Victory Energy Corp. (OTCQB: VYEY)
is an independent, growth-oriented oil and natural gas exploration and
production company focused on the acquisition and development of active oil and
natural gas properties throughout Texas. The company’s current portfolio of
assets includes interests in various proven formations – including the
Spraberry, Wolfcamp, Wolfberry, Mississippian, Cline and Fusselman formations.
Utilizing a low-risk vertical well development strategy, Victory Energy aims to
follow a predictable and proven business model focused on the acquisition of
properties in well-known basins –populated by top-tier exploration and
production firms – that are likely to provide return of investment capital in
two years or less.
As the price of crude oil has
tumbled over the past year to its lowest point in more than a decade, Victory
Energy has leveraged operations and investment capital from long-term partner
Navitus Energy Group in order to explore growth opportunities presented by
punitive commodity pricing environments. While most analysts predict these
historic headwinds to persist throughout the remainder of 2016, Kenny Hill,
chief executive officer of Victory Energy, stated that current market
conditions, coupled with a proposed $75 million credit facility from boutique
investment banking firm MLV & Co. LLC, should present tremendous
opportunities for the company to scale in the coming months.
“We have worked diligently with
our investment banker to review several acquisition targets, holding
significant proved producing reserves, limited mandatory development risk and
limited lease expiration exposure,” Hill stated in a news release in October
2015. “We are actively working with the sellers to reach agreeable terms and we
remain in position to act swiftly and to act in size as additional
opportunities with similar low-risk profiles present themselves.”
The company reinforced this
hypothesis in November when it entered into a Letter of Intent to acquire 181
net barrels of oil equivalent per day (BOEPD). Victory Energy expects the
acquisition to result in roughly 80 percent working interest in three producing
wells, as well as about 40 percent working interest in 1,370 net acres that are
currently held by production. The company intends to use the significant
increase in cash flow resulting from this acquisition to support its continued
pursuit of accretive acquisitions made available by the current commodity price
environment. The consummation of this acquisition is subject to the completion
of due diligence review and approval from certain third parties.
“With a successful completion of
this transaction, Victory would grow daily consolidated production from 50 to
~230 BOEPD, a substantial growth which we feel comes at a very favorable
value,” Hill continued. “This transaction marks the first of several opportunities
that we expect to pursue in the coming year.”
The current commodity price cycle
is placing additional pressure on companies in the oil and gas space to sell
assets in order to offset revenues lost to low oil prices. This pressure
results in a promising opportunity for well-capitalized players to find
opportunities to rapidly invest and grow in the oil and gas industry.
Benefitting from capital accessible through its partnership with Navitus Energy
Group and an acquisition-based growth strategy that’s already being
implemented, Victory Energy could be primed to record strong results in
upcoming quarters.
For more information, visit www.vyey.com
About QualityStocks
QualityStocks is committed to connecting subscribers with
companies that have huge potential to succeed in the short and long-term
future. We offer several ways for investors to find, evaluate, and learn more
about investing in these companies.
The Quality Stocks Daily Blog http://blog.qualitystocks.net
The Quality Stocks Daily Videos http://videocharts.qualitystocks.net
The Quality Stocks “Ones to Watch” http://gotstocks.qualitystocks.net
Please see disclaimer on the QualityStocks website: http://disclaimer.qualitystocks.net
No comments:
Post a Comment