Torchlight Energy has announced that an $8 million unsecured debt offering has been executed; which will help fund development of its newly acquired Hazel Project. The startup-E&P is now diversified across two assets - one Permian Basin asset and one asset that could potentially warehouse one billion barrels of oil within its resource inventory.
Just under twenty-four months ago, we at ATLAS provided research and consulting on an equity investment into Torchlight Energy. This initial round of investors was comprised entirely of institutional investors, primarily consisting of asset managers. Just over twelve months ago, we did the same for a large retail investor contingent. We were incredibly excited about the possibilities offered by Torchlight's Orogrande Project; an undeveloped West Texas resource play that could potentially warehouse one billion barrels of oil within its resource inventory. Torchlight Energy had a plan to strategically derisk and then fully develop the Orogrande Project by deploying newly developed, state of the art technologies which had never been deployed to the resource play.
Given the Orogrande Project's geological similarities to other, fully-developed resource plays in the Permian Basin, we thought at full development that the Orogrande Project could reset the economics of the domestic Oil Complex. We thought the Orogrande Project could be the next fundamental step-change in U.S. energy production at globally competitive rates of return - even at the "new normal" pricing range that had been established by OPEC. We believed that the Energy Complex, especially the capital markets, consistently undervalued technology deployment to new and/or under-developed resource plays and we wanted to take advantage of this lack of valuation.
In just under two years since our initial research, consulting, and investment - Torchlight Energy has completely optimized its capital structure, its asset base, its corporate governance, and its cash burn. The startup-E&P has done all of this into the single worst commodity crisis in the history of organized commodity markets. It's also done this into what equates to a full reorganization of its former financial structure; and into what have been uncertain equity and credit markets.
Today, Torchlight Energy announced that it will be deploying the proceeds of an $8 million unsecured debt offering to its newly acquired Hazel Project. The Hazel Project is a Permian Basin resource play which is running in parallel-development with continuing development efforts in the Orogrande Project. Torchlight will use a portion of the proceeds to retire $3.6 million in sub-debt.
Even in today's extremely stressed Energy Complex, it's no surprise to us that Torchlight was able to find investor demand for participation in its funding round. We were pleasantly surprised, however, to learn that the startup-E&P was able to complete its $8 million round, which equates to ~10% of the startup's enterprise value, without collateralizing the underlying debt and without issuing potentially dilutive warrants. We believe this debt round execution is a market signal that  the investment thesis at Torchlight Energy is finally coming to general market appreciation and  that the startup-E&P will have ready access to the debt and credit markets on a go-forward basis; always a milestone moment in any startup's maturation.
Torchlight Energy is now a balanced pairing of two investment theses:  the Orogrande Project for M&A and other disruptive development; and  the Hazel Project for long-term, traditional value unlocking.
We continue to believe in the team at Torchlight Energy and we continue to believe in the disruptive potential of the Orogrande Project. At the same time, we're excited and optimistic about the Hazel Project and what it can do from a baseline valuation standpoint. We're also excited about what the Hazel Project can do from the standpoint of derisking the total startup-E&P investment thesis. Now, with funding in-hand, Torchlight can execute into this derisking while unlocking value for seed/venture-level investors.
Congratulations on the successful round, Torchlight Energy.
 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.
 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.].
 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.
 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.
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