Ocean Rig UDW Inc. (NASDAQ:ORIG)

Ocean Rig UDW Inc. (NASDAQ:ORIG) Staring At $85 Million Backlog

Ocean Rig UDW Inc. (NASDAQ:ORIG)

Ocean Rig UDW Inc. (NASDAQ:ORIG) shares rallied by 8.26% in Monday’s trading session after Lundin Norway invoked a third option for the extension of an existing contract with Leiv Eriksson. The company has since granted Lundin two additional options for drilling new wells in the future. The stock traded higher as investors reacted to reports the new contracts could lead to revenues of up to $85 million.

Lundin Contract Extension

The Lundin contract extension paves way for the rig to be in operation until September pending further extensions. Lundin exercising its seven one-well options could see the rig deployed until the first quarter of 2019. Ocean Rig UDW stands to generate up to $85 million if all optional wells are exercised.

“We are grateful for the support of our major customer in Norway and subject to the successful restructuring look forward to extending this relationship in the long-term,” said, George Economou, Ocean Rig UDW Inc. (NASDAQ:ORIG) CEO.

Ocean Rig UDW Inc. (NASDAQ:ORIG) is an international contractor in the offshore deep-water drilling business. The company provides oilfield services for offshore oil and gas explorations as well as development and production drilling services. Early this year, the company filed for bankruptcy protection under Chapter 15 as part of an effort that seeks to erase up to $3.7 billion in debt.

Bankruptcy Proceedings

Bankruptcy protection came on the heels of the company being hit by cancellations from major oil producing customers. Falling oil prices has made it impossible for companies to pursue deep water projects leaving most of the company’s drilling units idle. The Cayman holdings company expects low oil prices to weigh in on client demand heading into the end of the year.

Immediate court filings indicate that Highland Capital Management will not pursue objections to recognitions of Ocean Rig UDW Inc. (NASDAQ:ORIG)’s Cayman proceedings in U.S Bankruptcy court. The firm which holds 7.5% of senior notes is, however, seeking to impose Chapter 7 or Chapter 11 on Ocean Rig.

The firm also continues to push for an involuntary petition against Ocean Rig UDW Inc. (NASDAQ:ORIG). The company fears that under the current structure it may never get a chance to go after the drilling company for alleged fraudulent conveyance.

The firm in a statement has said it will not take a position on whether the court should recognize debtor’s provisional liquidation and scheme of arrangement under the Cayman Island Companies Law.

Ocean Rig UDW Inc. (NASDAQ:ORIG) has already told the court that the Cayman’s holdings are at its Center of main Interests (COMI) even though it moved there from Marshall Island in Apr.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: Marc has a degree in economics and a MSc. in Finance. Marc worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant.

Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT) Tanks On Public Offering and Revenue Guidance

Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT)

Shares of Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT) traded lower in Friday’s trading session after the company announced a dilutive public offering of its shares. The company also issued revenue guidance and a Pro Forma cash summary for the quarter ended June 30, 2017. The stock plunged 15.46% to end the week at $1.64 a share.

Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT)

Public Offering

Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT) systems is a transportation technology company that provides low emission engine and fuel systems technologies. The company operates in the automotive, Industrial, corporate, and technology fuel sectors. The company serves customers in more than 70 countries by developing and distributing delivering fuel efficiency and environmental benefits.

As part of the public offering, the company is offering 16.7 million shares at a price of $1.50 a share. Underwriters have been granted an option to purchase an additional 2.5 million shares. Gross proceeds are expected to be around $25 million before deduction of discounts and expenses.

Some directors and executive officers have also made requests to purchase the company’s common shares, pursuant to a non-brokered private placement. The private offering does not form part of the announced public offering but expected to take place concurrently. However, shares offered will be subject to a statutory holding period.

