The company will farm-in to a 940-acre block controlled and operated by US-based La Sal Energy.
The block is a direct offset and extension to the prolific Katy field discovered by Exxon in the mid-1960s and is reported to have had 6tcf of gas and many wells are still producing.
Torchlight said it will contribute funds to re-entry and fracture stimulate the Sparks formation, the main producing zone in Katy field.
For this contribution, the company will earn a 40% interest in the block which has one additional re-entry and one possible new well to drill.
The company will also have an option to increase its working interest up to an additional 5% following the results of the re-entry.
