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 . 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. Several months later, Mr. Brda was served with the original complaint and engaged legal representation. We did our due diligence on this rig. That rig was there on the Orogrande in early 2018. Torchlight Energy Resources Inc said on Tuesday it struck oil and gas at one of its development wells in the Orogrande basin in West Texas. Within Radius. ROTH has a Buy rating and a $1.75 per share price target on Torchlight, whose share price is currently $1.17. It is my understanding that this is misinformation. 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. Browse LandWatch's Texas land for sale page to find more rural . That's about 300 miles away from the Orogrande Project, which is just east of El Paso, TX. Mr. Wurtele has been Torchlight's CFO since September 2013. Also, the Winkler Project at the Delaware Basin has seen some action as well. 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. I wrote this article myself, and it expresses my own opinions. 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. 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. Add up the value of all the parcels you want to include in your average, if there's more than one. has pushed up prices. Information on assets, buyers and sellers, deal values, and more. The Energy Report Examines Torchlight Energy's Drilling and Development Agreement with University Lands. 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. 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 was also responsible for the origination of the Winkler County project which is relatively smaller in size (around 1100 gross acres). The company paid $100K in cash and 868,750 shares of stock for a 75% revenue interest in the property. He graduated college in 1988 with a B.S. The well appears to be an analog to the Central Midland Basin Platform, although the Orogrande test is shallower and normally pressured. 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. 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. Now, it appears that investors believe that the Hazel Project might be worthless, but the Orogrande Project has value. In 2018 a Santa Fe firm that places bids for anonymous investors bid more than $95,000 per acre for a tract of U.S. government land on the New Mexico side of the Basin. 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. In other words, there will soon be a number of disappointed investors and the ability to raise capital for projects in this geographic location may dwindle. Gary_L_Hutchinson April 5, 2017, 9:22pm #5. Mr. Moriarty's articles occasionally appear on Streetwisereports.com, as well - here is another "research" report Moriarty wrote on TRCH. Diamondback to Acquire Permian E&P Firebird for $1.6B in Cash/Stock. Northern Oil and Gas, Inc. Alpha Energy Partners. The Delaware Sub-basin encompasses the Hobbs area of southeastern New Mexico and four counties of West Texas. Wed, 09/24/2014 - 08:59 AM. 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 other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). As shown, #11 is nearby Midland and Odessa, TX. The shales, frequently gypsiferous . On the other hand, Hudspeth County doesn't even rank in the top 200 Texas counties in terms of oil or condensate production. SECURITIES AND EXCHANGE COMMISSION. 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. 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. Source: Peter Krauth for Streetwise Reports 02/25/2020. What is the point of paying auditors who have a concerning history? Based on this opinion, as well as the overall shift in investor sentiment in the Permian Basin, we do not believe Torchlight will be able to successfully complete the sale of the company or its asset(s). They didn't provide any evidence that any facts we include in this article are incorrect. I wrote this article myself, and it expresses my own opinions. 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 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. Today, over one year later, Torchlight has not been successful in selling the Hazel Project. Disclosure: I am/we are short TRCH. Today, almost five years later, Torchlight hasn't proved any resources on the Orogrande. Orogrande Basin Lease was bought in 2014 for 850k shares at 3.5 dollars, with 100k in cash with 75% interest! 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. (10.72% of the property will not be operated on.) discussed below). Torchlight essentially operates through a unique hybrid of a private equity model, overlaid with a publicly traded company. This report from 4/23/18 says that "it is thought that the Hazel Project may sell for about $25M". Analysts are forecasting a further jump in the top-line but the stock continues to trade at just 80 cents a share. . Can we trust Torchlights financial reporting? Please. These land listings comprise a combined 21,863 acres of land and other rural acreage for sale in the region. I have no business relationship with any company whose stock is mentioned in this article. They believe it will yield 156 sections with the potential of 4-6 million barrels per section. This is clearly the sign of a big investment opportunity in the stock. The company said that it can extrapolate the Cactus well to make 1,500bopd and 11Mmcfpd potentially, or combined 3,300 barrels of oil equivalent per day (boepd), when equated to a 10,000ft lateral. You don't have to worry about squaring the measurement, because an acre is already considered to be a squared number. . The Permian-Delaware basin is still valued at $30,000 per . The post-October median transaction value declined 95% to just $294 million from the pre-November median value of $5.6 billion. 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. Torchlight's Winkler Project sale involves a . The selection we want to highlight today is an oil and natural gas company that has some really exciting, ongoing projects but is trading at a ridiculously low price Torchlight Energy Resources, Inc. (NASDAQ:TRCH). It could go either way at this point. Shale development is just beginning in the Delaware. in Finance from Southern Illinois University, Carbondale, IL.". These calculations tend to mention the value of prime Permian Basin acreage when discussing Torchlight's Orogrande Basin acreage. 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. The Orogrande Project is a speculative play that hasn't been proved out (zero proved reserves as of Torchlight's 2019 10-K). This means that if there is no oil 90% of the time, then he could still be right in his "possible" designation. If you have an ad-blocker enabled you may be blocked from proceeding. 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. Torchlight's special dividend is likely to have limited value though. Mr. Brda, who also co- founded the Company, has been the Managing Member of Brda & Company, LLC since 2002, which provides consulting services to public companies - with a focus in the oil and gas sector. 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? Those horizontal efforts have grown to encompass the Bone Spring in the Delaware Basin and the Spraberry in the Midland Basin. The company paid a total consideration of 865,000 shares of Torchlight common stock and $100,000 in cash to the seller. SAN FRANCISCO, CA-- (Marketwired . Institutions have quietly accumulated the stock and it is a matter of time before the Company delivers a solid result making the stock price go through the roof. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. 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