Torchlight Issues Shareholder Update
HOUSTON, April 5, 2012 /PRNewswire/ -- Torchlight Energy Resources, Inc. (OTCBB: TRCH) would like to take this opportunity to update our shareholders on our company's activities during the first quarter of 2012.
In Wilson County Texas, in the Marcelina Creek field, our Johnson #4 was acid fraced in early February. The well had been acting tight, not yielding oil in the quantities expected. The acid treatment was successful and has improved the well performance. We produced in excess of 1600 barrels in March. The well continues to clean up and rates have been rising. We are also making natural gas with the oil and are exploring ways to monetize the gas should it be in sufficient quantities in this well as well as those we plan to drill.
The Johnson #1-H, which was damaged during a work over by the service company, is still shut-in. However we are in discussions with the service company and believe we are close to resolution on the damages.
In November of last year we executed a farm-out agreement with Hockley Oil & Gas to partner with us in the Marcelina Creek field development. At the last moment Hockley failed to fund and after discussions to cure they continued not to fund. Subsequently we sued them for breach of contract. We continue discussions and have given them a ten day extension to answer the suit to work toward an acceptable solution.
In the Denver Basin (Kimball County, NE), where we have the right to farm-in to some 1600 acres, we are in final discussions with a potential farm-in partner. That farm-in will cause one well to be drilled to the Cretaceous J sand with the option for additional wells. If an agreement is reached drilling should begin in early May.
In January we took a farm-in at the Coulter prospect, in Waller County Texas, just west of Houston. Under the terms of the farm-in we provided funds to re-enter and frac the Sparks Formation, the main producing zone in the Katy Field, which we are offsetting. The well shows virgin reservoir pressure and is cleaning up. The well is expected to be rich gas and condensate. We have contacted the pipeline company and are in discussions on a gas purchase contract. Final testing of the well is expected within a week to ten days.
We continue to evaluate various acreage blocks in the Anadarko Basin, both in Oklahoma and Kansas. These blocks need to fit our strategy of locating new opportunities in areas that are primarily liquid rich in areas of proven production. We will however review prospects that yield gas but they must have some associated liquids and be economically attractive. We are looking to raising the necessary capital for these prospects by leveraging our assets in the near term to avoid dilution in our stock.
We filed our 2011 annual report on Form 10-K on schedule last week.
You can view more information on the company's website at www.torchlightenergy.com.
FORWARD LOOKING STATEMENTS
The information contained in this news release, other than historical information, consists of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements may involve risks and uncertainties that could cause actual results to differ materially from those described in such statements. Such forward-looking statements involve known and unknown risks and uncertainties, including risks associated with our ability to obtain additional capital in the future to fund our planned expansion, the demand for oil and natural gas, general economic factors, competition in general and other factors that may cause actual results to be materially different from those described herein as anticipated, believed, estimated or expected. The company is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements whether as a result of new information, future events or otherwise.
SOURCE Torchlight Energy Resources, Inc.