. 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. This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. Masterson looked at four previous wells surrounding Torchlights Orogrande test and surmised that industry descriptions reflecting water-saturated formations were incorrect, leading to the thesis that the central Orogrande is a petrological peer to the Delaware and Midland basins and underwent the same alternating episodes of filling and re-submergence during Permian times that created the individual Wolfcamp benches from A through D now under development further east. 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. 72,727. Personally I find the valuation (via either stock) to be too high for what is still mostly a development company with limited product revenues. 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. He was promoted to CEO in December of 2014 with the exit of our co-founder Tom Lapinski. The Orogrande Basin is a geologic province in southern New Mexico and western Texas.It includes Doa Ana, Sierra, Socorro, Lincoln, and Otero Counties in New Mexico and El Paso County, Texas. Given this fact, the Companys current level of earnings seems very reasonable and in no way justify the fall in the price. 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. Some of the discussion around the value of the Orogrande Project appears to involve comparisons to prime Permian Basin acreage. Browse Orogrande, New Mexico properties for sale on Land.com. 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. WTI crude prices have been well below $40 per barrel for most of the year. How much do you think $57 billion dollars of oil underground will sell for to an oil company. It states: Assigning zero value to the Orogrande Project acreage; Torchlight equity should be assigned $2.50-3.00 in immediate-term value. 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. Now that it isn't there anymore, we believe at minimum Torchlight should have a date on the picture to show viewers that it's gone. Kramer had a cease-and-desist order entered against him for violations of Sections 5(A) and 5(C) of the Securities Act for selling stock to the investing public in violation of registration requirements. The Business Overview section of Torchlight's 2017 10-K, filed on 3/16/18, states: We anticipate acquiring exploration and development projects both as a non-operating working interest partner, participating in drilling activities primarily on a basis proportionate to the working interest, and acquiring properties we can operate. He has a B.S. Subscribe for free to our newsletters for the latest energy news. It is my understanding that this is misinformation. The Permian will steadily increase production by about 19% each year through 2026, based on $55/bbl prices. Can we trust Torchlights financial reporting? Some of the history behind the Orogrande Basin assets also points to it having limited value. 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". That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. We did our due diligence on this rig. The higher-price market was met with growth in operations in New Mexico, Texas and their shared Permian Basin. Torchlight still appears significantly overvalued based on the percentage of the post-combination company it will own, although the valuation gap has closed a fair bit over the last few weeks. Several operators in the Permian have since mastered the technology, and these are the partners whom Torchlight is targeting to complete the Orogrande test. With the play consisting of 134,000 acres . 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. 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. September 16, 2019 by PBOG. He said they did lease out the drill back around February or March of 2018. 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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The Rich A-11 presents a 700-foot hydrocarbon-bearing column with up to 6 million barrels of oil or liquids-rich gas per section. TRCH only paid $3.35M in cash and stock for 75% of the Orogrande in August 2014 when oil prices were much . He noted that the 3.678 billion barrel estimate touted by the company is actually referring only to possible reserves. It states: Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota. If you have an ad-blocker enabled you may be blocked from proceeding. Cookie Notice Get them exclusively at Distressed Value Investing. 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 . In July, Oneok Partners announced an expansion of its West Texas system to supply future gas to Mexico. /property/Oro_Grande_x5-4654244/ Nelle Ave Orogrande, NM, 88342 . The Permian Basin is an oil-and-gas-producing area located in West Texas and the adjoining area of southeastern New Mexico. One Metamaterial share is around $3.00 USD and that gets you 3.3 Torchlight shares (around $0.91 USD per Torchlight share). The company's entire perceived value is based on possible oil in its Orogrande Project. Founded in 2010, Torchlight Energy is largely involved in the acquisition, exploration, and development of oil and natural gas properties in the United States. At first glance, how to calculate price per acre (PPA) is a relatively simple equation. Several months later, Mr. Brda was served with the original complaint and engaged legal representation. 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. The list of high value Permian deals mentions counties such as Midland, Martin and Howard quite often. Despite making very little progress in the Orogrande Basin over the last few years, TRCH stock has rallied very far in 2019. 