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Texas Wildcatter Torchlight Energy Strikes Oil In The Permian Basin

|Includes: Torchlight Energy Resources, Inc. (TRCH)

ATLAS congratulates the Torchlight Energy team on first-production and on a successful vertical Well-test

Torchlight Energy has announced that the results of its "Flying B Ranch #2" vertical Well-tests were positive; and that it has brought oil to the surface for the first time via its Hazel Project. The startup-E&P is now a balanced pairing of two investment theses: [1] the Orogrande Project for M&A and other disruptive development; and [2] the Hazel Project for long-term, traditional value unlocking.

Two and a half years ago, when OPEC had collectively announced that it would forego trillions of dollars in revenues in an effort to squeeze US oil production out of the market, not many would have predicted that two and a half years down the road - into what is an absolutely decimated oil landscape - a startup oil exploration and production company would be bucking the trend of bankruptcy and capital deployment delay to try to develop two new asset plays in parallel to each other. Nobody would have made this prediction in knowing that the startup-E&P attempting to do this [1] would have substantially zero flowing production at initiation of the attempt, [2] would be endeavoring to wildcat a completely unproven West Texas resource play, and [3] would be a technology-first E&P in an industry that has, for a century, substantially rejected technology deployment. But, that's exactly what technology-first startup Torchlight Energy is doing in both its Orogrande Project as well as its Hazel Project.

In both plays, Torchlight has the opportunity to make history: history from a capital raising standpoint, history from a production standpoint, and history from an execution standpoint. This is why we at ATLAS decided to make a data-based bet on Torchlight just under 24 months ago - a bet that new technology deployment and that evolved operational procedure execution could unlock value from within two new resource plays; one being a true wildcat. A bet that the Energy Complex would undervalue the deployment of both - a consistent spatial dynamic that has proven time and time again as a losing bet against innovation.


On Monday, April 25, 2017, Torchlight Energy took a major step forward, towards history, with its successful vertical Well-testing via its Hazel Project.

Torchlight has announced that it has brought oil to the surface via its Flying B Ranch #2 vertical-Well. While a test-Well and while only one stage, a measure of Well-complexity as well as commercial viability, the successful vertical Well-testing is a major milestone in the history of Torchlight. First-production is often remembered as the single most viability-driving fundamental development in an E&P's life cycle. We couldn't be happier for the team at Torchlight and we congratulate the team on its successful execution.

As excited as we are about the announced Flying B Ranch #2 vertical-Well testing results, we're infinitely more excited about the immediate-term go-forward strategy at the startup. Torchlight announced that it plans to complete additional testing on the Flying B Ranch #2 vertical-Well, turn the Well back to production [and first sales], and ultimately move to the Flying B Ranch #3H Well. The Flying B Ranch #3H Well, which is currently being permitted, will be the first horizontal-Well in Torchlight's short startup history.

As Torchlight moves to horizontal drilling in the Permian as well as advances its efforts in the Orogrande Project we'll have much deeper insight into the viability of our investment thesis at the startup-E&P; we'll have validation of data which has been years in the making. We couldn't be more excited to get this data and we couldn't be more optimistic in our expectations - given the data collection so far and given our continued due diligence efforts.

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. Torchlight Energy is now a balanced pairing of two investment theses: [1] the Orogrande Project for M&A and other disruptive development; and [2] the Hazel Project for long-term, traditional value unlocking.

Congratulations on first-production, Torchlight Energy.


[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.