Earlier today, Torchlight Energy Resources, Inc. (NASDAQ:
TRCH) announced that the Orogrande Development Committee, which consists of
members of the project operator, Torchlight and consulting geologist Rich
Masterson, has elected to move forward on planning the next phase of drilling
in the Orogrande Project. Following this decision, the project operator is
expected to permit three new wells, beginning with the University Founders B-19
#1 well, to be drilled vertically for test purposes. These new wells will be
designed with sufficient casing size to support lateral entry into any pay
zones encountered during testing – including pay zones previously observed in
the existing Cactus well.
“We are pleased that the project operator is underway on
next steps in evaluating our Orogrande Project,” Will McAndrew III, chief
operating officer of Torchlight, stated in the news release. “Drilling
additional test wells is the appropriate next action, providing data necessary
for validation of the play and the development plan for the entire 168,000
acres. Our principal strategy is to create control data by strategically
placing wells across the acreage and thus creating a development thesis for the
entire basin.”
Field operations stemming from this agreement are set to
begin within 90 days and in line with the development agreement. Last
September, Torchlight announced entry into a definitive agreement with Founders
Oil and Gas, LLC of Midland, Texas, through which Founders will contribute $50
million in development capital by 2017 – including a $5 million reimbursement
for initial project costs – in exchange for 50 percent working interest in the
Orogrande Project. Following the commencement of new drilling operations,
Torchlight will receive a payment of $500,000 resulting from this partnership.
“The capital and expertise being provided by our operating
partner has set the stage for continued value creation for Torchlight and our
shareholders,” concluded McAndrew.
Currently, Torchlight owns 95 percent working interest in
the 168,000 acre Orogrande Project, which is located in Hudspeth County, Texas.
The company is targeting 1,300 feet of pay at a depth of approximately 4,000 to
6,100 feet. In prior testing, Torchlight utilized the Rich A-11 well to gather
key data for its field development thesis, but a poor cement bond discovered
during testing prevented a cost-effective production test of the project’s
primary pay zones. Repairing these defects was determined to be economically
unfeasible, and, as a result, the development committee approved plans for
drilling of the next wells with larger casings that can be utilized for both
testing and commercial production moving forward.
For more information on the company, visit
www.TorchlightEnergy.com
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