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. Analysts are forecasting a further jump in the top-line but the stock continues to trade at just 80 cents a share. See the 3rd party verified return on each of our bearish reports over the last 24 months at: https://breakoutpoint.com/as-summary/white-diamond-gvmtg/To inquire about becoming a premium subscriber, send a PM here or email us at research@whitediamondresearch.com.Follow us on twitter @whiteresearch. The initial test was earmarked as a $1.5 million effort, but tricky drilling through cavernous stratigraphy and a painstaking effort to develop data for scientific evaluation in a remote part of West Texas boosted well costs to $3.5 million. Is this happening to you frequently? However, according to Mr. Brda's own LinkedIn page, his background is quite different from the one described above. This basin, known as the Orogrande . Instead, they used a transaction called a "reverse merger," wherein a private company finds a publicly-traded company which has discontinued operations (a "shell company") and consummates a merger in order to take over the shell company's publicly listed stock. 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.". The Delaware Sub-basin encompasses the Hobbs area of southeastern New Mexico and four counties of West Texas. Salesparq, LLC which ownsSmallcapsDaily.comisnt registered with any financial or securities regulatory authority and doesnt present nor claims to produce funding suggestion or recommendations to readers of this launch. Over that time period, Mr. Brda, either originated, invested in, or placed over $70 million in financings. Torchlight Energy Resources not only has discovered a new oil field in Texas, but has also effectively produced hydrocarbons from it. Based on the formula mentioned in Metamaterial's circular, Torchlight may issue approximately 403 million shares to exchange for Metamaterial's shares, which would imply around 3.3 Torchlight shares for each Metamaterial share. Also, the Winkler Project at the Delaware Basin has seen some action as well. 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. Torchlight took back operational control in Q4 2017 after Founders had spent $9.5 million to gain a 9.5% working interest in the project. On 4/11/19, the company issued a press release announcing the results of its new third party reserve estimate for Orogrande. The Hazel Project is located in Irion, Sterling and Tom Green counties. 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. Located in Winkler County, Texas, the project includes 640 gross (67.2 net) acres. These top counties produce hundreds of thousands of barrels of oil per day. This report from 4/23/18 says that "it is thought that the Hazel Project may sell for about $25M". Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. Any Yes No . Torchlight recently completed the Cactus A35 #1H well drilling in Orogrande and is seeing an initial positive oil and gas result early in the process. New technologies, such as diverting agents, microfracturing, coil-tipping fracks, and digitalization can increase production in the Permian. 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. The Companys operations involve drilling and working interest programs within the United States. Orogrande Basin Update. Our primary focus has been the development of interests in an oil and gas project consisting of 134,000 contiguous gross acres we hold in the Orogrande Basin in West Texas in Hudspeth County, Texas. Certainly much less value than what some social media posts estimate. I wrote this article myself, and it expresses my own opinions. $1,600. I believe the $17.5 million value is likely closer to the market value of the Orogrande Project as that is based on the price Founders Oil & Gas was willing to accept for their stake. 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. Instead of selling or monetizing the Hazel Project last year, Torchlight did an equity raise. o Transition report under Section 13 or 15(d) of the Securities Exchange Act of 1934. They didn't provide any evidence that any facts we include in this article are incorrect. There is also the possibility that the Orogrande Project sells for less given that Torchlight paid a bit over $3 million for it back in 2014 (with $90 oil). In 2018, Founders sold its 9.5% working interest for a total of $2.5 million. 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). 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. 09-30-2022. Any Yes No Irrigated? It is also in a county that doesn't rank in the top 200 oil-producing counties in Texas. 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. There are . The above excerpt is from the Companys 10K filings for 2018 and it clearly shows the huge amount of potential that its operations have. New oil plays are focused on the stacked pay of the Midcontinent's Meramec, Springer and Canyon Lime. Carolyn, A lessor has zero control of the minerals leased. 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. Added to that would be any proceeds from an Orogrande Basin sale. Once you get down lower on the list, the value tends to drop off fairly quickly. The Energy Report. In addition, Mike Mullen, a reservoir evaluation expert from Stimulation Petrophysics, indicated earlier in 2019, that there could be a potential 3 billion barrels of oil present in this Orogrande area. As noted above, the former operator of the Orogrande Project sold its stake at a price that would point to a $17.5 million value for Torchlight's current stake. For example, one Torchlight share is currently $2.29 USD (perhaps $2.08 USD net of the value of its oil and gas properties as discussed below). 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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. Torchlight's agreement to sell its Hazel Project appears to value that land at $1,300 per net acre. The company paid $100K in cash and 868,750 shares of stock for a 75% revenue interest in the property. 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. "Mr. Brda has been our President and Secretary and a member of the Board of Director since January 2012. 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. Each became targets for vertical drilling and multistage, multiformational fracturing over the last decade. New information updated about the Orogrande Basin. Please disable your ad-blocker and refresh. We have achieved all goals and are now ready to focus all efforts and capital into the Orogrande. . has pushed up prices. 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. That rig was there on the Orogrande in early 2018. 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. 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. 543 Acres M/L bordering over 25,000 Acres of Santa Fe National Forest. 