Oil & Gas Firm Increases Stake in Orogrande Basin Project
Source: Streetwise Reports (8/4/18)
A ROTH Capital Partners report detailed the transaction.
Torchlight Drill Pad
In a July 27 research note, analyst John White with ROTH Capital Partners reported that on July 25 Torchlight Energy Resources Inc. (TRCH:NASDAQ) entered an agreement that will boost its interest in the Orogrande project to 72.5% from 67.75%.
The parties involved in the agreement were Torchlight and its wholly owned subsidiary Hudspeth Oil Corp., Founders Oil & Gas, and two companies solely owned by Torchlight’s chairman, Gregory McCabe—Wolfbone Investments and McCabe Petroleum.
Under the terms, Torchlight and Wolfbone will each pay $625,000, and for Torchlight and Wolfbone or McCabe Petroleum to each pay another $625,000 on July 20, 2019. In exchange, Founders Oil & Gas will sign over equally to Torchlight and Wolfbone all of its interest in the Orogrande project’s oil and gas leases.
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.
ROTH has a Buy rating and a $1.75 per share price target on Torchlight, whose share price is currently $1.17.
New Texas Oil Discovery Confirmed by This Small Texas Oil Stock
Source: Keith Kohl for Streetwise Reports (8/1/18)
Keith Kohl, managing editor of Energy & Capital, profiles a small firm that just made a large discovery in West Texas.
Torchlight’s Orogrande property
Texas is an undeniable powerhouse in oil production.
Last month, the Lone Star State’s daily output hit 4.3 million barrels per day.
Put it this way, if Texas was admitted to OPEC today, it would be the oil cartel’s second-largest producer. Only the Saudis would be able to extract crude at a faster pace.
And things are only looking better from here on out.
After all, Texas is home to two of the hottest oil-producing regions in the lower-48 states: the Eagle Ford and the Permian Basin.
According to the EIA’s latest Drilling Productivity Report, those two areas alone are expected to average about 4.7 million barrels per day in July, then jump another 100,000 barrels per day in August.
Personally, I tend to favor the smaller, independent drillers with a strong upside.
You’ll find some of the best drillers in the world in Texas. Diamondback Energy Inc. (FANG:NASDAQ), for example, has 207,000 net surface acres in the Permian Basin. The company is running up to twelve rigs in the play, and expects production to climb 40% this year.
Having one world class oil play should be enough to attract the attention of individual investors like us; having two major plays puts Texas oil drillers into an immensely favorable position.
But what if you had three?
More importantly, what if only one company had a drilling monopoly on this play?
New Oil Discovery Confirmed
Nestled away in the far western reaches in Texas, there’s a small Texas oil stock that is unraveling one of the hottest new tight oil plays in the United States.
Over the last year, Torchlight Energy Resources Inc. (TRCH:NASDAQ) has been quietly drilling into the massive Orogrande Basin, where it controls 133,000 net acres in Hudspeth County.
Look, we both know that the best time to position yourself in these up-and-coming oil plays is before everyone else learns about it.
And this is one of those plays!
We’re talking about a massive oil field with billions of barrels of crude up for grabs. Based on similar EURs in the Midland Basin, the potential EUR of Orogrande wells is estimated to be between 4 to 6 million barrels per section, with roughly 12–18 wells per section.
Trust me, it was only a matter of time before Torchlight’s drilling activities came under the spotlight.
The company’s first Orogrande well—the University Founders A25#1H was spud at the end of 2017, and completed about two months ago.
Last week, the company confirmed production in the Orogrande Basin. We learned that the University Founders well has officially started producing significant hydrocarbons.
///////////////////////////////////////////////////////////////////////////////// So that’s what they are calling the Hudspeth county extension of the Delaware Basin stacked shale play…the Orogrande Basin (orogrande…big gold). Founders Production Company bought Arabella some years ago and have a big horizontal well one section to the southeast of the section I am in and they have a 6 inch produced saltwater disposal line from their tank battery to the saltwater disposal well on my property.
They are working the Delaware basin in Hudspeth county back to the east to meet the development in
eastern Culberson county…proving the stacked shale play formations from Sierra Blanca to the Pecos River.
Land is still cheap in Hudspeth county…need I hint more??