Major oil should be interested in Torchlight Energy Resources, says Roth Capital. Roth Capital analyst John White notes that during its recent conference call update, Torchlight Energy Resources announced it is seeking a transaction involving a joint development venture, a sale of the company or a sale of all or substantially all of its Orogrande Basin assets. The company believes its positive drilling and testing results to date warrant this move and the analyst concurs with this timing. White believes numerous major oil companies and large capitalization exploration and production companies will express interest. The analyst reiterates a Buy rating on the shares, while raising his price target on the stock to $2.70 from $1.75.
Torchlight Energy Resources announced that the company and its operating partner Maverick Operating have completed the drilling phase of all three wells in the drilling plans set out in Q4. The company was able to confirm several new potential Wolfcamp pay zones, in addition to the existing Penn Silt formation. Most importantly, the company has confirmed a deep structure in the Atoka formation on the Maverick A24 #1 well. A voluminous amount of scientific data has been gathered, including 11 different types of logs and over 100 sidewall cores from the three wells drilled. The scientific information is being analyzed and, when done, will help determine the best methods for completion. Petrophysical information gathered will measure the potential Oil In Place, or OIP, and recoverable reserves for the Penn Silt pay zone and other conventional pay zones. Through the assistance of a newly hired industry professional, the company has uncovered newly processed 2D seismic, gravity information and magnetics. This data will assist in establishing the extent of the structure identified in the Maverick A24 #1 well and additional conventional structures on the acreage.
Torchlight Energy Resources announced the addition of an independent member to its board, Robert Cook. Additionally, David Newton will be stepping down from his position on Torchlight's board for personal reasons. With this change Torchlight will have five directors including three independent members. Robert Cook has more than 40 years of experience in the oil and gas industry where he held senior positions with Shell Oil as a Wells Engineer.
Torchlight Energy Resources announced that the company has completed the drilling phase of the A39 #1 well in its Orogrande Basin drilling program with operator Maverick Operating and drilling partner Wolfbone Properties. The A39 #1 was drilled to a vertical depth of 4,035 feet and casing was set. Well logs and core samples were taken prior to casing the well and are currently being analyzed. Electric logs show hydrocarbon potential in multiple intervals which is representative of economical conventional and unconventional productive formations. The company's primary target is a Wolfcamp conventional dolomite pay-zone that appears to have net thickness of 75 feet at approximately 3,800 feet. This zone correlates to similar zones appearing in the A25 #1 well and the offset Cactus well which the company believes demonstrates a greater arial extent of the target. To confirm the viability of movable hydrocarbons, Torchlight will complete the well in this 75-foot Wolfcamp interval employing conventional methodology. Upon successful completion the company will have confirmed vertical development potential aggregating the prior successful unconventional completion. Both the A39 #1 and the previously drilled A11 #2 well will be perforated and stimulated to commence testing of each well. Fracture stimulation will be employed at a later time as needed after results are measured. The drilling rig will now move to the company's next well location, the University Maverick A24 #1. Drilling will commence after the holidays and Torchlight will be testing a structural high that it expects will prove eight potential zones below the unconventional Penn formation that was previously discovered in the A25 #1 horizontal well.
Torchlight Energy Resources announced that the company has spudded the first well of the next three planned wells for the company's Orogrande Basin Project with its operator Maverick Operating and its drilling partner Wolfbone Properties. The first well to be drilled is the University Rich A11 #2. The well will be a twin to Torchlight's Rich A11 #1 well drilled in 2015. Torchlight experienced difficulties during the drilling of the Rich A11 #1 and it was ultimately determined that the cement job on the casing had failed. As a result of data gathered from that process, Rich Masterson has identified five distinct Wolfcamp unconventional targets ranging in thickness from 86 feet to 160 feet. The company will drill, log, core, and test this geologic concept to produce evidence that these zones spread out over a significant portion of its acreage block.
Meetings to be held in Milwaukee on October 23 and in Chicago on October 24 hosted by Roth Capital.