ATLAS congratulates Torchlight Energy on a successful Annual Shareholder Meeting I recently had the pleasure of attending Torchlight Energy’s . With Torchlight Energy being a large portfolio holding and with Torchlight being a multi-year investment for ATLAS — a considerable time, opportunity, capital, and — the was an important checkpoint. Very rarely are executive management, the Board of Directors, and key investors in such an intimate and real-time response environment. Torchlight’s offered a unique opportunity to update our investment thesis; as well as to consider optimization strategies, potential value-add scenarios, and exit timelines. Annual Shareholder Meeting reputation commitment Annual Shareholder Meeting Annual Shareholder Meeting We’re happy to report that we were more than satisfied with the and that we continue to believe in the disruptive potential of Torchlight Energy’s technology-first approach. Never before have we been more confident that Torchlight has the as well as the underlying to be able to execute its investment thesis. While Torchlight very much so still has venture level execution risk, we believe that it has the operating strategy to execute — even given the historic degree of difficulty it faces in attacking its assets. While every potentially industry disrupting endeavor has unique risks and unique uncertainties, post- we’re confident that Torchlight’s wildcatting attempts in both its Hazel Project and its Orogrande Project will yield productive results. Annual Shareholder Meeting; technology geology Orogrande Project Annual Shareholder Meeting With Torchlight being just months away from a drilling and completion program launch — Torchlight has already launched in the Hazel Project, it’s paramount that Torchlight be sure of its operational program. In hosting numerous multi-hour meetings with both the executive management team and the Board of Directors, I’m confident that the execution strategy is optimized. multi-play Torchlight management, impressively so, presented a point-to-point, logical, and decisive technical-strategy for attacking both the as well as the [the first horizontal Well attempts in the Orogrande Project and Hazel Project, respectively]. In meeting with Torchlight’s operations and technical team, I was impressed with the degree of granularity that each technical risk had been assessed and that each technical risk had been resolved . Torchlight, in staying to its core competency, has found ways to deploy modern Frac Tech to tailor a scheme-based solution for each anticipated complexity. University Founders A25 #1 Well Flying B Ranch #3H Well through technology-first, engineered solutions It’s in these engineered solutions that I derive my conviction in [1] the operational approach being deployed and [2] the probability of ultimate success. Seemingly, Torchlight has the architecture, design, landing capacity, and technology to be able to execute. Torchlight’s ultimate success or failure will be entirely dependent on its ability to maximize the utility of current Frac Tech; effectively, the Torchlight investment thesis and company “DNA”. “ aving 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] H But Torchlight isn’t simply an operational story, it’s also very much so a story. Torchlight’s geology — its underlying acreage, collected through a unique combination of relationships as well as a willingness to attack difficult complexities, is absolutely sound; a belief that was reinforced in multiple presentations at the Torchlight has collected libraries of data — data which it has been able to refine, cleanse, model, and analyze in ways that have never been applied to either the Hazel Project or the Orogrande Project. Post- I’m convinced that Torchlight has an unprecedented geological insight into its two resource plays; one that it believes has helped it identify productive acreage within undeveloped Projects. Quite possibly Torchlight’s most valuable asset might be its geological expertise — the collective geological intellectual capacity of its combined management team, Board of Directors, and consulting geologist. geology Annual Shareholder Meeting. Annual Shareholder Meeting Torchlight’s unique ability to read and assess complex geology — including subsets of geology within larger Projects or plays— has allowed it to aggregate a uniquely large acreage position for an E&P its size. We challenged Torchlight on [i] , [ii] , [iii] , [iv] , [v] , [vi] , [vii] , [viii] , [ix] , and [x] . In every instance we were met with more than adequate rebuttal. Geology, in our opinion, was the single largest risk to the investment thesis at Torchlight — given that geology can’t be altered, iterated, or changed [as nearly all other parts of the operational process can]. Having performed multiple interviews and sat through multiple presentations, we believe Torchlight’s geology to be greatly derisked to our prior evaluations; and it should be noted that we were more than satisfied to be invested at “prior evaluations”. thickness of reservoir porosity permeability brittleness clay content TOC thermal maturity matrix permeability pore throat sizing overall complexity translating to operational risk orchlight Energy is looking to challenge the unique geological complexities of the Orogrande Basin — one of its two major Projects; to challenge the extraordinary Well-design difficulty presented by the Orogrande Basin, and to challenge the nearly limitless down hole variables it is sure to encounter upon launching its drilling and exploration program T Having completed initial data-collection and analysis efforts, Torchlight Energy is proceeding with first horizontal-Well deployment; including the first horizontal effort in the history of the Orogrande Basin. With these horizontal efforts, Torchlight moves beyond vertical Well-testing and vertical Well data collection and into thesis prove-out. With these horizontal efforts, 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 Energy is ready to prove concept. We’ve never been more confident in Torchlight or in the strategy for attacking both the Hazel Project and the Orogrande Project; and we’re extremely excited that Torchlight has moved forward with horizontal Well deployment. Through each stage of maturation and through each stage of optimization we’ve been proud to work with Torchlight Energy management and we’ve been proud to support the E&P’s development efforts. We continue to believe in the team at Torchlight Energy and we continue to believe in the disruptive potential of its technology-first approach to revolutionizing the Energy Complex. 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 certain images included in the note above; 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.
