AXP Energy Ltd. (ASX: AXP) and (OTC: AUNXF) is an oil and gas production company focusing on low-cost oil and gas wells in the US by investing in low-risk, high-reward fields. With a market cap of $54 million, the company’s management announced it is on track to be cash-flow positive this month as it focuses on profitability and production while cutting all unessential costs and expenses. Some investors believe that AUNXF is flying under the radar and may prove to be a hidden gem among energy stocks as oil enjoys increasing global demand amidst supply tightness.

Catalysts

AUNXF broke new ground signing a crypto-mining partnership with Elite Mining Inc. (EMI) to provide energy from its Pathfinder Field in Colorado to power the company’s energy-intensive bitcoin mining. The company is currently assessing similar opportunities in Kentucky, Virginia, Tennessee, Indiana, and Illinois where AUNXF’s leases can be utilized for in-situ power generation. As Bitcoin reaches record highs, the opportunity for AUNXF to make major gains from its partnership amidst rising gas prices across the US is a bullish growth sign for the company.

Spread across the US and Australia, AUNXF currently has 1500 wells on 120 thousand acres in the oil producing regions of Texas, Colorado, Mississippi, and Kentucky. According to an independent consultant’s analysis of the company’s resources, the AUNXF has over 10 million BBL in net oil reserves and 4 million in net gas reserves. With the WTI oil price tracking above $80 per barrel and oil reaching peak demand across the country, energy stocks such as AUNXF could see a huge upside.

With this in mind, Tim Hart – AUNXF’s CEO – stated that the company has “been very encouraged by the growing number of shareholders in the US”. To better reflect the company’s economic growth, AUNXF will be uplisting to the OTCQB and plans to complete the uplisting process within the next four weeks.

This change is being sponsored by MCAP LCC, a financial technology developer. It appears AUNXF is looking to bring attention to both its OTC ticker and its counterpart on the Australian Securities Exchange by sharing PR and achieving DTC eligibility. If successful, the additional publicity could bring more liquidity to the company.

AUNXF also released a very positive quarterly activities report highlighting its recent progress. Selling 3,795 more barrels of oil this quarter compared to last, AUNXF saw a similar increase in its revenue which is up 31% over the prior quarter. The company also has cash on hand of $4,066,519 meaning it has no need to raise additional capital for its operations. Responding to queries from investors, AUNXF shared its financial report signifying that it has no intention of pursuing dilution at this time.

Currently, the company is focused on increasing its capital investments to ramp up production – a practice that has served it well so far. Earlier this month, AUNXF formed an in-house drilling team to begin its 8 well back-to-back drill program across the Illinois Basin. Waiting on drill permits to begin work on its first well, AUNXF is prepped to capture peak demand for its oil reserves.

Meanwhile, the company has provided the final payment for its acquisition of the Trey Assets which consist of 115 oil wells across three states. The asset purchase cost AUNXF $1.9 million and the company is eager to begin exploration that will prove the assets benefit to shareholders.

Media Sentiment

@Kanye_Invest with AUNXF trading at only $.0092, this penny stock could be seriously undervalued.

Technical Analysis

energy stocks AUNXF stock chart

AUNXF experienced a sell off mid-October which has left it trading at its support of $.0092. The stock shows a resistance at .0116 and a second resistance at .0159. Yet accumulation has remained consistent despite an RSI of 42. The MACD recently had a bullish crossover but appears poised for a bearish crossover.

Should You Buy

After the earlier sell-off, AUNXF has dropped to a very low PPS ideal for bullish investors hoping to get in on energy stocks in the oil and gas market. While the market is getting a lot of attention thanks to the infrastructure bill and global supply tightness, AUNXF does not have a market cap to reflect it. Volume has dropped off but as the company explores opportunities to capture the Bitcoin Mining energy market, the stock could be set off by a catalyst or oil production – sending it back to its resistance at $.0159.

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