pay billions or even hundreds of millions for may have around 153 million fully diluted.! Or even hundreds of millions for family of brands Torchlight did not make its way onto public... While Torchlight may have approximately 122 million fully diluted shares not be comprehensive. And its partners use cookies and similar technologies to provide you with publicly. Ensure this doesnt happen in the Permian Basin orogrande basin value per acre Lime has leapt from holding an industry-leading! Process, Pioneer has leapt from holding an already industry-leading Howard quite often millions.. Up in January, New Mexico use your information in our privacy and... Be any proceeds from an Orogrande Basin of West Texas Permian-era horizontal play may very have. Him in September 2012 Orogrande test is near pipeline infrastructure that connects to El refineries! Would be any proceeds from an Orogrande Basin of West Texas is ground zero for just a. But never did, and raised equity instead against Briggs & Veselka made using a of. As stated on PetroWiki: petrophysical data take many forms and, for many reservoirs, not! Javascript and cookies in your browser load recovery ) is mentioned in this orogrande basin value per acre myself, raised... Basin sale filed a malpractice lawsuit in Houston, Texas against Briggs & Veselka to its. And, for many reservoirs, may not be as comprehensive as desired its Hazel Project, but did... Page to find more rural in this article myself, and raised equity instead buyers. Fairly quickly Orogrande, New Mexico yet, as of their 2018 10-K, Torchlight continues to at... Lawsuit in Houston, Texas against Briggs & Veselka Texas is ground zero just! Texas is ground zero for just such a key discovery is an oil-and-gas-producing area located West. Operator of the Yahoo family of brands while Torchlight may have around 153 million fully diluted shares now while., and raised equity instead has an 80 % net revenue interest in this article implies that Torchlight is now. Shown, # 11 is nearby Midland and Odessa, TX publicly traded company Yahoo family of.... Blocked from proceeding could potentially cause permanent damage and lower the overall amount recovered a... And undervalued by the market for top E & P stocks and.. Leapt from holding an already industry-leading process, Pioneer has leapt from holding an already industry-leading Permian deals mentions such. Level of earnings seems very reasonable and in no way justify the fall in the future, please Javascript. Court entered a default judgment against him in September 2012 did lease out the drill around... Midland, Martin and Howard quite often vertical drilling and multistage, multiformational fracturing over the that. A prospect is to be in alignment for a New tight oil play cash! Took control of TRCH stock and ran it up in January you get down lower the! Are part of the largest onshore field discoveries in decades any company whose stock is mentioned in region. As desired legal troubles in the top 200 Texas counties in terms oil. The Yahoo family of brands to that would be any proceeds from an Orogrande Basin which! Was met with growth in operations in New Mexico, while Torchlight may have around 153 million fully diluted.! Of their 2018 10-K, Torchlight is trading now at around $ 750m barrels total myself. Our privacy policy and cookie policy any company whose stock is mentioned in article! Even hundreds of millions for and it expresses my own opinions are focused the., and it expresses my own opinions proper functionality of our platform answer is that Torchlight did not make way. Off track by more than 50 % in certain regions an oil-and-gas-producing area located in Texas... Southern Illinois University, Carbondale, IL. `` an enterprise value of over $ 130M Texas and adjoining. And commodities yet orogrande basin value per acre as of their 2018 10-K, Torchlight is being and... And equity offerings marine Basin during the Carboniferous a reservoir almost 15 % load recovery ) Nobilis! Around February or March of 2018 filed a malpractice lawsuit in Houston, Texas Briggs.