In July 27 research report, John White, an analyst with ROTH Capital Partners, indicated that Torchlight Energy Resources Inc.'s (TRCH:NASDAQ) test well at the Orogrande project began to produce significant hydrocarbons. "We view the hydrocarbon flow rates and results as very positive," he added.
After being fracked in six stages, the 1,000-foot lateral University Founders A25 #1 well in the Pennsylvania Formation produced a peak of 1.8 million cubic feet (1.8 MMcf) daily, mostly gas but some "41-degree gravity oil," relayed White. Daily gas production ranged from 1–1.4 MMcf, varying with choke size. This confirmed that the Orogrande Basin hosts a petroleum system containing the source rock needed to produce hydrocarbons.
Based on available data, Torchlight management expects oil production at the test well to increase, for two reasons. The first is that core samples, for one, demonstrated "the Ro (a measurement of thermal maturity) is well within the oil window and this additionally indicates the likelihood of increased oil volumes," White explained.
The second reason is that oil flow in the well's lower four stages is presumably being obstructed by the gas liquids in the well's uppermost completed stages.
White highlighted that Torchlight has ordered and is awaiting delivery of equipment that should fix the problem, by unloading the wellbore, thereby facilitating oil flow and recovery. Until that time, production at the well has been suspended.
ROTH has a Buy rating and a $1.75 per share target price on Torchlight, whose stock is trading today at around $1.23 per share.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from ROTH Capital Partners, Torchlight Energy Resources Inc., Flash Note, July 27, 2018
Regulation Analyst Certification ("Reg AC"): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Within the last twelve months, ROTH has received compensation for investment banking services from Torchlight Energy Resources, Inc.
ROTH makes a market in shares of Torchlight Energy Resources, Inc., and as such, buys and sells from customers on a principal basis.
A Research Analyst and/or a member of the Analyst's household own(s) debt or equity securities of Torchlight Energy Resources, Inc. stock.
Shares of Torchlight Energy Resources, Inc. may be subject to the Securities and Exchange Commission's Penny Stock Rules, which may set forth sales practice requirements for certain low-priced securities.
Within the last twelve months, ROTH has managed or co-managed a public offering for Torchlight Energy Resources, Inc.
ROTH Capital Partners, LLC expects to receive or intends to seek compensation for investment banking or other business relationships with the covered companies mentioned in this report in the next three months.