Camber Energy Inc.(NYSE: CEI) is moving as oil prices push higher. With US crude oil hitting $108, energy stocks like CEI are gaining investors’ undivided attention. Currently, CEI provides custom energy solutions to commercial and industrial clients but has interests in oil and natural gas assets across the US. Currently, CEI stock has seen renewed momentum as the company is rolling out its missing financial reports to regain compliance with NYSE. With the company expected to continue releasing the missing financials until May 20, CEI stock could be one to watch next week.
CEI Stock News
*Written October 1st
CEI shocked investors with a surprising announcement in August which helped launch CEI stock from $0.48 per share to $4.32. In the announcement CEI shared that it has signed through its subsidiary an exclusive intellectual property license agreement with ESG Clean Energy. This agreement has brought notable gains to CEI’s shareholders because it gives CEI the rights to a system which captures 100% of the CO2 generated by internal combustion engines.
ESG Clean Energy
If the system lives up to expectations, then this potentially groundbreaking technology could place CEI at the top of the carbon capture game. While other systems may reduce a part of the CO2 generated, CEI’s intellectual property could shape the industry as a whole.
According to ESG, the Clean Energy System generates clean electricity directly from internal combustion engines. This process uses “waste heat to capture 100% of the carbon dioxide emitted from car engines without loss of efficiency”. This is definitely an incredible asset for CEI and its shareholders will likely see returns on their investment as the company utilizes its intellectual property in new ways. A lucrative byproduct of this system is the distilled or deionized water, ammonia, ethanol, and methanol which is created as a result. These are all valuable commodities which can be sold for additional profits.
CEI’s technology is especially appealing because it can be applied to a range of industries such as plastics recycling, nitrogen removal, microgrids, data centers, and crypto mining operations. However new applications for the system are sure to emerge which could present additional revenue streams for CEI.
It appears that the system will allow operations to run conventional gasoline or natural gas engines while reducing the operation’s carbon footprint to zero percent. Not only is this good for the environment, but given increasing regulatory pressure many companies could benefit from the services CEI now offers.
CEI is well aware of this edge as its CEO James Doris shared, “this transaction positions us as an industry leader in terms of being able to assist with the power generation needs of commercial and industrial organizations while at the same time helping them reduce their carbon footprint to satisfy regulatory requirements”
However, momentum has also been a major factor of CEI stock’s success. The FinTwit and WallStreetBets community took CEI to the next level but Atlas trading group was particularly influential in CEI stock’s runup. Together, this combined momentum was enough to push CEI stock over the top. But, given CEI’s incredible 822% increase over the month of September, CEI has now become one of the most heavily shorted stocks on the market. In just two weeks, raw short interest in CEI stock jumped by a whopping 298% – from 6 million shares at the end of August to 24.4 million by mid-September.
Fraudulent Draft Prospectus
Whether this creates a short squeeze remains to be seen. But shorts are under significant pressure because CEI stock momentum did not die down as early as expected. In an undoubtedly illegal ploy- a fraudulent ‘draft prospectus’ from CEI was released and shared widely across social media. Discussing an offering of up to $150 million worth of shares at $1.80 a share, the fake press release triggered a massive selling frenzy among investors on September 29th. The perpetrators even took it a step further by creating fake FinTwit influencer accounts telling followers they were dumping their shares.
CEI has already announced that this offering is fake and news of the deception is being shared between investors. This attempt to flush the stock was designed for the benefit of major shorts who appear to be becoming desperate.
*Updated March 7th
$25 Million Loan
CEI announced an agreement to cut down 46% of its outstanding pref. stock with a loan of $25 million from an institutional investors. The loan will reach its maturity in 2027 and is convertible into common shares at $1.50 per share. At the same time, CEI closed a deal with an institutional investor for 10,544 shares of newly designated convertible preferred stock at a purchase price of $100 million.
The sum will be paid with $5 million in cash and four Promissory Notes for $23.75 million payable on March 31, 2022, June 30, 2022, September 30, 2022 and December 31, 2022. This loan will provide some much needed liquidity and CEI’s CEO – James Doris – shared that the company “can confidently pursue new acquisitions and other important value-added initiatives throughout 2022,” with this funding. He added that CEI has the “option of redeeming all or a portion of the shares and not accept the funds if we do not believe it is in the best interest of the company to do so at the particular time.”
Unfortunately, CEI faced other difficulties including a number of class action lawsuits from law firms alleging that CEI made misleading statements regarding its connection with Viking Energy Group, Inc. and the financial strain that investing in it would put on the company’s financial stability. Because CEI has routinely failed to update its filings, miscalculations could have been made regarding the company’s SS and financial state as well.
Recently, CEI received a letter from the NYSE detailing its incompliance with the exchange’s listing standards after the company requested an extension to the deadline for filing its outstanding financial reports. It appears, CEI is missing several quarterly reports for 2021 as well as an annual report for 2020. While this notification bears no immediate impact, CEI has until April 1st to cure the delinquency and can request a maximum extension up to May 20th.
However, in the heat of rising oil prices and increasing energy demand, it looks like CEI could be on a rebound. After its subsidiary – Viking Energy Group Inc. – acquired a 51% interest in two entities which have intellectual property rights to fully developed, patent pending electric transmission and distribution open conductor detection systems the stock began to see more interest. But by February 23rd, CEI stock increased 83% due to the increasing popularity of energy plays.
