Faced with cash shortage, Torchlight Energy Resources Inc. (NASDAQ: TRCH) is seeking additional capital through the sale of securities. The company recently offered convertible preferred stock through which it hopes to generate $1 million. But the fundraiser will have a dilutive impact on the stock when the preferred shares convert.
Who acquired the preferred shares?
Torchlight Energy Resources Inc. (NASDAQ:TRCH) did not reveal the names of the investors who purchased the convertible preferred shares. But it said that it sold the shares to three institutional investors who happen to have extensive knowledge and expertise in Torchlight’s industry.
What are the funds for?
Torchlight intends to use the funds raised through the sale of securities to finance the drilling and completion of its drilling project in the Permian’s Midland Basin called Hazel Prospect. But it did not say exactly how much the project will consume.
Who’s doing the drilling work?
Torchlight Energy Resources Inc. (NASDAQ: TRCH) plans to engage Maverick Operating to do the drilling of the first well of the Hazel Prospect. After the drilling, Maverick will operate the well once it has been elected to do the operation.
Drilling of the first well is said to have already kicked off and the work is expected to progress faster considering that the location as well as the roads had already been done. It is not clear at this juncture how long it will take to complete the drilling of the well. But Torchlight’s CEO, John Brda, expressed excitement at the fact that the company has commenced drilling on the Hazel Prospect.
Not only is Torchlight Energy Resources Inc (NASDAQ:TRCH) benefiting from the financial injection of the investors in the preferred stock offering, but it also expected to benefit from the investors’ deep expertise in matters oil and gas. Torchlight’s CEO Brda revealed that the investors have a successful track record in the location where the company is doing the drilling – Permian Basin.
Board shakeup at Torchlight Energy Resources Inc. (NASDAQ:TRCH)
The announcement of the securities financing and the commencement of drilling on the Hazel Prospect comes after Torchlight Energy Resources Inc. (NASDAQ: TRCH) recently reorganized its board. Alex Zyngier joined the company’s board as an independent director.