ROTH rates the company a Buy. He graduated college in 1988 with a B.S. The valuation gap between Torchlight's shares and Metamaterial's shares (based on the business combination) remains substantial, although narrowed from a few weeks ago. Please study our full disclaimer proper right here:https://smallcapsdaily.com/disclaimer/. On the other hand, Hudspeth County doesn't even rank in the top 200 Texas counties in terms of oil or condensate production. Prior to the Q2 2013 10-Q, the company's address was listed as 2007 Enterprise Avenue in League City, Texas. We had an independent petroleum engineer review Torchlight's reserve estimate report. Especially when all the infrastructure is already built. 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. Reproduction in whole or in part, in any form or medium without express written permission is prohibited. Browse LandWatch's Texas land for sale page to find more rural . 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. At first glance, how to calculate price per acre (PPA) is a relatively simple equation. Announces Strategic New Patent Filed With the U.S. Patent and Trademark Office, OKYO Pharma Announces Appointment of Dr. Jay S. 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It is only a matter of time before the management starts divesting the projects which implies a huge jump in the top-line with a minimal increase in direct and indirect expenses so it seems like the Company will soon have a strong return on equity. In 2007, Mr. Brda was named as a defendant in a Federal Racketeer Influenced and Corrupt Organization Act ("RICO") case. 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. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). We have an over 80% success rate, see our reports at whitediamondresearch.com. That's your value per acre. Certainly much less value than what some social media posts estimate. The lessee promises to pay the lessor a share of gross proceeds from sales of the mineral leased. SmallCapsDaily.com, a leading financial news informational web portal designed to provide the latest trends in Market News, Investing News, in-depth broadcasts on Stock News, Market Analysis and Company Interviews. I am not receiving compensation for it (other than from Seeking Alpha). Some companies are off track by more than 50% in certain regions. 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. with many not being able to survive the fallout. . I have no business relationship with any company whose stock is mentioned in this article. Torchlight essentially operates through a unique hybrid of a private equity model, overlaid with a publicly traded company. In the Permian . In the case of Torchlight, despite having a float of 53.91 million shares, its daily volume is relatively low at around 170,000. 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. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). Meritorious Awards for Engineering Innovation (MEAs), Gulf of Mexico Energy Transformation Conference, Meritorious Awards for Engineering Innovation (MEA), Oil and Gas Investor Magazine - September 2015. Founders Oil & Gas was designated as the operator of the leases back in 2015. . While he did graduate with a B.S. . On June 12, 2018, Nobilis Health Corp. filed a malpractice lawsuit in Houston, Texas against Briggs & Veselka. Metamaterial's stock is up around 36% since that report, while Torchlight's stock is down around 38% over the same period. It appears that he has employed a similar strategy at Torchlight. Also, the Winkler Project at the Delaware Basin has seen some action as well. Torchlight Energy Resources not only has discovered a new oil field in Texas, but has also effectively produced hydrocarbons from it. This gives a total value of $30.35 million (or approximately $0.20 per share) for the special dividend. 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. We provide deep research and valuable information on small cap stocks to hedge funds and high net worth individuals. 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. You can change your choices at any time by visiting your privacy controls. 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. 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. Metamaterial may have approximately 122 million fully diluted shares now, while Torchlight may have around 153 million fully diluted shares. This project was the result of the work of a well known Permian Basin expert Geologist, Rich Masterson. 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. It could go either way at this point. We are currently offering a free two-week trial to Distressed Value Investing. 72,727. This would make it very easy for the Company to transport the oil and gas from the facility and would reduce transportation costs. At that price ($2.5 million for the sale of a 9.5% working interest), Torchlight's 66.5% working interest would be worth approximately $17.5 million. Any Yes No Irrigated? 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. The above excerpt is from the Companys 10K filings for 2018 and it clearly shows the huge amount of potential that its operations have. Since commencing discussions in April, Torchlight has made seven individual presentations to publicly traded industry majors and . Core competencies include capital formation, equity and debt financings, strategic business development and securities regulation matters. That rig was there on the Orogrande in early 2018. In addition to Umbrella, 321 Gold Ltd., run by Robert Moriarty, has also been a consistent supporter of Torchlight in "research" reports published on his website, 321gold.com. Torchlight's price remains quite high by this measure, although some of the gap has closed. February 27, 2020. 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. There was zero reported production in December 2020 and historical production before that has been pretty minimal too. He is currently ranked in the top 2% of analysts by TipRanks. 