HOUSTON, Dec. 19, 2011 /PRNewswire/ -- Torchlight Energy Resources, Inc. (OTCBB:TRCH - News) is pleased to announce to its shareholders that it has executed an LOI to farm into a gas and condensate prospect in Waller County, Texas.
On 16 December Torchlight agreed to farm-in to a 940 acre block controlled and operated by La Sal Energy LLC of Houston, Texas. The block is a direct offset and extension to the prolific Katy Field discovered by Exxon in the mid-1960's. The field is reported to have had 6 TCF of gas and many wells are still producing today.
Torchlight will contribute funds to re-entry and fracture stimulate the Sparks Formation, the main producing zone in Katy field. For that contribution Torchlight will earn a 40% interest in the block which has one additional re-entry and one possible new well to drill. Torchlight will also have the option to increase its working interest up to an additional 5% following the results of the re-entry.
"We look forward to this in-close development opportunity as it gives us nearly immediate cash flow and upside potential with the two additional locations. And under the terms of our farm-in we receive a significant portion of the revenue before payout which makes for attractive economics. Further La Sal has a well established and experienced operations team with many years experience in the Texas Gulf Coast." Tom Lapinski, Torchlight's CEO went on further to say, "this opportunity fits Torchlight's strategy of capturing opportunites that have rapid cycle time, are low-risk, in close development, or re-development with established industry partners. It also has the potential for more than one productive zone and the gas is rich in condensate which adds significant value to the economics."
The re-entry is expected to be done as soon the farm-in documents are executed and contract services can be scheduled. The farm-in documents should be finalized by 22 December.
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.