HOUSTON, Jan. 3, 2013 /PRNewswire/ -- Torchlight Energy Resources, Inc. (OTCBB:TRCH), an independent oil and gas company headquartered in Houston Texas is pleased to announce that the company has signed an agreement with Redhawk Resources on its 15,000 gross acres in Finney County, Kansas.
The transaction is the result of an Option Agreement signed between Redhawk and Terrace US Holdings, LLC (a wholly owned subsidiary of Terrace Energy Corp.). When closed, the transaction will result in Torchlight receiving a 9% WI in the acreage and a small overriding royalty interest (ORRI). Torchlight will be carried through the tanks on a minimum of three horizontal Mississippian obligation wells, with the possibility of several more carried wells upon results of the test program. The acreage lies in the immediate vicinity of acreage leased and in the process of being developed by some well-known oil and gas companies including Sandridge Energy and Encana Corporation. The transaction is expected to close in late Q1 or early Q2 2013 and initial development of the field occurring shortly thereafter sometime in late Q2 or early Q3 2013.
The Mississippi Lime trend is a well-known conventional tight limestone formation that is currently producing from over 15,000 vertical wells on over approximately 17 million acres. With the emergence of horizontal drilling technology, the area has undergone a revival and is the focus of significant leasing activity by many oil and gas companies. Two successful Mississippian Lime wells were recently announced on neighboring acreage in Western Finney County.
Torchlight's President, John Brda said, "This is an exciting opportunity for Torchlight to get involved in one of the most prolific oil plays going right now. The working interest should provide Torchlight with cash flow sometime in early Q3 of 2013. In addition, because our interest is carried for at least three wells and possibly as many as six or seven wells, by the time we are responsible for our own working interest contribution, we will be doing so out of cash flow. By size of acreage and opportunity for Torchlight, this is the single largest deal in our short history and when fully developed, provides Torchlight with significant upside and cash flow."
You can view more information on the company's website at www.torchlightenergy.com.
ABOUT TORCHLIGHT ENERGY
Torchlight Energy Resources, Inc, headquartered in Houston, TX, is positioned as an oil and gas company with a primary focus on oil. Torchlight will focus on highly probable and profitable drilling and working interest programs that have a short payback period, high IRR and proven reserves and are located in domestic, onshore fields.
With a proven management team and tremendous access to pre-market deal flow, the Company is positioned for tremendous near-term growth for our shareholders. Torchlight will identify drilling opportunities with a high probability of success, purchase working interest ownership in proven field development programs, spread the risk associated with drilling programs by entering into a variety of programs in different fields with differing economics but all with reputable operators and hedging production when possible for predictable cash flows.
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.