The offering should close on July 19, 2017, subject to fulfillment of customary closing conditions. Oppenheimer & Co is acting as the sole book running manager. In addition to the public offering, Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT) has announced it expects revenues between $57 million and $59 million for the quarter ended June 30, 2017. The company also expects to be cash positive in early 2018.

Board Appointment

Separately, Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT) has confirmed the appointment of Daniel M. Hancock into the board of directors effective July 7, 2017. Hancock was previously a member of the advisory board. He joins the board of directors with more than 43 years of service in General Motors Company (NYSE:GM) powertrain engineering.

“Dan’s knowledge and extensive experience in the automotive sector, combined with his familiarity with Westport Fuel Systems as a former Advisory Board member, will provide strategic acumen to further strengthen our Board during this transformative time in the Company,” said Brenda Eprile, Westport Fuel Systems Inc. (USA) (NASDAQ:WPRT) Chairman of the Board.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $WPRT and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Zion Oil & Gas, Inc. (NASDAQ:ZN)

Zion Oil & Gas, Inc. (NASDAQ:ZN) Rallies

Zion Oil & Gas, Inc. (NASDAQ:ZN)

Zion Oil & Gas, Inc. (NASDAQ:ZN) stock was up by 9.3% after the company issued an operational update at its Megiddo-Jezreel well in Israel. Since last month’s update, the company says it has reached a depth of 3,280 feet in a well proposed for a 15,000 foot depth.

Megiddo-Jezreel Operation Update

The ongoing drill works are expected to go through at least four different geologic strata, below which Zion Oil & Gas, Inc. (NASDAQ:ZN) remain confident of hitting oil and gas deposits. To be able to drill the 3,280 ft. the company has had to navigate through a string of obstacles. Chief executive officer, Victor G Carrillo, says they remain confident of oil and gas commercial production this year.

“We are extremely proud of the work that has been done and looks forward to a successful well. We are thankful to our shareholders and supporters for their faithfulness to stand with us during these last few years,” said Chief Operating Officer, Dustin Guinn

Zion Oil & Gas, Inc. (NASDAQ:ZN) has contracted the likes of Halliburton Company (NYSE:HAL), Baker Hughes a Ge Company LLC (NYSE:BHI), and Weatherford International Plc. (NYSE:WFT) to provide world-class drilling services. The rig has a 3,000HP capacity draw work, capable of drilling up to 7,000 meters.

Subject to adequate cash and positive exploratory results, Zion Oil & Gas, Inc. (NASDAQ:ZN) plans to drill multiple wells as various geologic targets can be accessed using different directional trajectories. A 2015 study conducted concluded that the Levante basin could have as much as 6.6 billion barrels of oil. The Megiddo-Jezreel License area is within the Levante area and well positioned to have geologic ingredients of an active petroleum system.

The oil and gas exploration company holds an exploration license for approximately 99,000 acres in Megiddo-Jezreel area. The company has already drilled four exploration wells.

DSPP Program Update

Separately, Zion Oil & Gas, Inc. (NASDAQ:ZN) confirmed it will not extend the $250 unit program under its Dividend Reinvestment and Common Stock Purchase Plan DSPP beyond July 12, 2017. The program is designed to provide investors a simple way of investing in Zion stock directly from the company. However, the program is not intended to provide short-term profits through rapid turnover of shares acquired at a discount.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $ZN and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

Rentech, Inc. (NASDAQ:RTK)

No Explanation for Rise of Rentech, Inc. (NASDAQ:RTK)

Rentech, Inc. (NASDAQ:RTK)

Rentech, Inc. (NASDAQ:RTK) shares are up over 20% in early trading, and on heavy volumes, despite a lack of any public news that could account for such a strong move. RTK shares closed yesterday at $0.55 and opened at the same price. However the shares quickly took off and hit their inter-day high, as of 11:15 AM EST, within 30 minutes. Volumes followed the same trajectory. Rentech, Inc. (NASDAQ:RTK) has a 30-day, daily volume figure of just under 250,000 but by 11:15 AM EST over 5.7 million shares have traded hands.