*Updated April 18th
Ban on Russian Oil
With EU officials discussing a potential ban on Russian oil, oil prices surged on this news reaching nearly $110 per barrel which led oil stocks to soar – with CEI stock increasing 57% as a result. Having previously banned Russian coal – with a 4 month transition period following the decision – the EU could follow a similar pattern by banning Russian oil while looking for alternative suppliers. Negotiations are expected to occur after the final round of the French elections on April 24th which leaves room for oil and energy stocks to run on speculation in anticipation.
Preferred Share Redemption
On top of this, CEI made headlines after redeeming 2,636 series G preferred shares issued as part of a $100 million financing commitment from an institutional investor. In this way, CEI was able to cancel a $23.7 million promissory note associated with these shares. At the same time, CEI reduced its series C preferred shares by 59% since last December through redemptions and conversions. Although CEI needs these funds to finance its operations, repaying its debt could be a strategic long-term move for the company.
However, many investors have been anticipating CEI’s annual report and the company’s failure to file its financials with the SEC during the required period was a disappointment for its shareholders. To become compliant with the SEC and NYSE, CEI requested more time to file these missing reports and will have until May 20th to comply.
However, CEI’s CEO assured investors that the company will release its 2021 report in addition to the missing filings by April 22nd. With anticipation brewing for this annual report, many investors are bullish CEI stock could run if it delivers a solid report to investors.
Looking to regain compliance with the NYSE, CEI began releasing its late financials with an aim to release all missing filings by May 20th. The company succeeded in its mission which means that more institutions can start investing in the company and with greater transparency from the company, CEI could attract more shareholders and investments from other parties.
The company mentioned in its annual report ending December 2021, that according to a redemption agreement between CEI and the prior owners of Lineal, it had entered into a new unsecured promissory note for the amount of $1,539,719 with Lineal. Following other transactions between the two parties, Lineal notified CEI that due to the impact of COVID-19 on its operations it currently has insufficient liquidity to make scheduled interest payments due under the notes. On this note, CEI shared that “Lineal owes us a substantial amount of money which may not be timely repaid, if at all.”
CEI also noted as a risk factor that it currently has outstanding indebtedness and it may incur additional indebtedness which could reduce its financial flexibility, increase interest expense and adversely impact its operations in the future.
Regarding its oil and gas reserves, the company shared that as of the end of 2020, the company had working interests which were producing an average of approximately 43.7 net barrels of oil equivalent per day from 18 active well bores. This means that its production sales totaled 7,994 Barrels of Oil Equivalent for this nine month period. By the end of 2021, CEI’s total estimated proved producing reserves were approximately 73,800 Barrels of Oil Equivalent, of which 48,400 Bbls were crude oil and natural gas liquids reserves. Meanwhile, 152,400 Mcf were natural gas reserves.
In this way, the company produced 4,242 barrels of oil, 13 thousand Mcf of natural gas, and 131 thousand gallons of natural gas liquids.
With $5.8 million in cash – a dramatic increase from 2020 – CEI’s current assets amount to $5.9 million. It is also due $4.1 million from Viking Energy which brings its total assets to $46 million – 175% increase from the year before.
However, its total current liabilities amount to $96 million while its total liabilities are $118 million. It reported only $401 thousand in sales of oil and gas which is a 236% increase from the year before. Total operating expenses have remained roughly the same at $5.8 million contributing to its net loss of $169 million – a notable increase from its net loss of only $52 million in 2020.
Now that CEI has become compliant with the SEC, its merger with Viking Energy which CEI is already majority shareholder of will likely move ahead and this could boost the company’s revenues. The company has also regained compliance with the NYSE listing standards.
While these financials may be underwhelming for some investors, it marks an important step forward for the company which can now move forward with its plans and potentially attract more institutional investors. Already the company has seen a ramp up in its institutional ownership and the transparency these filings bring could lead to a further increase. As is 27,627,911 shares are held by institutions.
@stockplaymaker1 took a bet on CEI anticipating a run on the release of its financial reports.
@Bankingbucks is bullish that now that CEI’s filings are up to date, institutions and other investors will be able to step in.
Currently trading at $.63, CEI stock shows resistances at .729, .794, and .87. CEI stock has lost some momentum since the filing which in part led to its drop from .79. The stock has a major support at .56 which could be a good entry point. The stock is currently oversold with an RSI of 29 which could indicate a rebound is on its way.
As is, accumulation has been dropping steadily and the MACD is bearish to the downside. For long-term investors, there is still considerable upside since CEI has made notable progress in its reporting. Now that its filings are up to date, more investors have the opportunity to take a position in the company which could help CEI take advantage of new opportunities. As is there are 414 million outstanding shares.
CEI Stock Forecast
CEI’s annual report has been an important catalyst for the company since its shed a lot of light on the company’s operations. Now that the company is in compliance with the SEC and NYSE, the CEI stock forecast is definitely brighter. However, the company’s annual report did highlight some struggles for the company which will need to be addressed. As CEI looks to capitalize on its investment in Viking Energy, CEI could take advantage of the current energy market and increase its sales of oil and natural gas. But in the long run, the company’s filings have helped restore shareholder confidence in the stock.
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