Camber Energy Inc (NYSEAMERICAN: CEI) is having a great start to the trading session in the pre-market hours this morning, and for good reason. The company announced news with regard to an asset acquisition, exciting investors and sending the stock screaming for the top. Today, we’ll talk about:
- The asset acquisition news;
- what we’re seeing from CEI stock as a result; and
- what we’ll be watching for ahead.
CEI Announces Asset Acquisition News
As mentioned above, Camber Energy is having a great start to the trading session this morning after the company announced news with regard to an asset acquisition. In a press release issued early this morning, the company announced the execution of a non-binding memorandum of understanding (MOU). The MOU surrounds the contemplated acquisition of assets in Greely and Hamilton Counties, Kansas. The assets the company is considered purchasing come with a purchase price of $4 million in equity.
In the release, CEI said that the closing of the transaction is subject to customary closing conditions, negotiation of final transaction documents and transaction terms, as well as other conditions. It is expected that the closing of the transaction will take place in December of this year. Nonetheless, due to the conditions set forth above, closing may not be timely.
Should the transaction close, the company will acquire working interests including about 30,000 net leasehold acres. These assets also include 181 non-producing well bores. However, the company said that the acquisition will include some existing production, but will require infrastructure and equipment necessary to support future hydrocarbon 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 Camber Energy, the news proved to be overwhelmingly positive. After all, if the company does close this transaction, it will bring key assets to the table that could lead to strong growth. So, it’s not surprising to see that excited investors are pushing the stock up in the market. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:50), CEI is trading at $0.17 per share after a gain of $0.0098 per share or 6.00% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on CEI. In particular, we’re interested in following the story surrounding the company’s work with regard to the asset acquisition. After all, if it takes place, it will be a highly accretive transaction. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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