Prior to 2017, few investors thought that Viking Investments (VKIN) would have the fortitude to become a potential break out star in oil and gas exploration in the Mid-continent territory. But,so far in 2017, VKIN is performing quite well and has been true to their revitalization plan to enhance shareholder and company value.
Since the beginning of the year, VKIN has remained focused on streamlining its capital structure, securing optimal sources for financing, and has been active in building relationships through its wholly owned subsidiary, Mid-Con Petroleum, LLC.
Earlier in the week, VKIN announced further expansion into the Mid-continent corridor, taking advantage of its ownership in over 6000 acres of land, and leveraging toward the potential to share in operating revenue from the over 1000 existing wells operated by S&B Operating, LLC. and Kansas Resource Development Company (KRDC).
VKIN To Launch Enhancement Initiative
According to their press release on Thursday, VKIN is once again on the move, assembling the pieces to advance a productive 2017. With assistance from S&B Operating, Mid-Con has completed a performance review of all of its existing producing leases in the state of Kansas. This review has led Mid-Con to identify relatively low cost methods to improve production, including stimulating inactive or inefficient water injectors, a necessary measure to initiate, enhance, and generate consistent product flow.
The initial phase of the enhancement project is anticipated to focus upon three of Mid-Con’s leases, L. Wilson, Wilson A, and Terbrock. It is expected that ten injectors will be stimulated in the project with production levels expected to be increased between 20-25% after the initiative is completed. The project is expected to commence on or about February 20, 2017, and will be led by KRDC’s management team, who specialize in formulating and operating water flood enhanced oil recovery programs.
VKIN owns approximately 6000 acres of land in Kansas and Missouri, with additional ownership of oil and gas leases in Alberta, Kansas and Missouri.
While the company has completed a couple of acquisitions in 2016, management has indicated that much of the past twelve months has been more about putting key building blocks in place to nurture a seamless and efficient growth model. VKIN has established credit facilities from lenders familiar with the energy sector, established relationships with investment banks, and has sourced funding groups who are interested in assisting VKIN on future deals.
Management is committed to simplifying the entire acquisition process, by identifying under-valued, revenue generating properties and turning them into efficient and profitable revenue generating machines. The company expects to engage a methodical approach to market, buying only projects that are capable of adding appreciable value to the company and do not require exorbitant amounts of capital to bring on-line.
For investors, seeing VKIN regain their footing is a welcome sight. It may be wise to keep an eye on them to see if the robust plans staged for 2017 continue to play out, at which point entertaining an investment thesis in VKIN may become warranted. In the meantime, as with any micro cap name, stay focused to fundamentals and remain appraised of any additional news through CNA Finance, your source for VKIN breaking news.
Never Miss The News Again
Do you want real-time, actionable news delivered to your inbox? Join the CNA Finance mailing list below!