Camber Energy Inc (NYSEAMERICAN: CEI) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced an asset sale that is leading to excitement among investors who are pushing the value of the stock toward the top. Today, we’ll talk about the asset sale, what we’re seeing from CEI as a result, and what we’ll be watching for ahead.
CEI Announces Sale Of Permian Basin Acreage
As mentioned above, Camber Energy is having an incredibly strong day in the market today after the company announced a massive asset sale. In a press release early this morning, the company announced that it has sold some of its Permian Basin acreage position.
In the press release, CEI said that on November 9, 2017, the company and its joint venture partner, NFP Energy LLC., entered into a mutual agreement that would lead to the sale of 2,582 acres in the Permian Basin. The sale will take place at a price of $1,000 per acre. The acreage is part of the “Jackrabbit” project, which targets the San Andres formation in the Permian Basin. In the PR, the company said that it will maintain a 90% working interest in the residual 1,100 acres, which Camber will be putting on the market.
This sale ultimately puts CEI in a better financial position. In fact, with the proceeds from the sale, Camber Energy has repaid the first and second lien holders who financed the original acquisition of the Jackrabbit Project.
Also, the company announced that it has entered into a non-binding letter of intent to acquire 95% net working interest in 3,220 net acres in Yoakum County, Texas. This acreage sits within a 6,000 acre area of mutual interest in the Permian basin. In a statement, Richard Azar II, acting CEO at CEI, had the following to offer:
“Camber decided to sell the JackRabbit, Gaines County acreage, to reposition the Company on what it believes is geologically lower risk, productive acreage with lower lease costs and the potential for significant improvement in drilling, completion and operating costs and efficiences.
The San Andres formation has a very large footprint in the Permian. Camber’s potential new acquisition of the Yoakum County acreage working interest may provide Camber with an opportunity to better position its Permian exploration and production plans and implement its core expertise in using horizontal drilling, dewatering, and depressurizing reservoirs to extract residual hydrocarbons from prime productive Residual Oil Zones (ROZ).”
What We’re Seeing From The Stock As A Result
As investors, we’ve come to expect that when positive news is released, we can expect to see gains in the value of the stock the news is centered around. That’s exactly what we’re seeing today. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (8:32), CEI is trading at $0.22 per share after a gain of $0.02 per share or 9.17% thus far today.
Stop wasting your time! Start finding winning trades in minutes with Trade Ideas!
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CEI. In particular, we’re interested in following the company’s ongoing work in the Permian Basin and we’re excited to learn more about the coming exploration of new acreage. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!