Torchlight Energy Resources, Inc. has entered into a definitive agreement with Founders Oil and Gas, LLC of Midland, TX for the development of Torchlight's Orogrande Project. The terms of the agreement include a $5 million reimbursement to Torchlight for initial project costs incurred and an additional $45 million in developmental capital to be deployed by Founders over the next two years in exchange for 50% Working Interest in the Project.
Upon reaching the total agreed expenditure, Torchlight and Founders plan to fund future development costs equally on a 'heads up' AFE basis. Upon closing, Torchlight received a $1 million cash payment. Founders will be the operator of record beginning with the fracing and completion of the previously drilled Rich A-11 well.