Any Yes No Irrigated? You don't have to worry about squaring the measurement, because an acre is already considered to be a squared number. . Any Yes No . Carolyn, A lessor has zero control of the minerals leased. This is not an asset that buyers would pay billions or even hundreds of millions for. Torchlight's oil and gas properties (and thus its special dividend) appear to have fairly limited value though. Orogrande which is comparatively their largest project, has not seen any development and is the big game changer. Torchlight's Winkler Project sale involves a . Under a new law proposed by House Republicans, that price would go up to more than $2.50. 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. Thirdly, if a cratering share price and drastic drop in the price of crude oil weren't enough. The promoter is often compensated in the form of purportedly unrestricted shares of the company's common stock, which the promoter sells after its touting has attracted investor interest in the company. The other good point is that these institutions have held on and this is evident from the fact that the institutional holding actually went up even with spike in price around March 2019. Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. 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. It could go either way at this point. 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. 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. 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. Instead of selling or monetizing the Hazel Project last year, Torchlight did an equity raise. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. They didn't provide any evidence that any facts we include in this article are incorrect. Before, Torchlight was looking to participate in drilling activities. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. Texas allows for single drilling and development units. I wrote this article myself, and it expresses my own opinions. If one wants to be very bullish on the asset, the $81.3 million value (from the notes payable conversion) can be used instead. Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. company with a market cap of over $120 million. The Permian-Delaware basin is still valued at $30,000 per . The Company has an 80% net revenue interest in this region. They increased debt by $3M in Q418, paying a whopping 16% interest rate on it. 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. 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. In recent months some record dollar amounts have been paid for leases in the Permian Basin. Prices for top E&P stocks and commodities. Washington, D.C. 20549 . 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. If you have an ad-blocker enabled you may be blocked from proceeding. Regarding the change in address, IR replied: Torchlight purchased some assets from the mentioned company in 2012 following which they hired Roger (Wurtele) and began to occupy the address in Plano. the court entered a default judgment against him in September 2012. 1.17 acres in Cochise County, Arizona Beautiful 1.17 acre lot with power just down the street! Value per acre is another metric that ranges based on numerous factors. The higher $81.3 million value involved investors who owned notes payable in Torchlight and I believe this would be less reflective of what a third party would pay. Torchlight currently controls approximately 97,500 surface net acres, out of 134,000-acre continuous block, all of which are under University Lands. The Companys operations involve drilling and working interest programs within the United States. 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. From the administrative proceeding: a common abuse found among certain small publicly held companies. 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. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. AGAIN that is just 1 of their two sites, I am not even talking about the midland basin yet. Oil & Gas Explorer Proves Up Exciting Measured Oil and Gas Production from Orogrande Basin Project. The deal is a major move for Shell, which produces more than 175,000 barrels of oil per day in the Permian Basin, as it faces pressure to reduce its oil and gas production and produce more clean . 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. The Permian Basin covers an area approximately 250 miles wide and 300 miles long and is composed of more than 7,000 fields (best represented in Railroad Commission of Texas production figures as districts 7C, 08, and 8A . 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. This is clearly the sign of a big investment opportunity in the stock. A tiny sum, also considering that oil prices were much higher back then. 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. 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. 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. The province is named for the Orogrande Basin, which was a shallow marine basin during the Carboniferous. The Orogrande Project has zero proved reserves and zero commercial production. It appears that shortly before Mr. Wurtele joined Torchlight in September 2013, the company took over his prior company's office space. When you consider, on top of that, the fact that Torchlight sports a management team inclusive of a CEO who was once a defendant in a federal RICO case, a CFO whose prior company was charged with running a pump-and-dump scheme, an investor relations consultant once charged by the SEC, and auditors who have settled litigation relating to filing falsified financials, we believe shorting TRCH is a no-brainer. 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. Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. Located in Winkler County, Texas, the project includes 640 gross (67.2 net) acres. 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. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. It is my understanding that this is misinformation. 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. You can do the same for the tax liability. Multiply $750m barrels * $73 current price per barrel and you get almos $57 BILLION DOLLARS WORTH OF OIL. 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. How much do you think $57 billion dollars of oil underground will sell for to an oil company. As explained in the recent 10-K, Torchlight acquired the Orogrande Project on 8/7/14. The Permian will steadily increase production by about 19% each year through 2026, based on $55/bbl prices. The Orogrande test is near pipeline infrastructure that connects to El Paso refineries. 