![]() ![]() "Despite our efforts, we can provide no assurance that we will be able to obtain the financing required to meet our stated objectives or even to continue as a going concern." ![]() "Our current assets are insufficient to meet our current obligations or to satisfy our cash needs over the next twelve months and as such we will require additional debt or equity financing… "We expect to continue to have cash flow provided by financing activities as we seek new rounds of financing and continue to develop our oil and gas investments. Its accumulated losses doubled in six months and now total $64.7 million. Torchlight has existed on a mountain of loans and stock offerings. (Sources: Company SEC filings here, here) Note that in just the last quarter, Torchlight lost ~$31 million - which is more than the total future oil reserve value hinging on long-ago oil prices. The chart below suggests the depth of Torchlight's financial difficulties.Īs shown by the red column below, with the exception of the working capital, Torchlight's terrible finances became far, far worse this year. Stock Offering Ahead: Running Out Of Cash, Insufficient Assets Warning, Going Concern In Kansas alone this year, 226 of 602 wells drilled have been dry holes.Īnd Torchlight had to revise its own reserves downward by one-third or over 388,000 barrels in 2014, primarily because two wells "are now considered uneconomic at current prices."Ģ. Nobody really knows how much oil is underground, whether oil will be struck or whether any given well will actually be economically productive. ![]() "Future net revenue presented in this report … should not be construed as being the fair market value of the properties." Note the warning contained in a letter sent to Torchlight by consultants hired to estimate the potential: But the outcome is extremely iffy, as described below in "Depressing Torchlight Properties." Torchlight insults investors by trumping up its estimated future revenue from reserves - about $23 million - based on outdated, unlikely-to-be-seen-again-for-many-years oil prices.įurthermore, investors may think that Torchlight has a good shot at getting that oil out of the ground when they read about its " proved undeveloped," or " proved developed" reserves. Analysts recently told The Wall Street Journal that they predict crude will remain below $60 through 2016. Oil prices are running about $44 per barrel. Why? The company bases estimates on $91.48 oil prices! That's right. Torchlight's estimates of the value of its oil reserves - oil still in the ground - are out of touch with reality. Meanwhile, here are the top six reasons TheStreetSweeper would never own this stock. Torchlight was unavailable for comment by deadline, but investors may find other viewpoints here. In fact, financial despair may have forced Torchlight into an overly exuberant interpretation of its oil reserves. Much like its predecessor, Torchlight exists as a largely unproductive, money-chewing entity that hands investors a minus 360 percent return on equity. Now operating out of a small office leased from a Plano, Texas travel agency, Torchlight today claims five projects in Texas, Oklahoma and Kansas. So in 2010, the pole dancing company changed its name and ticker symbol, and emerged as an oil and gas company. Pole's founders invested less than a penny per share to start the biz and raised a few thousand dollars in 2008 by selling shares for 7 cents apiece.īut Pole teetered. The oil and gas company danced onto the public stage as Pole Perfect Studios, a business built around the one-time fitness fad. Torchlight Energy Resources (TRCH) appears poised to crumple back to reality. we'll use '^' and '$' as special letters representing the start and end of a wordįor ( var a = 1 a " + match + "" + match ) ![]()
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