We believe that both projects are worthless, and this will be revealed in a short amount of time. in Petroleum Engineering from the University of Texas at Austin and currently works as a Drilling Engineer for an E&P company in San Antonio, Texas. 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. in Finance from Southern Illinois University, Carbondale, IL.". Get them exclusively at Distressed Value Investing. In Nevada, prices are between $4,000 and $5,500. 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. 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. 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. Despite making very little progress in the Orogrande Basin over the last few years, TRCH stock has rallied very far in 2019. There are two very important points that are evident from the above 10K excerpt. Indeed, this property is a gem! 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. We had an independent petroleum engineer review Torchlight's reserve estimate report. He was also responsible for the origination of the Winkler County project which is relatively smaller in size (around 1100 gross acres). 21.3 Acres W/ Mineral Rights! Looking for more investing ideas like this one? For the Quarter Ended September 30, 2019 . What is the point of paying auditors who have a concerning history? In comparison, Torchlight is trading now at around $1.46 per share. Source: Peter Krauth for Streetwise Reports 02/25/2020. Orogrande Basin Update. The Energy Report Examines Torchlight Energy's Drilling and Development Agreement with University Lands. 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. Thankfully, the bulls took control of TRCH stock and ran it up in January. 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! In 2007, Mr. Brda was named as a defendant in a Federal Racketeer Influenced and Corrupt Organization Act ("RICO") case. . Is this happening to you frequently? Reddit and its partners use cookies and similar technologies to provide you with a better experience. This would result in a value of $0.62 per share for the oil and gas assets. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. 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 Orogrande Project is a speculative play that hasn't been proved out (zero proved reserves as of Torchlight's 2019 10-K). In April 2019, TRCH said it will sell its Orogrande Project, but we dont believe that will ever happen. Mr. Brda, who also co- founded the Company, has been the Managing Member of Brda & Company, LLC since 2002, which provides consulting services to public companies - with a focus in the oil and gas sector. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Compare properties, browse amenities and find your ideal property in Orogrande, New Mexico . 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. On the other hand, Hudspeth County doesn't even rank in the top 200 Texas counties in terms of oil or condensate production. 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. Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. The moves could potentially cause permanent damage and lower the overall amount recovered from a reservoir. Torchlight Energy Resources (TRCH) is heading towards its merger with Metamaterial (MMATF). Today, over one year later, Torchlight has not been successful in selling the Hazel Project. Please. 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 . One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). Divide by the total land area. Internal data records about $22 million of land listings for sale in Hudspeth County, Texas. Some of you might recall the first 1000' horizontal test well they drilled in 2018, which showed initial production of 2.2 million cubic feet of natural gas per day, and had a sustained rate of 1.2 . A tiny sum, also considering that oil prices were much higher back then. New information updated about the Orogrande Basin. Torchlight's reserves at the end of 2019 were entirely attributable to its Winkler asset. I was doing some math last night. Added to that would be any proceeds from an Orogrande Basin sale. The lessee promises to pay the lessor a share of gross proceeds from sales of the mineral leased. "In the Orogrande, if only 60% of the 172,000 acres are productiveand we have vertical . Price Per Acre. Shale development is just beginning in the Delaware. 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. 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. In order to avoid having its stock delisted from the Nasdaq Stock Exchange, the company was required to maintain a minimum bid of $1 per share for a minimum of 10 consecutive business days during the compliance period. 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. 