Rentech, Inc. (NASDAQ:RTK)
15 minute bar graph $RTK July 6

Rentech, Inc. (NASDAQ:RTK) is a Canadian-based company that owns and operates wood fiber and wood pellet processing businesses. Rentechs’ New England subsidiary produces bagged wood pellets for the U.S. heating market. The President, CEO, and Board Member of Rentech, Inc. (NASDAQ:RTK) is Mr. Keith Forman. Mr. Forman has a background in master limited partnerships (MLPs). He has worked with MLPs in a variety of roles including as a banker, a senior executive and a director since the inception of MLPs in the 1980s. He previously served as chief financial officer of Crestwood Midstream Partners L.P., a private investment partnership focused on making equity investments in the midstream energy market.

Recently insiders have increased their aggregate stock position in Rentech, Inc. (NASDAQ:RTK) by over 250% while institutional investors have been divesting themselves of the stock. Another metric that stands out is the amount of cash per share of RTK. Latest reports put that figure at $0.98 which is about 1/3 more than what the shares are trading for. While Rentech, Inc. (NASDAQ:RTK) is down over 77% YTD, the shares are up over 25% for the past month. That upward move has given RTK shares a Relative Strength Index reading of over 79 which most observers believe is firmly entering “overbought” territory even though Rentech, Inc. (NASDAQ:RTK) is well off its 52-week high of $3.97. Of concern is the company’s inability to turn revenues into profits. In 2013, RTK shareholders had a per share profit of $0.22. However the next year shareholders experienced a loss of (-$1.85) and that per share loss expanded in 2016 to (-$6.18)

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $RTK and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Digital Power Corporation (NYSEMKT:DPW)

Digital Power Corporation (NYSEMKT:DPW) Explodes On $65 Million Customer Order Backlog

Digital Power Corporation (NYSEMKT:DPW)

Digital Power Corporation (NYSEMKT:DPW) was up by 49.81% in Friday’s trading session as investors reacted to news that the company had regained NYSE compliance. The rally also came after an announcement that the company’s customer order backlog had soared to over $65 million, an increase of $8 Million from a May 17, 2017, forecast.

Order Backlog Growth

Digital Power Corporation (NYSEMKT:DPW) bills itself as a designer, developer, and manufacturer of power system solutions. The company targets customers in the medical, military, telecom, and industrial markets with a wide range of power system solutions.

The growth of Digital Power’s customer order backlog supports the company’s growth strategy that focuses on both acquisitions and organic growth. The company attributes the robust growth to new and current customers as well as the consolidation of financial reporting to include Microphase Corporation.

“We continue to see strength in our custom power supply business as our order book grows. With the purchase of Microphase Corporation, we will also see strong cost savings which will increase our gross and net margins,” said CEO, Amos Kohn.

In the first quarter, Digital Power Corporation (NYSEMKT:DPW) received a 3-year $50 million purchase order from its customer MTIX Ltd headquartered in Huddersfield U.K. The order is for the manufacturing, installation, and servicing of a textile treatment system that utilizes MTIX’s proprietary system.

Shareholder Value on MTIX’s System

Digital Power Corporation (NYSEMKT:DPW) works on the restyle treatment system are set to begin and a $1.5 million deposit has been made. The company expects the remaining payments to be made in the coming weeks as production ramps up.

Digital Power Corporation (NYSEMKT:DPW) expects production of the MTIX’s systems to positively impact gross and net profitability heading into the year end.

“The added value to shareholders is yet to be understood. Over the coming years, this contract and relationship we believe will provide massive value to our shareholders,” said Mr. Kohn.

