Torchlight Energy Reports Third Quarter 2014 Earnings

PLANO, TX--(Marketwired - November 17, 2014) - Torchlight Energy Resources Inc. (NASDAQ: TRCH) ("Torchlight Energy" or "the Company"), a rapidly growing mid-continent oil and gas company, today reported its third quarter results for the three months ended September 30, 2014. The Company filed a 10-Q with the U.S. Securities and Exchange Commission for the third quarter of 2014 on November 14, 2014.

Third Quarter 2014 Highlights and Subsequent Events

• Revenues increased 330% to approximately $2.0 million for the third quarter 2014 versus 2013
• 34 producing wells at September 30, 2014 with 413 BOEPD net; with an additional ten wells in final stages of development
• Average lifting cost (excluding depreciation, depletion, and amortization) was approximately $20.00 per BOE for the nine months ended September 30, 2014. The cost per BOE has declined from 2013 due to 2014 having a greater concentration of producing properties in Oklahoma versus Texas. Hunton wells in Oklahoma have lower lease operating costs per well
• Purchased 100% Working Interest in 172,000 acres in the Orogrande Basin in West Texas (most of the acres purchased were contiguous)
• Drilling Program underway at the Ring Energy Project with 7 wells drilled as of September 30^th
• Announced further expansion in the Hunton Play with Husky Ventures
• Completed $3 million private offering on August 15, 2014 to fund drilling programs
• Updated Reserve report adding significant Proved and Probable reserves

"While the price of oil has been the principal topic of discussion recently it's important that our shareholders understand Torchlight is a low cost producer and only focused on producing wells which are economical," stated Tom Lapinski, Chief Executive Officer of Torchlight Energy. "We added significant development potential this quarter in the Hunton Play and in the closing of the Orogrande acreage. The Company's four main projects provide numerous future well-site locations and our deployment of capital, assisted by the potential sale of the Coulter and Smokey Hill assets, will be carefully budgeted between these projects as we continue to increase daily production. While we cannot control the price of oil, our job is to stay focused on creating intrinsic value in the organization and deploying capital with the best possible return while minimizing risk."

Financial Results

For the three months ended September 30, 2014, the company reported revenues of approximately $2.0 million, an increase of 330% when compared to $0.5 million in the same period in 2013.

Operating expenses for the third quarter, 2014 decreased 5.2% to $3.07 million from $3.24 million in the third quarter of 2013. Operating expenses were primarily made up of non-cash charges that included stock and warrant compensation of $1.1 million and depreciation and amortization expense of $0.8 million. 

Net loss for the three months ended September 30, 2014 was $2.8 million, or $0.15 per share, compared to a net loss of $3.4 million or $0.24 per share, in the same period of 2013. 

The Company had $37.2 million of assets and $21.8 million shareholders' equity at September 30, 2014 compared to $16.7 million and $9.2 million, respectively, at December 31, 2013. 

"The inherent leverage in the Company's business model by being a non-operator in several of our properties will become more apparent in the fourth quarter and moving into 2015," stated John Brda, President of Torchlight Energy.

Business Updates

Torchlight Energy currently has interests in four main oil and gas projects:

1. Marcelina Creek Field Development in Wilson County, Texas
2. Ring Energy Joint Venture in Southwest Kansas
3. Hunton play in partnership with Husky Ventures in Central Oklahoma
4. Orogrande Project in West Texas

Additionally, the Company currently owns two non-core assets; The Coulter in Waller County Texas (970 acres) and the Smokey Hill Prospect in McPherson County Kansas (4,200 acres) which have been suspended pending technical review and possible disposition.

Torchlight Energy commenced drilling its initial 5-well program in Southwest Kansas in February 2014 and as of September 30, 2014 seven wells have been drilled; three are producing, two were drilling at September 30, 2014, one will be converted to a salt water disposal well, and one was not completed. 3-D seismic data will be acquired before selection of future drill sites. 

Torchlight Energy increased its ownership in the Hunton Play with Husky Ventures acquiring 25% Working Interest in the T4 AMI increasing our acreage position in the Hunton by 1,690 acres. The drilling program in the Hunton continues to accelerate as a five rig drilling program is set to resume in early 2015 increasing the number of wells being drilled. The combination of a five rig drilling program and ongoing leasing activity provides pronounced opportunities to deploy capital and grow the Company's existing production portfolio.

Torchlight owns mineral lease interests in multiple Hunton AMIs in percentages which vary from area to area. Gross undeveloped acreage in those combined Hunton AMIs totalled approximately 28,000 acres as of September 30, 2014.

On August 7, 2014, the Company purchased 100% Working Interest, 75% Net Revenue Interest in 172,000 mostly contiguous acres in the Orogrande Basin in West Texas. The acreage is in a five-year lease with five year extension provisions. Operations will begin no later than March 31, 2015 by drilling one well every six months to hold the acreage. The initial test program will consist of four vertical wells to be drilled at depths estimated at 6,000 ft. The data provided by the first four test wells will determine the production potential in the play.

Outlook

Over the next 90 to 120 days, our expectations are to: 1) continue the pace in the Hunton play with Husky Ventures; 2) complete the next set of wells and 3D seismic survey with Ring Energy; 3) drill the next Austin Chalk well in South Texas; 4) the Orogrande project will be evaluated and preparations for the first test wells in the project will continue. In addition, disposition of the non-core Coulter and Smokey Hill assets will be evaluated.

Conference Call

Management will host a conference call at 4:15 p.m. ET on November 20, 2014 to discuss its third quarter 2014 earnings results.

A replay of the call will be available after 7:30 pm ET November, 2014. To access the replay, use 877-870-5176 for U.S. callers and 858-384-5517 for international callers. The PIN number is 13595906.

About Torchlight Energy

Torchlight Energy Resources Inc. (NASDAQ: TRCH), based in Plano, Texas, is a high growth oil and gas Exploration and Production (E&P) company with a primary focus on acquisition and development of highly profitable domestic oil fields. The company currently holds interests in Texas, Kansas and Oklahoma where their targets are established plays such as the Eagle Ford Shale, Mississippi Limestone and Hunton Limestone trends. For additional information on the company, please visit www.torchlightenergy.com.

Forward Looking Statement

This news release contains 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 the company's ability to obtain additional capital in the future to fund planned expansion, the demand for oil and natural gas, general economic factors, competition in the industry 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.