Camber Energy Inc (NYSEAMERICAN: CEI) is having a great start to the trading session this morning, and for good reason. The company announced the execution of an asset sale agreement that’s leading to excitement among investors. Today, we’ll talk about:
- The asset sale;
- what we’re seeing from CEI as a result; and
- what we’ll be watching for with regard to the stock ahead.
CEI Heads Up On Asset Sale News
As mentioned above, Camber Energy is having an incredibly strong start to the trading session this morning after the company announced the completion of an asset sale. In a press release issued early this morning, the company announced the execution of an Asset Purchase Agreement with N&B Energy that was dated July 12, 2018. The sale has to do with the company’s planned disposition of a substantial purchase of assets. In exchange, the buyer will assume all CEI senior debt with International Bank of Commerce.
In the release, the company said that the closing of the transaction is subject to customary closing conditions, the final approval of IBC, and approval of the company’s shareholders and other conditions. However, if the transaction is approved, the company will retain assets in Glasscock County and Hutchinson County, Texas. The company also said that it will retain a 12.5% payment and 3% overriding royalty interest in its existing Okfuskee County, Oklahoma asset. Also, CEI will be evaluating additional acquisition opportunities that it believes will further enhance the company’s growth plans.
Also, Camber Energy said that if the transaction does indeed close, it will complete extinguish its existing bank debt. As a result, the company will see a significantly enhanced balance sheet and better cash flow. After all, the debt elimination will get rid of $425,000 in monthly payments. Nonetheless, the company said that it is currently negotiating a forbearance agreement with IBC while it works toward shareholder approval for the transaction. It is expected that the forbearance negotiations will be completed in the next 10 days. In a statement, Louis G. Schott, Interim CEO at CEI, had the following to offer:
This transaction is a major step towards improving the Company’s balance sheet and regaining compliance with the continued listing standards of the NYSE American.
This should also position the Company for growth through acquisition and development opportunities.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news causes moves. In the case of Camber Energy, the news proved to be overwhelmingly positive. After all, if this transaction closes, it will put the company on strong financial foundation, which will help to push toward growth ahead. So, it’s no surprise that excited investors are sending the stock toward the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. At the moment (11:35), CEI is trading at $0.62 per share after a gain of $0.24 per share or 63.90% thus far today.
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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 story surrounding the company’s restructuring as well as whether or not this transaction closes. Nonetheless, we’ll continue to follow the news closely and bring it to you as it breaks!
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