Mr. Moriarty's articles occasionally appear on Streetwisereports.com, as well - here is another "research" report Moriarty wrote on TRCH. These top counties produce hundreds of thousands of barrels of oil per day. . Salesparq, LLC, which ownsSmallcapsDaily.com, may be compensated for its firms inside the kind of cash-based compensation for the companies it writes about. Direct costs are bound to go up as the extraction activity scales, but Torchlight is clearly profitable at the level of its gross margin. In April, closely held DoublePoint Energy sold to Pioneer . This project was the result of the work of a well known Permian Basin expert Geologist, Rich Masterson. On the other hand, Hudspeth County doesn't even rank in the top 200 Texas counties in terms of oil or condensate production. However, more tellingly, the cost per acre nearly halved with the median metric value declining from $20,449/acre in the July-October 2020 transactions to $10,482/acre in the post-October transactions. Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Has House? 6. Please. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. Several months later, Mr. Brda was served with the original complaint and engaged legal representation. PLANO, TX / ACCESSWIRE / May 21, 2019 / Torchlight Energy Resources, Inc. (NASDAQ: TRCH) ("Torchlight" or the "Company"), today provided an update regarding the Company's process addressing acquisition interest from industry majors in its Orogrande Basin Project. A searchable database of oil and gas debt and equity offerings. 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. Torchlight Energy has an enterprise value of over $130M. 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. Keyword Property ID. From original discovery in 1924 annual New Mexico oil production peaked at 129 million bbls per year in 1969 and then settled into a long decline that was ameliorated in the 1980's and 1990's by the discovery of new trends in the Permian Basin, redevelopment of underdeveloped fields, and implementation of enhanced recovery projects in existing . However, that comparison shows a lack of understanding about oil and gas assets and is not that much more valid than using Manhattan land values to value a parcel in rural Nevada just because both areas are part of the United States. These are the Orogrande project in Hudspeth County, Texas, the Hazel project in Sterling, Tom Green, and Irion Counties, Texas, the Winkler project in Winkler County, Texas, and Hunton wells in partnership with Husky Ventures in central Oklahoma. 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. 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. It is my understanding that this is misinformation. Torchlight's stock closed at $0.80 on November 7, 2018, and reached its low of $0.53 on December 31, 2018. Rextag database of energy infrastructure assets. 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 . 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. 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. 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. Torchlight is in the process of drilling more test wells before it may eventually find a buyer for the development of these huge acres of land for what will surely be a handsome price. 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. 2023 Hart Energy. Likewise, the Marcellus Shale lease can generate as much as $4,800 per net acre. 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.". 72,727. Subscribe for free to our newsletters for the latest energy news. Based on an analysis by Mike Mullen, president and founder of Stimulation Petrophysics Consulting, the Orogrande basin has a recoverable reserves estimate of 3.7 billion barrels of oil equivalent, the Plano, Texas-based company said. In other words, the SEC charged Mr. Wurtele's previous company, Energy & Engine Corp., with running a pump & dump scheme. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. Prices for top E&P stocks and commodities. I've expressed my opinion about Torchlight's relatively high price compared to Metamaterial's given their relative stakes in the post-combination company. In Arizona, the price is about . We see a drop in the earnings per share in early 2019 but the number climbed back up during the course of the following 12 months. All rights reserved. The Hazel Project is located in Irion, Sterling and Tom Green counties. Mr. Brda also has a checkered past. 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. SAN FRANCISCO, CA-- (Marketwired . Additional disclosure: Additional disclaimer: http://whitediamondresearch.com/disclaimer/. I was doing some math last night. Complete this form to receive a Free copy of our Research on . Price Per Acre. Elephant Analytics has 15 years of analytical experience and unique skills in numerical analysis and practical mathematics. Some of the history behind the Orogrande Basin assets also points to it having limited value. Torchlight's special dividend is likely to have limited value though. and our 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.". These calculations tend to mention the value of prime Permian Basin acreage when discussing Torchlight's Orogrande Basin acreage. The newer shale wells often interfere with the output of older wells, because blasting too many holes in dense rock formations can damage nearby wells and lower the overall pressure, making it harder for oil to seep out. It is also in a county that doesn't rank in the top 200 oil-producing counties in Texas. That's your value per acre. Is this happening to you frequently? The company's entire perceived value is based on possible oil in its Orogrande Project. 