orogrande basin value per acre

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. Find out more about how we use your information in our privacy policy and cookie policy. Gary_L_Hutchinson April 5, 2017, 9:22pm #5. They have each had additional punishments from the SEC in the years since. The Upper Pennsylvanian Silt (WolfPenn), a new field discovery made by Torchlight in its Orogrande Basin Project, is a hydrocarbon rich formation with over 600 feet of thickness. SAN FRANCISCO, CA-- (Marketwired . We specialize in the technology and healthcare sectors. Lucid Energy provided in the sale more than 600,000 acres in the region which spans from New Mexico into West Texas, with rig activity supporting 20 years of drilling, per the announcement. Prices for top E&P stocks and commodities. Torchlight was aware of the presence of a petroleum system when it drilled a test well in 2019. It's all about the price per acre, not by the amount of oil in the land. 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. 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. 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. Washington, D.C. 20549 . This valuation would make Torchlight's 66.5% working interest (reduced from 72.5% due to the note conversion) worth approximately $81.3 million instead. Is this happening to you frequently? Complete this form to receive a Free copy of our Research on . More:$1.9 billion oil and gas merger targets Permian Basin amid growing energy prices . 21.3 Acres W/ Mineral Rights! 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. 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. This gives a total value of $30.35 million (or approximately $0.20 per share) for the special dividend. Is this someone you would want to invest your capital with? is in the process of . Compare properties, browse amenities and find your ideal property in Orogrande, New Mexico . Generally, these estimates are made using a variety of techniques - the use of petrophysical analysis alone leaves much open to interpretation. It is my understanding that this is misinformation. Reddit and its partners use cookies and similar technologies to provide you with a better experience. Please disable your ad-blocker and refresh. You can change your choices at any time by visiting your privacy controls. It shows a video of an aerial view of the rig: And here is a picture of a side view of the rig with the name and number of it: These are nice pictures, but we believe they give the impression to shareholders that there is activity going on right now on the Orogrande. We believe that in the wake of its recent success, Torchlight is ripe for investment today as its project sales havent commenced as yet and the Company could generate multi-bagger returns in the medium-to-long-term horizon. It states: Assigning zero value to the Orogrande Project acreage; Torchlight equity should be assigned $2.50-3.00 in immediate-term value. 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. In the case of Torchlight, despite having a float of 53.91 million shares, its daily volume is relatively low at around 170,000. Torchlight currently controls approximately 97,500 surface net acres, out of 134,000-acre continuous block, all of which are under University Lands. The other two counties have a relatively modest amount of production (around 2,000 barrels of oil per day combined). 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. Indeed, this property is a gem! Likewise, the Marcellus Shale lease can generate as much as $4,800 per net acre. Thankfully, the bulls took control of TRCH stock and ran it up in January. Torchlight has done a bit of exploratory work on the asset since then, but at last report there are still no proved reserves associated with it. In April 2019, TRCH said it will sell its Orogrande Project, but we dont believe that will ever happen. This is not an asset that buyers would pay billions or even hundreds of millions for. I have no business relationship with any company whose stock is mentioned in this article. Northern Oil and Gas, Inc. Alpha Energy Partners. with many not being able to survive the fallout. Browse Orogrande, New Mexico properties for sale on Land.com. The answer is that Torchlight did not make its way onto the public markets through a conventional IPO. Torchlight overcame both technical and financial challenges and subsequently closed on an additional $9.8 million in funding once technical information on the well was compiled. We spoke to a representative of Sendero Drilling. This is under the "Current Projects" tab. Torchlight's oil and gas properties (and thus its special dividend) appear to have fairly limited value though. Right now the Orogrande Basin of West Texas is ground zero for just such a key discovery. If one wants to be very bullish on the asset, the $81.3 million value (from the notes payable conversion) can be used instead. 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. 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. Torchlight's current auditor, Briggs & Veselka Co., was also sued by the same company. APN #s 118-03-22909, unit 1, block 111, lot 11 Annual taxes $32.91 Recreational Vehicles (RVs) are allowed as follows: A. Torchlight's stock closed at $0.80 on November 7, 2018, and reached its low of $0.53 on December 31, 2018. 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. This report from 4/23/18 says that "it is thought that the Hazel Project may sell for about $25M". In March 2020, holders of notes payable by Torchlight converted $7.331 million in note principal and accrued interest into a 6% working interest in the Orogrande Project. The price per acre for the Midland Basin was about $17K. At first glance, how to calculate price per acre (PPA) is a relatively simple equation. To ensure this doesnt happen in the future, please enable Javascript and cookies in your browser. Torchlight's Winkler Project sale involves a price of approximately $3,333 per net acre. Several months later, Mr. Brda was served with the original complaint and engaged legal representation. He noted that the 3.678 billion barrel estimate touted by the company is actually referring only to possible reserves. 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. 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. Core samples, logs and oil and gas shows while drilling demonstrate the presence of hydrocarbons and are now itemized in a 22-item checklist in the companys July 2015 investor presentation. Some companies are off track by more than 50% in certain regions. 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. Click Manage settings for more information and to manage your choices. These top counties produce hundreds of thousands of barrels of oil per day. The sale could be for part or all of Shell's about 260,000 acres in the Permian Basin, located mostly in Texas. The funds were used for the expansive drilling at Orogrande Basin. 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 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. There may be additional engagements outside of primary listed on LinkedIn and the list may be incomplete. Texas had 242 rigs, Baker Hughes reported, adding three in the last week. 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. The EIA does not include Hudspeth County (circled below) in its definition of the Permian Basin. We had an independent petroleum engineer review Torchlight's reserve estimate report. That rig was there on the Orogrande in early 2018. 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. 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. The company's entire perceived value is based on possible oil in its Orogrande Project. (10.72% of the property will not be operated on.) 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. 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. Orogrande Basin Lease was bought in 2014 for 850k shares at 3.5 dollars, with 100k in cash with 75% interest! 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