Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. Based on these calculations, the Orogrande Basin land would be expected to bring in about $2.4B ($4B adjusted to $2.4B after . This required Mr. Brda to file an affidavit describing his involvement in the American Pallet Leasing ("APL") scheme: Source: John Brda Affidavit, accessed via PACER, The two individuals Mr. Brda did business with at APL were Craig Medoff and Curt Kramer. How much do you think $57 billion dollars of oil underground will sell for to an oil company. If you have an ad-blocker enabled you may be blocked from proceeding. Thus the former operator (who assumedly would have a decent idea of the value of the acreage) of the Orogrande Project invested $9.5 million in the project, but ended up selling its stake for $2.5 million. Has House? Is my math way off? !, 21.3 acres in Fabens, Texas offered at $200. . But they didn't work with Torchlight directly. 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. Added to that would be any proceeds from an Orogrande Basin sale. 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). 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. Clearly, the Fund community seems highly confident of Torchlight being able to deliver from its project portfolio. Until recently, Torchlight's auditor was Calvetti Ferguson P.C. 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. 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). 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. Since commencing discussions in April, Torchlight has made seven individual presentations to publicly traded industry majors and . I wrote this article myself, and it expresses my own opinions. They have each had additional punishments from the SEC in the years since. Such efforts by the management to improve the efficiency of extraction will go a long way in reducing the indirect costs and improving the profitability and shareholder value in the long term. The Orogrande basin is just 1 of the TRCH assets. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). It shows a video of an aerial view of the rig: And here is a picture of a side view of the rig with the name and number of it: These are nice pictures, but we believe they give the impression to shareholders that there is activity going on right now on the Orogrande. Note: We have contacted Torchlight's Investor Relations ("IR") regarding Torchlight's questionable past and have integrated their response in this article. Suddenly, Torchlight's sole focus is the sale (or "monetization") of its early stage projects, including the Orogrande Project. If you do the math on that it lands somewhere around $750m barrels total. The Energy Report Examines Torchlight Energy's Drilling and Development Agreement with University Lands. Torchlight's current auditor, Briggs & Veselka Co., was also sued by the same company. Salesparq, LLC, which ownsSmallcapsDaily.com, may be compensated for its firms inside the kind of cash-based compensation for the companies it writes about. . company with a market cap of over $120 million. Price Per Acre. 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. The Hazel Project is located in Irion, Sterling and Tom Green counties. "Mr. Brda has been our President and Secretary and a member of the Board of Director since January 2012. "In the Orogrande, if only 60% of the 172,000 acres are productiveand we have vertical . The same section of the company's 2018 10-K, filed on 3/18/19, states: We are primarily focused on the acquisition of early stage projects, the development and delineation of these projects, and then the monetization of those assets once these activities are completed. Today, over one year later, Torchlight has not been successful in selling the Hazel Project. 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 . 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. We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. Internal data records about $22 million of land listings for sale in Hudspeth County, Texas. Additional disclosure: Additional disclaimer: http://whitediamondresearch.com/disclaimer/. separate Wall Street Journal investigation. Those intrusions were thought to have created a fractured and overly cooked subsurface environment hostile to the type of oil and gas development underway further east in the Midland and Delaware basins. 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.". Mr. Brda's motion to vacate was accepted by the court, contingent upon Mr. Brda's compliance with his settlement. 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. 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. is in the process of . Thankfully, the bulls took control of TRCH stock and ran it up in January. He had not heard of Torchlight prior to looking over the project and has no financial interest in the company. SAN FRANCISCO, CA-- (Marketwired . 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.". Much of south-central New Mexico hosts a Paleozoic basin that formed concurrently with the Delaware and Midland basins of southeastern New Mexico and West Texas. . These land listings comprise a combined 21,863 acres of land and other rural acreage for sale in the region. Torchlight Energy has an enterprise value of over $130M. 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. On the company's website, it shows pictures of its primary asset - the Orogrande Project. That's a massive range for the special merger dividend that investors will have to hold out for. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 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. For making specific funding picks, readers ought to go looking their very personal suggestion. TRCH only paid $3.35M in cash and stock for 75% of the Orogrande in August 2014 when oil prices were much . 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. Shale development is just beginning in the Delaware. 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. 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. In recent years, many such companies have hired stock promoters to tout their shares on stock-picking websites and through mass-mailed e-mail messages (commonly known as "spam"). Gary_L_Hutchinson April 5, 2017, 9:22pm #5. He is currently ranked in the top 2% of analysts by TipRanks. $23,529. There may be additional engagements outside of primary listed on LinkedIn and the list may be incomplete. There are laws that keep them from lying, that's why they call them 'possible', but when it comes to rocks a mile under the ground, it's easy to say you see things that are promising. Keyword Property ID. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. Mr. Moriarty's articles occasionally appear on Streetwisereports.com, as well - here is another "research" report Moriarty wrote on TRCH. Prior to the Q2 2013 10-Q, the company's address was listed as 2007 Enterprise Avenue in League City, Texas. We have achieved all goals and are now ready to focus all efforts and capital into the Orogrande. There are . Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. 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. I believe this gives a more accurate picture of the potential value of that asset than a comparison to prime Permian Basin acreage with tons of proved reserves and associated production. The company's entire perceived value is based on possible oil in its Orogrande Project. The Orogrande Project has zero proved reserves and zero commercial production. 09-30-2022. TRCH has little cash with increasing debt, and if it cannot sell the Orogrande, we believe the company is finished. History and geology appear to be in alignment for a new tight oil play. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). However, analysts are expecting to range from anywhere between $1 per share and $20 per share. Prices for top E&P stocks and commodities. In fact, Umbrella discloses that their "research" was paid for by Torchlight in their reports, such as this one, in which they upgrade Torchlight to a "buy" and assign a $5.00 price target. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. A tiny sum, also considering that oil prices were much higher back then. . 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. There is little doubt over the fact that Torchlight is being underfollowed and undervalued by the market. Ready to build zoned SR-43 (single family residential) lot. 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. Please disable your ad-blocker and refresh. I wrote this article myself, and it expresses my own opinions. Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. I am not receiving compensation for it (other than from Seeking Alpha). Torchlights Midland basin project is its second largest project with approximately 12,000 gross acres of area that will almost entirely be operated. Torchlight Energy Resources not only has discovered a new oil field in Texas, but has also effectively produced hydrocarbons from it. 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! However, in recent years depending on those factors, many deals traded around $8,000 to $12,000 per acre. NOG Acquires Northern Delaware/Permian Assets for $157 Million. 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). Right now, the average price for a loaf of bread is, approximately, $1.87. 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. Browse LandWatch's Texas land for sale page to find more rural . 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