Investor in Torchlight Discusses Hudspeth County Project
In comments to the El Paso Inc. this week, the president of the company that has invested in Torchlight Energy’s Hudspeth County oil-and-gas project said his company is committed to exploring the project’s potential – and is prepared to overcome the obstacles associated with opening a new play in an area that has not seen petroleum development in the past.
“It is an exciting play, and the initial data from the first well drilled appear to be very promising,” Brian M. Sirgo, president of Founders Oil and Gas, told El Paso Inc. in an email interview. “Enough so that we felt we could commit the funds needed to fully explore the opportunity.”
Torchlight announced its agreement with Founders on Sept. 29. Founders has agreed to invest $50 million in the Hudspeth County project – $5 million to reimburse Torchlight for expenses to date, and $45 million over two years to launch a fracking operation on Torchlight’s Hudspeth County lease.
Formed earlier this year, Founders is a subsidiary of a larger publicly traded company – and the identity of that company has not been released. But El Paso Inc. said the company is “thought to be” D. R. Horton, which is the largest home-construction company in the United States and generated more than $8 billion in revenues in 2014.
Sirgo himself has 35 years of experience in the oil-and-gas industry, and he said he is familiar with speculative plays like Torchlight’s.
“Although the project could be considered ‘frontier’ in nature, we have had experience with these types of plays in the past,” Sirgo told El Paso Inc. “The challenges of no current infrastructure, readily available services and access to markets for products, while tough at the outset of the project, we feel can be overcome.”
Torchlight has leased almost 170,000 acres in northwestern Hudspeth County, and last spring the company drilled a first test well, about 10 miles east of El Paso County and 2 miles south of the New Mexico state line.
Company officials believe that, with the techniques of hydraulic fracturing, or fracking, and horizontal drilling, they can open up a major new shale play on the lease. It would be the first such oil-and-gas play in the desert-mountain country of Far West Texas, and the Torchlight project could involve as many as 2,500 wells.