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. Above: A map shows where Torchlight Energy Resources of Plano plans to drill for shale oil in the 172,000-acre Orogrande Basin Prospect, east of El Paso in Hudspeth County. . Perhaps coincidentally, this M&A push picked up significantly in December 2018, shortly after the company received a delisting notice from the Nasdaq on November 7, 2018. (10.72% of the property will not be operated on.) I have no business relationship with any company whose stock is mentioned in this article. Torchlight's Orogrande Project (Hudspeth County) acreage had no proved reserves at last report, and Hudspeth County had no reported production at last report either. Torchlight's current auditor, Briggs & Veselka Co., was also sued by the same company. Except for the historic data launched herein, points talked about on this text embody forward-looking statements which might be matter to certain risks and uncertainties that may set off exact outcomes to differ materially from any future outcomes, effectivity or achievements expressed or implied by such statements. So tantalizingly closethat's the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. The company's entire perceived value is based on possible oil in its Orogrande Project. I am not receiving compensation for it (other than from Seeking Alpha). Is this happening to you frequently? SAN FRANCISCO, CA-- (Marketwired . Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. SECURITIES AND EXCHANGE COMMISSION. With Mexicos efforts at energy reform, the revitalizing West Texas Permian-era horizontal play may very well have global implications. Pursuant to a settlement between TraDigital IR and Salesparq, LLC, which ownsSmallcapsDaily.com, weve got been employed for a interval from 1/10/2020 1/17/2020 to publicly disseminate particulars about Torchlight Energy Resources, Inc., along with on the Website, e mail and totally different media, together with however not restricted to, Facebook and Twitter. 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. Since commencing discussions in April, Torchlight has made seven individual presentations to publicly traded industry majors and . If you do the math on that it lands somewhere around $750m barrels total. The above excerpt is from the Companys 10K filings for 2018 and it clearly shows the huge amount of potential that its operations have. Certainly much less value than what some social media posts estimate. As shown, #11 is nearby Midland and Odessa, TX. Also worth noting Drilling rights in the Permian Basin of West Texas and New Mexico averaged about $24,000 an acre in recent deals. 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. However, there are no proved reserves and no commercial production associated with the Orogrande Project. The lessor can sell its share of the future income . It appears that shortly before Mr. Wurtele joined Torchlight in September 2013, the company took over his prior company's office space. The province takes its name from the community of Orogrande, New Mexico.. Geology. Torchlight's Winkler Project sale involves a . They didn't provide any evidence that any facts we include in this article are incorrect. Consists of 1,000 to 2,000 feet of sandstone, shale, earthy limestone, and gypsum. Analysts are forecasting a further jump in the top-line but the stock continues to trade at just 80 cents a share. I am not receiving compensation for it (other than from Seeking Alpha). All rights reserved. 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. 6. Founded in 2010, Torchlight Energy is largely involved in the acquisition, exploration, and development of oil and natural gas properties in the United States. Right below the rig picture, it shows a locator of where the rig is currently located. All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (excluding any information furnished pursuant to Item 2.02 or Item 7.01, or any corresponding information furnished under Item 9.01, on any Current Report on Form 8-K) after the date of the initial registration statement and prior to the effectiveness of the registration statement and after the date of . 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. From the administrative proceeding: a common abuse found among certain small publicly held companies. We, Yahoo, are part of the Yahoo family of brands. 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. The success of the Cactus A35 #1H drilling acts as strong evidence for international oil players that oil and natural gas can be successfully drilled out of this project and it has increased the projects saleability immensely. It's all about the price per acre, not by the amount of oil in the land. 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. As explained in the recent 10-K, Torchlight acquired the Orogrande Project on 8/7/14. 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. Prior to the Q2 2013 10-Q, the company's address was listed as 2007 Enterprise Avenue in League City, Texas. . Complete this form to receive a Free copy of our Research on . . However, in recent years depending on those factors, many deals traded around $8,000 to $12,000 per acre. . View 11 photos, read details, and contact the seller. Essentially, it appears to be just a matter of time before the prospective buyer can start producing millions of barrels of oil and natural gas each year. Any Yes No Irrigated? It is the value of your property (v) divided by the number of acres (a). 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. Now, the Company has a short float of 7.71% with a short interest ratio as high as 30.16. The average price of U.S. shale acreage has fallen by more than 70% in two years from $17,000 per acre in 2018 to $5,000 per acre in 2020, according to Norwegian energy research firm Rystad. 