Based in Plano, Texas, Torchlight Energy (NASDAQ:TRCH) is an energy company focused on the “acquisition and development of highly profitable domestic oil fields.” For commodities-market investors, TRCH stock offers exposure to rising asset prices at an affordable price point.
West Texas intermediate crude oil has gone on a tear, catapulting from $35 and change per barrel in late October to more than $66 in early March.
Sure, there are exchange-traded funds that you can use to ride the petroleum bull. Yet, investing in companies with high-potential oil assets can magnify your gains in the broader commodities-sector uptrend.
Some of you probably haven’t investigated Torchlight Energy yet, so I invite you to join me as I take a closer look at this fascinating energy-market player, along with the stock’s recent price moves.
TRCH Stock at a Glance
Jan. 25, 2021, was an important day for Torchlight Energy. That’s the day when TRCH stock regained compliance with Nasdaq Exchange listing requirements.
If a stock’s bid price remains below $1 for too long, the Nasdaq Exchange might de-list that stock. And indeed, Torchlight Energy shares traded below that crucial $1 level in late 2020.
Thankfully, the bulls took control of TRCH stock and ran it up in January. Shares even hit the $2 target on Jan. 25.
That wasn’t even the end of the story as the Torchlight Energy share price surpassed $4 on Feb. 16. Then, however, a pullback ensued as the stock price retreated to $2.14 on March 5.
It’s encouraging to know that the stock isn’t currently in jeopardy of being de-listed from the Nasdaq. Hopefully, the bulls can retake the $4 level and hold it the next time around.
Based in the Basin
Like many American oil companies, Torchlight is headquartered in the heart of Texas’s famous Permian Basin region, which itself comprises a number of petroleum-rich basins.
Now, Torchlight Energy might be relatively small with its market capitalization of about $322 million (according to Yahoo Finance), but don’t discount this company as a minor energy-market player.
Impressively, Torchlight’s three projects easily span more than 100,000 net acres. Here are the highlights of those projects:
- Orogrande Project – 133,000 acres in the Orogrande Basin; six vertical test wells, and two horizontal wells successfully drilled to date.
- Project Hazel: 12,000 acres in the Midland Basin; surrounded by numerous successful oil and gas wells dating back to the 1960’s.
- Winkler Project: 1,080 acres in the Delaware Basin; contains six prospective benches or “stacked pay zones,” where as many as 20 long laterals can be drilled.
Due to prime location of the company’s assets, Torchlight Energy could be the target of an acquisition.
And indeed, the company seems open to the possibility as the “Preferred target acquirer would be a larger public E&P [exploration and production company].”
Eliminating Debt Burden
Let’s not kid ourselves: oil drillers are sometimes known for carrying heavy debt loads. Fortunately, Torchlight Energy does not appear to fall into that category.
As reported by InvestorPlace contributor William White, Torchlight Energy’s remaining secured noteholder recently converted all $1.5 million of the company’s remaining debt into shares of TRCH stock.
How is this good news? As the company’s statement explains, “This leaves Torchlight with no term debt remaining on its books.”
Moreover, “The blanket liens on the Orogrande Project and the Hazel Project that were securing the debt will be released in full.”
So now, Torchlight Energy doesn’t have to use those two assets to secure the company’s debt anymore.
It’s a huge burden to be lifted off of the stakeholders’ shoulders. And, it comes on the heels of an earlier announcement in which Torchlight Energy had eliminated $1,120,000 worth of subordinated debt.
As you can see, Torchlight Energy is on the right track in eliminating its debt burden – something you can’t necessarily say about every other oil company.
Plus, the company holds multiple energy assets in prime locations. Therefore, TRCH stock could be a solid pick for folks seeking to capitalize on the commodities bull cycle.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.