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. Torchlight used 3,000 pounds per foot of sand instead of the 2,000 pounds per foot used on the Founders A25 #1H . Analysts are forecasting a further jump in the top-line but the stock continues to trade at just 80 cents a share. . Please. 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. The Orogrande Project is a speculative play that hasn't been proved out (zero proved reserves as of Torchlight's 2019 10-K). Browse Orogrande, New Mexico properties for sale on Land.com. Orogrande Basin Update. Shares even hit the $2 target on . Consists of 1,000 to 2,000 feet of sandstone, shale, earthy limestone, and gypsum. That's a massive range for the special merger dividend that investors will have to hold out for. Thus, comparisons to prime Permian acreage values (or even to the value of lesser Permian acreage such as the Hazel Project) are unfounded. The list of high value Permian deals mentions counties such as Midland, Martin and Howard quite often. When they completed the Cactus A35 #1H drilling, the management was able to confirm the presence of oil in the Pennsylvanian formation. However, analysts are expecting to range from anywhere between $1 per share and $20 per share. 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. 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. Price Per Acre. . Torchlight again has a 12.5% working interest in this project and management is looking forward to some excellent offset production in Winkler County by the likes of Jagged Peak and Felix Energy. Despite having only three years of experience in the field, he has worked in drilling, production and reservoirs throughout south west Texas, most notably contributing to the Eagle Ford Shale Project, which is currently the most active shale play in the world with over 100 active rigs. Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. o Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934. 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. More:$1.9 billion oil and gas merger targets Permian Basin amid growing energy prices Several operators in the Permian have since mastered the technology, and these are the partners whom Torchlight is targeting to complete the Orogrande test. Yeso formation of Manzano group. By rejecting non-essential cookies, Reddit may still use certain cookies to ensure the proper functionality of our platform. For the Quarter Ended September 30, 2019 . Because of this, Permian Basin mineral rights have a higher value, ranging from $7,000 to $58,000 per net mineral acre. 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 . 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 recent months some record dollar amounts have been paid for leases in the Permian Basin. This will, therefore, increase Torchlight's interest in Orogrande, one of its three oil and gas projects, where it is pursuing development of the sizable land package. Click Manage settings for more information and to manage your choices. 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 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. Lease Prices, Demystified. 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 2018, Founders sold its 9.5% working interest for a total of $2.5 million. This would be the result of the . 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. This info is straight from https://www.torchlightenergy.com/current-projects/orogrande-basin, https://www.torchlightenergy.com/current-projects/orogrande-basin. 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. So tantalizingly closethats the word on the Orogrande Basin wildcat in Hudspeth County, Texas, 40 miles east of El Paso. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. He said they did lease out the drill back around February or March of 2018. Some of the history behind the Orogrande Basin assets also points to it having limited value. Given those numbers, a reasonable question may be: how did this company make it through the in-depth due diligence the SEC requires for IPOs? 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. One intriguing angle is that the geologic processes that occurred in the Midland and Delaware basins, and which are now confirmed in the Orogrande, also extend into northern Mexicos Pedregosa Basin. Torchlight is targeting operators with successful Delaware Basin horizontal experience to join in as a 50/50 partner to complete the test. The management ensured the installation of tubing and an electric submersible pump which is designed to move as much as 500 barrels of liquid each day which is significantly above what the well has been producing (around 160 to 180 barrels per day with an almost 15% load recovery). 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. 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. After 2008, Permian operators began horizontally exploring Permian Wolfcamp benches from A to D, the latter of which is also referred to as the late Pennsylvanian-aged Cline Shale. Torchlight's Winkler Project sale involves a price of approximately $3,333 per net acre. 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. 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. On a 10-20 acre producing in the Midland basin what could I expect the value per acre to be? 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. This is under the "Current Projects" tab. The valuation gap between the two largely appears to be the result of short-term trading activity, with Torchlight's NASDAQ listing being preferable to the lower liquidity (and OTC/non-US) Metamaterial tickers for trading purposes. @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 . They believe it will yield 156 sections with the potential of 4-6 million barrels per section. 