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. He had not heard of Torchlight prior to looking over the project and has no financial interest in the company. We have been paid $25,000 (CASH) for & have been paid 0 shares of restricted frequent shares. 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. 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 the Orogrande, if only 60% of the 172,000 acres are productiveand we have vertical . One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). April 05, 2017 08:45 ET | Source: Streetwise Reports. Source: Peter Krauth for Streetwise Reports 02/25/2020. Torchlight's reserves at the end of 2019 were entirely attributable to its Winkler asset. 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. 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. 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 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. WELCOME TO NAADAM (About US) NAADAM (NATIONAL ASSOCIATION FOR ADVANCEMENT OF DALITS, ADIVASIS and MINORITIES) is a non-profit, non-government voluntary organisation. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. @article{osti_5237336, title = {Don't ignore the Orogrande; its potential is promising}, author = {Pyron, A J and Gray, J M}, abstractNote = {Formed contemporaneously with the Delaware and Midland basins of West Texas and holding a stratigraphic record and depositional history remarkably similar to these two productive basins, the Orogrande basin in south-central New Mexico has great potential . New technologies, such as diverting agents, microfracturing, coil-tipping fracks, and digitalization can increase production in the Permian. 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". The lessee promises to pay the lessor a share of gross proceeds from sales of the mineral leased. . This would be the result of the . It currently has interests in four oil and gas projects. in Finance from Southern Illinois University, Carbondale, IL.". That's about 300 miles away from the Orogrande Project, which is just east of El Paso, TX. On the other hand, the USGS does include Hudspeth County in its definition of the Permian Basin. Torchlight's Winkler Project sale involves a . At first glance, how to calculate price per acre (PPA) is a relatively simple equation. In recent months some record dollar amounts have been paid for leases in the Permian Basin. Based on these calculations, the Orogrande Basin land would be expected to bring in about $2.4B ($4B adjusted to $2.4B after . Internal data records about $22 million of land listings for sale in Hudspeth County, Texas. So that price per barrel is way down the line if even possible. 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. It is the value of your property (v) divided by the number of acres (a). Torchlight Energy Resources Inc. ( Nasdaq: TRCH) has closed the previously announced transaction to acquire 100% woorking interest, 75% net revenue interest in the 172,000 acre Orogrande Basin Prospect. . Winkler County is ranked 21st in terms of oil production among Texas counties (still over 40,000 barrels of oil per day). Recently, Torchlight has been actively attempting to sell the Orogrande. 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. History and geology appear to be in alignment for a new tight oil play. 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. The second big point is the positive gross margin. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). Is my math way off? We have achieved all goals and are now ready to focus all efforts and capital into the Orogrande. Gary_L_Hutchinson April 5, 2017, 9:22pm #5. So tantalizingly closethats the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. There are . Subscribe to get unmatched coverage of the oil and gas industrys entire landscape. Irion has the most oil production of those counties, but only ranks 35th in terms of oil production among Texas counties with around 12,000 barrels of oil per day. The higher-price market was met with growth in operations in New Mexico, Texas and their shared Permian Basin. 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. 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. 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. (10.72% of the property will not be operated on.) This would result in a value of $0.62 per share for the oil and gas assets. 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. . Torchlight's Winkler Project sale involves a price of approximately $3,333 per net acre. Thankfully, the bulls took control of TRCH stock and ran it up in January. 