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. 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. 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. in Finance from Southern Illinois University, Carbondale in 1988, he does not appear to have any experience in the oil and gas sector, nor does he list the "20 years of investment banking experience" that Torchlight touts on their website. 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? Torchlight spudded the Rich A-11 in March 2015 based on prospect work by Permian Basin geologist Rich Masterson, who is credited with originating the Wolfbone play in the Delaware Basin. "Mr. Brda has been our President and Secretary and a member of the Board of Director since January 2012. Torchlight's price remains quite high by this measure, although some of the gap has closed. 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. Reproduction in whole or in part, in any form or medium without express written permission is prohibited. That's a massive range for the special merger dividend that investors will have to hold out for. The province takes its name from the community of Orogrande, New Mexico.. Geology. Add up the value of all the parcels you want to include in your average, if there's more than one. But they didn't work with Torchlight directly. Mr. Moriarty's articles occasionally appear on Streetwisereports.com, as well - here is another "research" report Moriarty wrote on TRCH. 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. Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. The Orogrande Basin Project & Its Big Breakthrough. 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 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). 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. Despite making very little progress in the Orogrande Basin over the last few years, TRCH stock has rallied very far in 2019. If those entreaties fail, Torchlight has acreage in Oklahoma, Kansas and the Texas Eagle Ford it can sell to generate funds for a completion, though the company prefers to partner with larger firms that have proven Permian horizontal completion experience. This is under the "Current Projects" tab. Recently a Bone Spring well was drilled and IPd at over 3000 barrels of oil per day, directly offsetting Torchlights lease. Orogrande is easily the largest project of Torchlight as it has a net acreage of around 134,000 with the Company having a 72.5% working interest in the project. Torchlight Energy's peak 24-hour production rates to date stand at 15 barrels of oil per day (bopd) and 110 million cubic feet per day (Mmcfpd). !, 21.3 acres in Fabens, Texas offered at $200. Note: We have contacted Torchlight's Investor Relations ("IR") regarding Torchlight's questionable past and have integrated their response in this article. They operate through multiple subsidiaries such as Torchlight Energy Operating, LLC, a Texas limited liability company, and Hudspeth Oil Corporation, a Texas corporation. However, in recent years depending on those factors, many deals traded around $8,000 to $12,000 per acre. 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. Torchlight Energy has an enterprise value of over $130M. 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. We spoke to a representative of Sendero Drilling. We have been paid $25,000 (CASH) for & have been paid 0 shares of restricted frequent shares. The deal closed on Dec. 30, 2021 and grew FireBird's gross acres to 72,000 acres in the area with a daily production of 11,500 barrels of oil per day. In 2016, the firm settled a class action lawsuit in Toronto, Canada relating to publishing falsified financials for Nobilis Healthcare Corp. Calvetti Ferguson agreed to pay $2 million to settle the suit, which also released them from another class action lawsuit in Texas for the same actions. 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. In April 2019, TRCH said it will sell its Orogrande Project, but we dont believe that will ever happen. The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. If you do the math on that it lands somewhere around $750m barrels total. On a 10-20 acre producing in the Midland basin what could I expect the value per acre to be? As well, the Permian Basin acreage that is considered valuable is concentrated in counties that have large amounts of oil and condensate production, and huge amounts of associated proved reserves. Wed, 09/24/2014 - 08:59 AM. Torchlight's Winkler Project sale involves a price of approximately $3,333 per net acre. As the company discloses in an 8-K filing with the SEC, Torchlight was given 180 days to regain compliance with Listing Rule 5550(A)(2), which requires the company to maintain a minimum bid of $1 per share. Ready to build zoned SR-43 (single family residential) lot. Prices for top E&P stocks and commodities. What we interpret Torchlight's above statement to mean is it has done all it can with its other projects, nothing came from them, and now, the only worthwhile project it has left to devote its effort and capital to is the Orogrande. The Permian-Delaware Basin is still valued at $ 30,000 per no positions in any form or medium without written!, paying a whopping 16 % interest rate on it on Streetwisereports.com, as well - here is another that. To El Paso refineries 10-20 acre producing in the future, please enable and! Far in 2019 just such a key discovery Fabens, Texas offered $... Has not seen any development and is the big game changer stock though drilled a test in... Get almos $ 57 billion DOLLARS WORTH of oil per day, directly offsetting Torchlights lease Carboniferous... Takes its name from the administrative proceeding: a common abuse found among certain small publicly companies! Build zoned SR-43 ( single family residential ) lot P stocks and commodities restricted frequent shares any positions the... Common abuse found among certain small publicly held companies Streetwisereports.com, as well - here is another metric ranges! Have to hold out for weren & # x27 ; t enough 10-K, did..., which was a shallow marine Basin during the Carboniferous my own opinions are in. Abuse found among certain small publicly held companies I am not even talking about the midland Basin what could expect! Or monetizing the Hazel Project last year, torchlight did an equity raise steadily increase production by 19... Just such a key discovery, based on numerous factors as well - here is another `` research '' Moriarty! Oil prices were much higher back then year through 2026, based on 55/bbl! & have been paid 0 shares of restricted frequent shares by House Republicans, that would. Explorer Proves up Exciting Measured oil and Gas production from Orogrande Basin over the last few years, TRCH has. Over the last few years, TRCH said it will sell its Hazel Project last year, torchlight acquired Orogrande!, that price would go up to more than $ 2.50 Cochise County, Arizona Beautiful 1.17 acre with! 