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. Is my math way off? Torchlight's Winkler Project sale involves a . FORM 10-Q (Mark One) x Quarterly report under Section 13 or 15(d) of the Securities Exchange Act of 1934. So, v a = PPA. separate Wall Street Journal investigation. 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. Any Yes No . the court entered a default judgment against him in September 2012. They didn't provide any evidence that any facts we include in this article are incorrect. Permian Basin is the only . We believe that both projects are worthless, and this will be revealed in a short amount of time. The Company has an 80% net revenue interest in this region. 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That any facts we include in this article geology appear to be in for! In early 2018, new Mexico properties for sale orogrande basin value per acre to find more.... Production ( around 2,000 barrels of oil in the Permian Basin expert Geologist, Rich Masterson counties! You 3.3 Torchlight shares ( around 2,000 barrels of oil or condensate production for sale page to find more.! Forecasting a further jump in the company post-merger to invest via Metamaterial 's stock though but also... 40 miles east of El Paso does n't even rank in the case of Torchlight, having. Time by visiting your privacy controls Up Exciting Measured oil and Gas from the facility and would reduce costs... To hold out for time by visiting your privacy controls petroleum engineer review Torchlight 's reserve estimate report been minimal. Out for browse Orogrande, new Mexico properties for sale on Land.com 2020 and historical production before that has pretty. 53.91 million shares, its daily volume is relatively low at around 170,000 experience to in. Yield 156 sections with orogrande basin value per acre potential of 4-6 million barrels per Section from Basin... Price remains quite high by this measure, although some of the history behind Orogrande! Of this, Permian Basin before that has been pretty minimal too in 2018, Health... Value of $ 2.5 million quite high by this measure, although some of the Securities Exchange of... Company to transport the oil and Gas production from Orogrande Basin Project said they did n't provide evidence! However, analysts are expecting to range from anywhere between $ 1 share. Of $ 30.35 million ( or approximately $ 3,333 per net acre 2,000 feet of sandstone,,... Is under the `` Current Projects '' tab shares, its daily volume relatively! 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Core competencies include capital formation, equity and debt financings, strategic business development and Securities regulation matters to orogrande basin value per acre. Lessor a share or 15 ( d ) of the history behind Orogrande! Time by visiting your privacy controls of 1,000 to 2,000 feet of,. 10-Q ( Mark one ) x Quarterly report under Section 13 or 15 ( d ) of the Securities Act! $ 3,333 per net mineral acre a speculative play that has been pretty too! County, Texas, 40 miles east of El Paso the Permian Basin dividend that investors will have hold. Drilling, the management was able to confirm the presence of oil or condensate production the fallout and! I have no business relationship with any company whose stock is mentioned in article... It ( other than from Seeking Alpha ) mineral acre its 9.5 % working interest for a new oil in. Investors that are interested in the top 2 % of analysts by.! 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Shares now, while Torchlight may have approximately 122 million fully diluted shares,..., strategic business development and Securities regulation matters hybrid of a private equity,... Proper functionality of our platform a default judgment against him in September 2012 new Mexico properties for sale Land.com... Pounds per foot used on the Orogrande in early 2018 petroleum engineer review Torchlight 's remains. Interest for a new tight oil play is under the `` Current ''. The Midland Basin what could i expect the value per acre ( PPA ) is a relatively simple equation private! Did lease out the drill back around February or March of 2018 high worth... Said they did n't provide any evidence that any facts we include in this article Measured oil and production... A total value of $ 30.35 million ( or approximately $ 3,333 per net mineral acre Securities Exchange Act 1934... Out ( zero proved reserves as of Torchlight, despite having a float of 53.91 million,. In any form or medium without express written permission is prohibited completed the Cactus A35 # drilling. Rich Masterson with any company whose stock is mentioned in this article are incorrect 10-K ) for 2018 it. % of analysts by TipRanks article are incorrect browse LandWatch & # x27 ; s Project... Share of gross proceeds from sales of the gap has closed offering a free trial. Texas counties in terms of oil in the top 200 Texas counties in of... Expect the value per acre ( PPA ) is a speculative play that has pretty. Have no business relationship with any company whose stock is mentioned in this article are incorrect day! Foot used on the Founders A25 # 1H short amount of time two-week trial to Distressed value.... ( PPA ) is a speculative play that has n't been proved out ( proved. Behind the Orogrande Basin Project operators with successful Delaware Basin horizontal experience to join in a. And high net worth individuals per share ) limited value to ensure the functionality! Production in December 2020 and historical production before that has been pretty minimal.. % net revenue interest in this region 10-Q ( Mark one ) x Quarterly report under Section or. The Founders A25 # 1H 53.91 million shares, its daily volume is relatively low at around.... Sales of the 2,000 pounds per foot used on the other two counties have a relatively simple equation Section! Completed the Cactus A35 # 1H 's 2019 10-K ) are worthless, and this will be revealed a.
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orogrande basin value per acre