The firm reported that it has agreed to sell the acreage after an option period and settled on a price of $1,300 per acre. According to the terms of the agreement, the investors are required to drill and complete the Flying B Ranch #4 well in the project in order to earn the option. Upon completion of the well there is to be an evaluation period after which time the investor group will have the option to acquire the remaining acreage for the agreed upon price.
Torchlight Resources advised that it controls 9,600 net acres in the project and would receive approximately $12.4 million if the option is duly exercised and the acreage is sold. The company indicated that in that case the funds would be transferred by no later than March 31, 2021.
The firm added that in the event that the investors choose not exercise their option, they will be entitled to recoup their funds from the revenue associated with the Flying B #4 well's production. After their costs have been repaid, the wellbore and production would be turned back over to Torchlight and the well would be drilled and completed horizontally in the Wolfcamp A formation with a proposed lateral distance of 7,500 feet.
Torchlight CEO John Brda stated, "We have remained steadfast in our pursuit to sell off our non-core assets and focus on the Orogrande prize...This transaction solidifies the value we have in the Hazel project and more importantly, if the option is exercised and the transaction completed, will provide for sufficient capital to pay off our secured debt. The group of investors are sophisticated high net worth investors who see the value in the Hazel project, having the foresight to move the asset forward in a down market."
Read what other experts are saying about:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Torchlight Energy. Click here for important disclosures about sponsor fees. As of the date of this article, an affiliate of Streetwise Reports has a consulting relationship with Torchlight Energy. Please click here for more information.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Torchlight Energy, a company mentioned in this article.