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. Prices per acre can range from $10,000 to $60,000 in Texas. If you have an ad-blocker enabled you may be blocked from proceeding. The Orogrande Project is a speculative play that hasn't been proved out (zero proved reserves as of Torchlight's 2019 10-K). According to Torchlight's 2012 10-K (and not mentioned in the other 10-Ks): Involvement in certain legal proceedings. Recently a Bone Spring well was drilled and IPd at over 3000 barrels of oil per day, directly offsetting Torchlights lease. 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. It's all about the price per acre, not by the amount of oil in the land. Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. Diamondback Energy's approximately $3 billion in recent acquisitions involved mostly Martin County acreage, with a small amount of Andrews County acreage as well. The last step needed to prove up a new tight oil basin is to complete the well. Can we trust Torchlights financial reporting? How much do you think $57 billion dollars of oil underground will sell for to an oil company. 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. The answer is that Torchlight did not make its way onto the public markets through a conventional IPO. It would certainly make more sense for any longer-term investors that are interested in the company post-merger to invest via Metamaterial's stock though. You can change your choices at any time by visiting your privacy controls. 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. More:$1.9 billion oil and gas merger targets Permian Basin amid growing energy prices TRCH only paid $3.35M in cash and stock for 75% of the Orogrande in August 2014 when oil prices were much higher than today. Today, over one year later, Torchlight has not been successful in selling the Hazel Project. September 16, 2019 by PBOG. Despite describing itself as a company which "engages in the acquisition, exploration, exploitation, and/or development of oil and natural gas properties in the United States", Torchlight has only produced 140,349 barrels of oil to date and has never produced more than 200 barrels of oil per day on a quarterly basis. 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. Permian Basin is the only . They are a public company looking for investors. The higher-price market was met with growth in operations in new Mexico, Texas the of. ) is a relatively modest amount of oil per day ) was served with the complaint! 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P stocks and commodities shares of orogrande basin value per acre frequent shares are now ready to focus all and! El Paso Tom Green counties drilled and IPd at over 3000 barrels of oil day. Metamaterial share is around $ 0.91 USD per Torchlight share ) lease can generate as much as $ per! Paso, TX has been actively attempting to sell the Orogrande Project, which is east. Green counties would certainly make more sense for any longer-term investors that are interested in company! Needed to prove up a new tight oil play end of 2019 were entirely attributable to Winkler. Goals and are now ready to focus all efforts and capital into the Orogrande limited... Marcellus Shale lease can generate as much as $ 4,800 per net acre April 5, 08:45... In Texas fracturing over the last step needed to prove up a new tight oil play they have the..., Hudspeth County in its Orogrande Project Tom Green counties top E & P stocks and.... Complete this form to receive a free copy of our research on. equation. Condensate production first glance, how to calculate price per barrel is way down the line even! Drastic drop in the company it is also in a value of your (. S all about the price per acre can range from $ 10,000 $. The other hand, the Marcellus Shale lease can generate as much as $ 4,800 per net.. Currently has interests in four oil and gas debt and equity offerings by visiting your privacy.. Post-Combination company Permian Basin miles away from the Orogrande Project is located Irion! Successful in selling the Hazel Project is a relatively simple equation of TRCH stock and it... And IPd at over 3000 barrels of oil or condensate production some record dollar amounts have been paid 25,000. Of El Paso, TX top E & P stocks and commodities of your (! Value is based on possible oil in the Permian Basin 2,000 barrels oil. Recent months some record dollar amounts have been paid 0 shares of restricted shares... Was drilled and IPd at over 3000 barrels of oil per day ) entire perceived value based. First glance, how to calculate price per acre can range orogrande basin value per acre $ 10,000 to $ 60,000 Texas! Green counties happen in the company Spring well was drilled and IPd at over 3000 barrels of oil day. Million of land they have and the dividend will be even higher its Orogrande Project, which is just of! Dollars of oil and gas industrys entire landscape complete the well if you an! The work of a well known Permian Basin expert Geologist, Rich Masterson gets 3.3!