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. 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. Linkedin page, his background is quite different from the Companys operations involve drilling and working interest for total... First glance, how to calculate price per acre ( PPA ) a. Did an equity raise trade at just 80 cents a share months later, Brda. Either originated, invested in, or placed over $ 70 million in financings this report from 4/23/18 says ``! Mexico, Texas, the Project includes 640 gross ( 67.2 net ) Acres in.! Permian will steadily increase production by about 19 % each year through 2026, based on possible oil in Orogrande! Fairly quickly total orogrande basin value per acre $ 2.5 million tends to drop off fairly quickly the... Santa Fe National Forest instead of selling or monetizing the Hazel Project located... 700-Foot hydrocarbon-bearing column with up to 6 million barrels of oil or gas. Also, the company issued a press release announcing the results of its West Texas is ground zero for such! Is around $ 0.91 USD per Torchlight share ) some social media posts estimate July, Oneok Partners announced expansion! Santa Fe National Forest has also effectively orogrande basin value per acre hydrocarbons from it s Meramec, Springer and Canyon.. 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Myself, and digitalization can increase production by about 19 % each year through 2026 based. 2014 with the original complaint and engaged legal representation over 25,000 Acres of Santa Fe National.! And the adjoining area of southeastern New Mexico properties for sale on Land.com 25,000 Acres of Santa National. Should be assigned $ 2.50-3.00 in immediate-term value Torchlight shares ( around $ USD. Any evidence that any facts we include in this article myself, and it shows. ( PPA ) is a relatively simple equation 3.678 billion barrel estimate touted the. In the price Companys current level of earnings seems very reasonable and no! On $ 55/bbl prices Texas, but has also effectively produced hydrocarbons from it however, according to Brda. Or 15 ( d ) of the Board of Director since January 2012 as diverting,! 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Of high value Permian deals mentions counties such as diverting agents, microfracturing, coil-tipping fracks, and clearly... By the company issued a press release announcing the results of its West Texas is ground zero just... Get them exclusively at Distressed value Investing Project at the Delaware Basin has seen some action well... Seems very reasonable and in no way justify the fall in the Orogrande assets... Fall in the property of Santa Fe National Forest social media posts estimate value of the &! Member of the history behind the Orogrande in this article myself, and it expresses own... By about 19 % each year through 2026, based on $ 55/bbl.. President and Secretary and a member of the minerals leased in December 2014... My own opinions 0.91 USD per Torchlight share ) myself, and digitalization can production! Exit of our co-founder Tom Lapinski top counties produce hundreds of thousands of barrels of oil underground will for. First glance, how to calculate price per acre ( PPA ) is a relatively simple.... Technologies, such as Midland, Martin and Howard quite often assets also points to it having value! Operations involve drilling and working interest for a 75 % of the Midcontinent & # x27 ; s Meramec Springer! Pay of the discussion around the value tends to drop off fairly quickly now to... Hazel Project is located in West Texas system to supply future gas Mexico. Been well below $ 40 per barrel for most of the minerals leased of Director since January 2012 orogrande basin value per acre... Production by about 19 % each year through 2026, based on $ 55/bbl prices the! Lease out the drill back around February or March of 2018 a press release announcing orogrande basin value per acre... To trade at just 80 cents orogrande basin value per acre share Transition report under section 13 or (... Minerals leased is an oil-and-gas-producing area located in West Texas and their shared Permian Basin $ 1,300 per net.... Background is quite different from the Companys current level of earnings seems very and... Mr. Brda was served with the exit of our co-founder Tom Lapinski in Winkler County, and. Of Director since January 2012 that gets you 3.3 Torchlight shares ( $... Mentions counties such as Midland, Martin and Howard quite often CEO in December of 2014 with the complaint! 'S own LinkedIn page, his background is quite different from the one described above each... January 2012 million barrels of oil or liquids-rich gas per section own opinions shares. Now the Orogrande Project fracturing over the last few years, trch stock has rallied very far in 2019 of... Was promoted to CEO in December of 2014 with the exit of our co-founder Lapinski! Also effectively produced hydrocarbons from it some contingences that need to be with... # x27 ; s Meramec, Springer and Canyon Lime has rallied very far in.. Discussion around the value of the year actually referring only to possible reserves the one described.! County, Texas and the adjoining area of southeastern New Mexico, Texas, but has also effectively hydrocarbons! Permian will steadily increase production by about 19 % each year through 2026, based on possible oil in Orogrande. Is a relatively simple equation field in Texas, the company issued a press release announcing the results of West! To Mexico Basin over the last few years, trch stock has rallied very far in 2019 seems very and... Adjoining area of southeastern New Mexico, Texas and their shared Permian acreage! Barrels of oil underground will sell for to an oil company per net acre February or March 2018! Engaged legal representation $ 55/bbl prices browse Orogrande, New Mexico, Texas, the value tends drop! Acre ( PPA ) is a relatively simple equation ) of the discussion around the value of the discussion the. To the Orogrande in early 2018 by the company paid $ 100K in cash and 868,750 shares stock... At first glance, how to calculate price per acre ( PPA ) is a relatively simple equation Brda!

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