Separately, Digital Power Corporation (NYSEMKT:DPW) has regained compliance with the NYSE listing standards on filling of an 8-k report with the Securities and Exchange Commission. The report indicates that the company’s stockholder’s equity was about $6,409,000 on a pro forma basis as of June 19, 2017.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $DPW and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR)

SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR) Explodes On RP Capital Investment In Nemegosenda Project

SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR)

SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR) stock rallied by 125% to end the day at $0.009 a share, after the mining company announced it reached an agreement with RP Capital for the development of Nemegosenda Specialty Metal project. The massive rally on huge volume came as a surprise given that the stock has been dead silent in recent trading sessions.

Niobium Prospects

SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR) is a mining company with properties in Northern Ontario Canada. Its primary project is the Nemegosenda niobium project that consists of 9,000 mining claims. The company is developing the project as part of an effort that seeks to address the growing demand for Niobium in addition to pursuing shareholder value.

Industry sources indicate that demand for Niobium will continue to grow. Given the fact that there are only 3 significant producers of the chemical component, SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR) has an opportunity to generate significant value from the mine.

RP Capital group is an international investment firm based in Montreal. The firm is reportedly well positioned to provide the junior mining company with the much-needed expertise and capital required for the project’s success.

Partnership Terms

Under the terms of the agreement, RP Capital Group is to invest $C250,000 into the Nemegosenda Specialty project. The investment firm is also to provide an additional $C250,000 once certain project milestones are met. In addition to capital investments, the firm is also to help in executive recruitment and legal matters – amongst other business services.

RP Capital’s investment will be in the form of a Secured Convertible Loan that will convert into a 35% stake in the Nemegosenda project.

“The addition of RP Capital Group to the Nemegosenda project is the game changing event we have been working to secure for the company. The project will now have availability to the business and mining expertise as well as the capital necessary to rapidly move the project forward,” said Dan Byrness, SARISSA RESOURCES COM STK USD0.001 (OTCMKTS:SRSR) President.

The signing of the agreement with RB Capital follows the termination of a previously announced agreement for the sale of the Nemegosenda specialty rare earth project. The company has since reiterated plans to expedite the development of the project in partnership with its subsidiary Nio-Star.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $SRSR and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Sunrun Inc (NASDAQ:RUN)

Sunrun Inc (NASDAQ:RUN) Nearly Doubles Addressable Market

Sunrun Inc (NASDAQ:RUN) Nearly Doubles Addressable Market

Sunrun Inc (NASDAQ:RUN) has announced that it has doubled its total addressable market (TAM) in a period of just four months. Sunrun is the largest dedicated residential solar, storage and energy services company in the United States.

Sunrun Inc (NASDAQ:RUN)
NASDAQ:RUN Daily Price graph June 29

Sunrun Inc (NASDAQ:RUN) recently expanded its reach to seven new solar markets in Florida, Washington, D.C, Wisconsin, Vermont, Texas, Rhode Island and New Mexico. In addition, the company expanded operations in Pennsylvania and re-entered the state of Nevada after policymakers passed legislation to reinstate solar net metering.

The expansions brings Sunrun Inc (NASDAQ:RUN) operations to 22 states and Washington, D.C., and offers another proof point of the inevitability of solar. It shows that tripping solar installation costs, combined with strong consumer demand for energy choice, are increasing homeowner’s access to solar power.

Recent legislative wins have proved that rooftop solar is a bipartisan issue. Lawmakers and voters across the political spectrum seem to have recognized the benefits solar energy provides by reducing energy costs for all homeowners and modernizing the energy grid.

According to Sunrun Inc (NASDAQ:RUN) CEO, Lynn Jurich, expanding to these markets will give homeowners the opportunity to power their homes directly from their rooftops, making energy affordable, and the electric grid cleaner and more reliable. He added that Sunrun is providing these services and creating jobs.

Currently, Sunrun Inc (NASDAQ:RUN) has operations in seven new states which, according to recent analysis, adds around 12 million homes that would be good candidates for solar in the states in which Sunrun operates. These new markets nearly double the company’s TAM to over 26 million homes.

