Camber Energy Inc (NYSEAMERICAN: CEI) is having an overwhelmingly strong day in the market today, and for good reason. The interim CEO of the company, Richard Azar II released a letter to shareholders, outlining plans to improve operations and the progress the company has made with regard to these plans. Of course, this led to excitement among shareholders, causing gains in the value of the stock and prompting an alert from our partners at Trade Ideas. Currently (10:37), CEI is trading at $0.16 per share after a gain of $0.01 per share or 7.70% thus far today.
CEI Letter To Shareholders
As mentioned above, Camber Energy is having an overwhelmingly strong time in the market at the moment after the interim CEO of the company, Richard Azar II, released a letter to investors. The beleaguered energy company seems to be making a turn around thanks to key changes made by Azar.
In his letter, Azar made it clear to inform investors of the challenges the company faced when he took the position as the interim CEO. He went on to explain that in order to clean up the issues, he needed to assemble a strong team of veterans that would help in the process, and that he has done so; saying:
“I have assembled an all-star team because turning around any business requires nearly flawless execution by management. This group of individuals has my utmost trust and confidence, and I believe that together we will be able to drive shareholder value.”
In the letter, Azar made it clear that CEI has made progress in leaps and bounds on three key fronts. First and foremost, the company has secured $16 million in financing. These funds were necessary for the company to clean up their balance sheet and turn to focus on growth initiatives as well as undertaking efforts to regain compliance with covenants in the company’s senior credit facility. The company has since worked closely with their bank to cure defaults.
Another key factor in turning he company around is regaining compliance with the NYSE. In his letter Azar said that CEI has submitted a formal plan to the New York Stock Exchange designed to help the company regain compliance by no later than August of 2018. While the company is still awaiting a formal response from the NYSE, they believe that by following their plan, they will be able to regain compliance by May of 2018, giving them a little extra time should things not go as planned.
As we move forward through the letter, it becomes clear that the key for Camber Energy is for the company to continue drilling new wells that could drive strong revenue. Toward the end of the letter, Azar had the following to offer:
“During the first half of 2018, funding permitting, we intend to drill four new wells adjacent to our existing wells in the Hunton formation in Oklahoma. During the second half of 2018, funding permitting, we expect to drill an additional four to five new wells in this same area, and perhaps one well in the Permian in West Texas. In total, we expect to drill between eight and ten new wells in 2018, subject to the availability of sufficient capital. I anticipate these wells, if successful, could collectively generate approximately $1 million in EBITDA per month by the end of 2018. I also believe there are other significant opportunities for the company in Oklahoma, as well as significant opportunity to extract hydrocarbons in the San Andres Formation in the Permian Basin, which we will continue to explore.”
Azar goes on to explain that if all goes as planned, the company could be generating around $2 million per month in EBITDA by the end of next year. He also thanked shareholders for staying by the side of CEI through troubling times.
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What We’ll Be Watching Moving Forward
Moving forward, the CNA Finance team will continue to keep a close eye on CEI. In particular, we’re interested in following the progress of Azar’s plan. If all goes well, the interim CEO may be the key to bringing the company out of the nearly drowning state it is in. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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