Texas Wildcatter Torchlight Energy Takes Frac Tech to the Orogrande Project

ATLAS congratulates the Torchlight Energy team on permitting its first horizontal Well in the Orogrande Project

Nearly two years ago, into the heart of what would eventually prove out to be the longest and most catastrophic commodity crisis in the history of Energy, we at ATLAS made a data-based bet on a pre-production oil and gas E&P [i.e., “exploration and production company”]. At the time, prior to an aggressive and historic asset restructuring effort, the E&P we had bet on had substantially one asset we were interested in: its Orogrande Project [based in the Orogrande Basin — a completely unproven West Texas resource play].

The Orogrande Basin, effectively leased in its entirety by Torchlight Energy, closely resembled its tethered-E&P — it had no established production and it presented its own set of unique stress points. This is why Torchlight had the opportunity to lease the Orogrande Basin acreage [1] in its entirety and [2] at economics that made sense to a pre-production, stressed-E&P. Nobody else wanted the Orogrande Basin.

The Orogrande Basin had a long, established, and something of infamous track record of turning back E&Ps — of leaving them wanting. Of course, it only turned these E&Ps back after the E&Ps had spent millions in trying to develop what could potentially be a billion barrel resource play — the reason many an E&P had tried their hand at wildcatting the play in the first place [the potential payload locked within the rocks]. The Orogrande Basin had become a pariah; one that not only beat its challengers — but embarrassed them.

Littered with geological complexities thanks to intense geological-deformations caused by millions of years of uplifts, faulting, igneous intrusions and volcanism — looking for prospective pockets is infinitely harder in the Orogrande Basin than, say, the Midland Basin; which is an eastern located, much friendlier, much more famous peer of the Orogrande Basin

But Torchlight wasn’t coming to the Orogrande Basin — which houses its Orogrande Project — looking to replicate the efforts of its predecessors. Torchlight was optimizing an Orogrande Project-tailored Well-strategy that would see it deploy twenty years of macro-technology evolution; of translated Frac Tech evolution that it believed gave it unprecedented geological and Well-design insight as well as unprecedented technical prowess. Torchlight was looking to challenge the unique geological complexities of the Orogrande Basin, to challenge the extraordinary Well-design difficulty presented by the Orogrande Basin, and to challenge the nearly limitless down hole variables it was sure to encounter upon launching its drilling and exploration program.

We believed that Torchlight, led into the Orogrande Basin by famed prospector-geologist Rich Masterson, could execute — if it were able to collect enough data prior to launching a wildcatting program — and we believed that Torchlight had the geological, geophysical, and reservoir engineering team in place to do what had never been done before. In short, we believed that Torchlight could disrupt the global Energy Complex by successfully proving out its Orogrande Project efforts. Torchlight, with its last vertical Well-test, has gathered the necessary data to move the Orogrande Project thesis forward.

Nearly two years later, Torchlight Energy has permitted the first horizontal Well for its Orogrande Project; the first horizontal effort in the history of the Orogrande Basin. With this horizontal effort, Torchlight moves beyond vertical Well-testing and vertical Well data collection and into thesis prove-out. With this horizontal effort, Torchlight will be able to deploy the full war chest of its technology, its geological, geophysical, and Well-design learnings, as well as its vertical-Well tested operating-learnings. Torchlight, more so than any of its predecessors and more so than any E&P in the history of the Orogrande Basin, is ready to prove concept; it’s ready to unlock its Orogrande Project.

We met with the Torchlight team at Torchlight HQ just two weeks ago to review overall strategy, Well-location, and the geological complexities of the Orogrande Project. We’ve never been more confident in Torchlight or in the strategy for attacking the Orogrande Project; and we’re extremely excited that Torchlight has moved forward with a horizontal permit.

“Having done very detailed mapping and avoiding areas with intense faulting, volcanism, high clay contents, and which were overly mature [thermally], Torchlight Energy zoomed in on a 168,000 net acres within the oil window in Texas” — Wunderlich Securities [New Permutations to the Permian Theme: The Alpine High and Orogrande Basin]

Through each stage of maturation and through each stage of optimization we’ve been proud to work with Torchlight management and we’ve been proud to support its development efforts. We continue to believe in the team at Torchlight and we continue to believe in the disruptive potential of its technology-first approach to revolutionizing the Energy Complex.

Congratulations on first horizontal Well permit, Torchlight Energy.

DISCLOSURE:

[1] Torchlight Energy Resources, Inc. was not involved in any aspect of the above note preparation or in any aspect of the preparation of any data or information presented

[2] I have not received compensation from Torchlight Energy Resources, Inc. or any other party for the writing of this note; and/or any other note written prior [regarding Torchlight Energy Resources, Inc.]

[3] I may or may not have received compensation for providing research and/or consulting regarding Torchlight Energy Resources, Inc. from third-parties at some point prior to writing this note and/or I may receive compensation for providing research and/or consulting regarding Torchlight Energy Resources, Inc. at a later date. This includes providing subscription-based research and/or consulting services to both institutional and retail-based capital market participants.

[4] Dallas Salazar: I own, or my family or company owns, or I have influence over some amount of the outstanding shares of the following companies mentioned in this note: Torchlight Energy Resources, Inc.

[5] The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility.

[6] Torchlight Energy Resources, Inc. holds the license to the title image included in the note title; to which the company has allowed me a one-time publishing right. I did not pay for this right nor will I be providing a fee of any sort for this right into the future.