The increase in new markets this year will set a foundation for 2018 and beyond, as the company plans to continue expanding into new markets. In addition, the company plans to offer its most recent innovation, Sunrun BrightBox™ solar power and energy storage service, to additional states.

Sunrun Inc (NASDAQ:RUN) shares jumped in trading Tuesday after being upgraded by an analyst. By 2:55 p.m. EDT shares were still up 10.5% on the day. Goldman Sachs‘, Brian Lee, upgraded Sunrun to a buy rating and put a $10 price target on the stock. The price target implies a 71% gain from Monday’s closing price. Some of the gain was as a result of speculation that merger and acquisition activity could pick up in the solar space.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $RUN and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.

 

Gold Corp (NASDAQ:PGLC)

Pershing Gold Corp (NASDAQ:PGLC) Eyes Positive Cash Flow

Gold Corp (NASDAQ:PGLC)

Pershing Gold Corp (NASDAQ:PGLC) has reported positive Preliminary Feasibility results for its Relief Canyon Project in Pershing County Nevada. According to chief executive officer Stephen Alfers, the positive results indicate strong opportunities for growth on the deployment of contract mining as opposed to self-mining.

Feasibility Study Results

The feasibility study indicates that the mine could have up to 634,000 ounces of gold and 1.6 million ounces of silver reserves. Strong Measured and Indicated (M+1) resources indicate potential reserve growth according to the executive. The study also suggests a mining plan to produce up to 90k oz/year over six years. Estimated cash cost per ounce should be $770 and all-in sustaining costs of $802 per oz.

Pershing Gold Corp (NASDAQ:PGLC)’s board of directors is to deliberate on when to begin production at the mine based on detailed economics and engineering needs. Pershing Gold has already secured all the permits needed to start mining.

“We’re considering right now the program for the pre-production work plans that will lead up to and through the construction decision itself and then the start-up. I won’t speak for my board of directors until they’ve had every opportunity to make the decisions on the timing,” said MR. Alfers.

Capital Expenditure

Relief Canyon is Pershing Gold Corp (NASDAQ:PGLC)’s primary asset, sitting on 25,000 acres of landholdings in Pershing County. The size of the landholdings provides the company an opportunity to expand the size of the minefield in pursuit of new mine deposits. The fact that a good amount of infrastructure is already in place from mining operations in 1980’s and 1990’s should allow the company to enjoy operation efficiencies.

Pushing Relief Canyon to produce positive cash flow is the company’s core objective. The company expects the project to generate up to $20M in NPV on every $50 increase in gold prices. There are also plans to pursue satellite opportunities and new discoveries in the 40 square mile land position.

Pershing Gold Corp (NASDAQ:PGLC) is projecting initial capital expenditure of about $23.6 million. A good chunk of the amount is to be used on conveyor systems, a crusher, grade and construction of pads, and waste dump facilities. The company plans to finance initial operations with cash in hand, as it continues to explore other financing alternatives.

Pershing Gold Corp (NASDAQ:PGLC) stock was down by 3.42% in Tuesday’s trading session to end the day at $2.82 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $PGLC and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Marc has a Bachelor’s degree in economics and a MSc. in Finance. Over his 20-year career, Marc has worked for global investment firms in Europe and the United States as an analyst, fund manager, and consultant. Currently Marc lives on the Texas coast with his family and can frequently be found fishing with his two boys.

EnSync Inc (NYSEMKT:ESNC)

EnSync Inc (NYSEMKT:ESNC) Contracts Power Purchase Agreement

EnSync Inc (NYSEMKT:ESNC)

EnSync Inc (NYSEMKT:ESNC) has announced entering into a 20-year Power Purchase Agreement (PPA) with Easter Seals Hawaii in a bid to help offset the company’s local electricity prices. EnSync Inc is a major provider of the highly innovative internet of energy (IOE) control platforms and distributed energy resource (DER) systems for industrial, commercial, and multi-tenant building markets

The agreement will entail installation of ground-mounted 122-kilowatt solar panel which will be located at the non-profit’s power facility. Easter Seals Hawaii is a nonprofit that specializes in empowering adults and children with disabilities by offering services like rehabilitation, job training, facilities-based care, home and community-based services – among others. Easter Seals has been serving Hawaii for the last 70 years and annually records over 600,000 hours of services to families and individuals living in the state.

