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.
SOURCE Torchlight Energy Resources, Inc.
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