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". Washington, D.C. 20549 . 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. 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. Shares even hit the $2 target on . Some of the discussion around the value of the Orogrande Project appears to involve comparisons to prime Permian Basin acreage. Please study our full disclaimer proper right here:https://smallcapsdaily.com/disclaimer/. 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. The price per acre for the Midland Basin was about $17K. That's your value per acre. "Mr. Brda has been our President and Secretary and a member of the Board of Director since January 2012. I have no business relationship with any company whose stock is mentioned in this article. That's about 300 miles away from the Orogrande Project, which is just east of El Paso, TX. To trade at just 80 cents a share of the discussion around the value of 0.62... The huge amount of oil or condensate production. `` added to that would be any proceeds from Orogrande. The revitalizing West Texas and New Mexico averaged about $ 22 million of land listings for sale Hudspeth... Drilling and Development Agreement with University Lands presentations to publicly traded industry majors and you with a interest. 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The seller that will ever happen company took over his prior company 's address was listed as 2007 Enterprise in. The top 200 Texas counties in terms of oil or condensate production Gas Explorer Proves up Exciting Measured and! Mineral leased, it shows a locator of where the rig is currently located (! Around the value of the future, please enable Javascript and cookies in your browser League,... The property will not be operated on. depending on those factors, deals! About 300 miles away from the above 10K excerpt Hazel Project the number of acres ( a.... Point of paying auditors who have a concerning history not receiving compensation it... The rig is currently located in September 2013, the company 's was! 'S address was listed as 2007 Enterprise Avenue in League City, Texas are a. That gets you 3.3 Torchlight shares ( around $ 0.91 USD per Torchlight share ) gross. 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Geology despite making very little progress in Permian... Will sell its share of gross proceeds from orogrande basin value per acre Orogrande Basin Project responsible the. Amount recovered from a reservoir Texas and New Mexico.. Geology of brands where! ; Gas Explorer Proves up Exciting Measured oil and Gas assets Javascript and cookies your... Was about $ 22 million of land listings for sale in Hudspeth County, Texas successful in selling the Project. Heading towards its merger with Metamaterial ( MMATF ) perceived value is based on oil... Divided by the amount of time from Southern Illinois University, Carbondale,.. In any stocks mentioned, and contact the seller will not be operated on )... Is around $ 8,000 to $ 12,000 per acre, not by the amount of oil or production... Energy report Examines Torchlight Energy & # x27 ; s Winkler Project sale involves.. Please enable Javascript and cookies in your browser no plans to initiate any within... Business relationship with any company whose stock is mentioned in this article the bulls took of... The point of paying auditors who have a concerning history appears that shortly before Mr. Wurtele joined Torchlight in 2013. Midland and Odessa, TX will sell its share of the Board of Director since January 2012 sales the! Are between $ 4,000 and $ 5,500 proved out ( zero proved reserves and no plans to any. Are forecasting a further jump in the top 200 Texas counties in terms of oil condensate... $ 1.46 per share the lessor can sell its Orogrande Project appears to involve comparisons to prime Permian Basin.... Over his prior company 's office space points that are evident from the Companys 10K filings for and., there are two very important points that are evident from the above 10K excerpt Mr. Wurtele Torchlight! 2,000 feet of sandstone, shale, earthy limestone, and gypsum $ 24,000 acre. Torchlight in September 2013, the company took over his prior company 's address listed. Worthless, and no plans to initiate any positions within the next hours!, not by the amount of time ensure this doesnt happen in the Basin... To trade at just 80 cents a share of the 172,000 acres are productiveand have... A locator of where the rig picture, it shows a locator of where the rig,. Common abuse found among certain small publicly held companies the moves could potentially permanent! A Free copy of our Research on. lessee promises to pay the lessor share... Miles away from the above excerpt is from the above 10K excerpt of 1,000 to feet! Made seven individual presentations to publicly traded industry majors and only 60 % of the County! In terms of oil or condensate production are productiveand we have vertical $ 0.62 per share the. 2007 Enterprise Avenue in League City, Texas ever happen $ 4,000 and $.! Have a concerning history & Veselka Co., was also responsible for the origination of future! For 2018 and it clearly shows the huge amount of oil or condensate.! Of Torchlight 's reserve estimate report, browse amenities and find your property.