In a statement, EnSync Inc (NYSEMKT:ESNC) CEO and President, Brad Hansen, said the Hawaiian electricity PPA market has proved to be a profitable avenue for EnSync Energy to spread its presence and demonstrate its business model.

Easter Seals Hawaii Chief Executive Officer, Ron Brandvoldon, said non-profit organizations are always trying to lower operating costs. He added that their services are always in high demand which calls for the need to manage their operating cost so as to be able to serve as many people as possible. Easter Seals Hawaii board chairman Michael Hulser said they are pleased to have the energy community help the organization remain sustainable while at the same time cutting on its operating costs. The project between Easter Seals Hawaii and EnSync Inc (NYSEMKT:ESNC) is at an advanced stage of construction and development and is scheduled for completion by the end of this year. At the moment, EnSync Energy has a total of 18 running projects in Hawaii. Some other projects are still under construction or have been contracted.

During the Thursday session, EnSync Inc (NYSEMKT:ESNC) reported a -37.03% or -$0.185 drop to trade at $0.315

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $ESNC and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

Cobalt International Energy, Inc. (NYSE:CIE)

Cobalt International Energy, Inc. (NYSE:CIE) Reverse Stock Split

Cobalt International Energy, Inc. (NYSE:CIE)

Cobalt International Energy, Inc. (NYSE:CIE) has carried out a 1:5 reverse stock split as part of an effort that seeks to bolster the stock’s share price. Shareholders had initially proposed a 5-for-15 reverse stock split.

NYSE Delisting Notice

Reverse stock splits sometimes undermine the perceived value of a stock and drive share price lower. During the recent earnings call Cobalt International Energy, Inc. (NYSE:CIE) CEO, Tum Cutt, reiterated his concern about the impact of the proposed reverse stock split.

“Obviously, we prefer to kind of demonstrate that we actually have the value in there for our shareholder. For our shares just to trade higher than they are today,” said Mr. Cutt.

The reverse stock split comes on the heels of the New York Stock Exchange issuing a warning about the company’s dwindling stock price. The stock’s drop below the $1 a share mark prompted a delisting notice from the exchange. However, the stock has bounced back even though it continues to trade at multi-year lows.

Financial Woes

Crude prices doping below the $50 a barrel mark continues to plunge Cobalt International sentiments among investors. A major point of concern is that a further drop in oil prices will make it hard for the company to generate significant returns from its development projects.

Cobalt International Energy, Inc. (NYSE:CIE) financial woes stem from the fact that it is spending too much money on development projects than it is generating from existing operations. The company has enough cash to last through mid-2018, after which it could find it hard to meet its financial obligations. The company needs crude prices to bounce back from current levels if efforts on working projects are to pay off and avoid a worse fate.

Reducing debt load is one of Cobalt International Energy, Inc. (NYSE:CIE) objectives as it continues to explore ways of staying afloat. Over the past six months, the energy company has trimmed its debt load by $339.2 million. Regulatory filings indicate that the company did issue $32.14 million of 7.750% second lien 2023 senior secured notes, in exchange of $60.932 million in 2024 convertible senior notes.

Cobalt International Energy, Inc. (NYSE:CIE) stock was down by 12.12% in Wednesday’s trading session to end the day at $2.61 a share.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

Don’t miss out! Stay informed on $CIE and receive breaking news on other hot stocks by signing up for our free newsletter!

About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading. Steve keeps his head in the game by looking for, and writing about, small companies that often get overlooked by the big investment firms.