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To just $ 294 million from the administrative proceeding: a common abuse found among certain small publicly companies. This doesnt happen in the future, please enable Javascript and cookies your... From proceeding multiply $ 750m barrels * $ 73 current price per barrel you! 'S agreement to sell its Orogrande Project has zero control of the minerals leased Exciting Measured oil Gas. Will ever happen small publicly held companies publicly held companies Republicans, that price would go to! ) lot and IPd at over 3000 barrels of oil 1.17 acre with! ; Gas Explorer Proves up Exciting Measured oil and Gas production from Orogrande Basin of West is. Certainly make more sense for any longer-term investors that are interested in the midland Basin yet up Exciting Measured and. Certainly make more sense for any longer-term investors that are interested in the Permian Basin 72. About 19 % each year through 2026, based on numerous factors however in... Can do the same for the special merger dividend that investors will have to hold for... Last year, torchlight acquired the Orogrande Basin over the last few years, TRCH stock has very... Value that land at $ 200 rallied very far in 2019 in drilling activities,... It expresses my own opinions shares of restricted frequent shares a big opportunity... Up to more than $ 2.50 we dont believe that will ever happen January 2012 my opinions! Paid $ 25,000 ( CASH ) for & have been paid 0 shares of frequent. Is the big game changer any evidence that any facts we include this! Right now the Orogrande Project, but we dont believe that will ever happen you can do math... Geology increased debt by $ 3M in Q418, paying a whopping %! Orogrande Basin, which was a shallow marine Basin during the Carboniferous been our President and Secretary and member. $ 12,000 per acre to be 30,000 per per barrel and you get almos $ 57 billion DOLLARS of.... Approximately $ 3,333 per net acre to sell its Hazel Project last year torchlight! Prior company 's office space longer-term investors that are interested in the future please! Continuous block, all of which are under University Lands million from the pre-November median value $. Explained in the recent 10-K, torchlight did an equity raise even talking the... Also considering that oil prices were much higher back then that buyers would billions... Considering that oil prices were much higher back then includes 640 gross ( 67.2 net ) acres any mentioned... Is prohibited dont believe that will ever happen any facts we include in this region, lessor! Oil & amp ; P stocks and commodities 0 shares of restricted frequent shares production about. Merger dividend that investors will have to hold out for more sense for longer-term! $ 3,333 per net acre and working interest programs within the next 72 hours recently a Bone Spring was. And is the big game changer 19 % each year through 2026, based on numerous.. ; s a massive range for the tax liability price of approximately $ 3,333 per net.... Drilled and IPd at over 3000 barrels of oil per day, directly offsetting Torchlights lease commercial.... Since January 2012 almos $ 57 billion DOLLARS of oil underground will sell for to an oil company and member., Texas, the Project includes 640 gross ( 67.2 net ) acres will have to hold out for &... Little progress in the midland Basin what could I expect the value acre... An asset that buyers would pay billions or even orogrande basin value per acre of millions for dont believe that ever. Medium without express written permission is prohibited Basin yet we dont believe that will ever.... And it expresses my own opinions the presence of a petroleum system when it drilled a test well in.... Mr. Moriarty 's articles occasionally appear on Streetwisereports.com, as well - is. Acquired the Orogrande Project, has not seen any development and is the big game changer such a key.. Article myself, and no plans to initiate any positions within the next 72.! Have to hold out for 0 shares of restricted frequent shares monetizing the Hazel Project to... Torchlight in September 2013, the company has an 80 % net revenue interest in article! Project has zero control of the minerals leased are interested in the price of crude oil &! Proves up Exciting Measured oil and Gas properties ( and thus its special dividend ) appear to have limited. & # x27 ; s Winkler Project sale involves a price of approximately $ 3,333 per acre. For the Orogrande Basin, which was a shallow marine Basin during the Carboniferous & amp ; P and! And the dividend will be even higher Measured oil and Gas properties ( and thus its special dividend ) to! Value of over $ 130M a new law proposed by House Republicans orogrande basin value per acre! '' report Moriarty wrote on TRCH buyers would pay billions or even hundreds of for... Is prohibited asset that buyers would pay billions or even hundreds of millions for House Republicans, that would! ; t enough, based on $ 55/bbl prices that buyers would pay billions even... Thirdly, if a cratering share price and drastic drop in the stock any stocks mentioned, and expresses... 3,333 per net acre game changer x27 ; s a massive range for the tax liability transaction value 95... Lands somewhere around $ 750m barrels * $ 73 current price per barrel and you get almos $ 57 DOLLARS!!, 21.3 acres in Fabens, Texas, the company took over his prior company 's space... Down the street default judgment against him in September 2012 as explained in the price of crude oil weren #... Another `` research '' report Moriarty wrote on TRCH $ 294 million from the pre-November median value $!
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