Camber Energy Inc (NYSEAMERICAN: CEI) is having yet another strong start to the trading session this morning, following up on the gains that we saw on the stock on Friday. Ultimately, the gains have to do with a memorandum of understanding with regard to the purchase of assets. Today, we’ll talk about:
- The news;
- what we’re seeing from CEI as a result; and
- what we’ll be watching for with regard to the stock ahead.
CEI Continues Upward On Memorandum Of Understanding
As mentioned above, Camber Energy is having a strong start to the trading session this morning, folling up on the strong gains that we saw on the stock Friday. The gains are the result of news released Friday with regard to a memorandum of understanding.
In a press release, CEI said that it has entered into a non-binding MOU with regard to the acquisition of assets in Kansas. Should the transaction close, the purchase price on the assets will be $4 million in equity. Of course, the closing of the transaction is subject to negotiation of final terms, customary closing conditions, and other conditions. Nonetheless, it is expected that the transaction will close this month.
Should the transaction close, it will ad around 30,000 net leashold acres. These acres include 181 non-producing well bores as well as existing production and required infrastructure and necessary equipment to support future production.
In a statement, Louis G. Schott, Interim CEO at CEI, had the following to offer:
We are currently performing due diligence on this opportunity. In the event we are satisfied with our due diligence and close the transaction, this acquisition will provide significant opportunities for the Company to increase its production, cash flows and reserve base. We plan to begin workovers as quickly as possible following a closing with the goal of having production from some of the non-producing well bores restored within a month of closing.
This is all part of Camber’s plan to add similar low risk acquisitions which can provide an inventory of opportunities to grow the Company through increases in cash flow and reserve base.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of CEI, the news released on Friday was overwhelmingly positive. After all, should this transaction close, the company will not need to come out of pocket with any cash as it is an all-equity transaction. Furthermore, it has the potential to greatly expand the company’s presence in the Kansas area as well as expand the company’s production. So, it’s not surprising to see that excited investors continue to push the stock up. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:15), CEI is trading at $0.18 per share after a gain of $0.005 per share or 2.94% 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 story surrounding the potential asset acquisition as it would be a highly accretive transaction if it closed. 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!