Editors Note: Because of the Thanksgiving holiday, we’re bringing you this issue of Zen Money News a day early. We want to wish you and your family a happy and safe holiday!
It’s official… there will be no super committee budget decision. At least no deal delivered on time. Add that on to Europe’s continuing sovereign debt crisis, and it’s no wonder why the markets continue to fall.
On Monday the DOW was down 248 points to 11,547. The S&P was down 1.86% to 1,192.
Although a lot of equities are suffering oil is remaining stable. Brent Crude is at $106.90 and WTI is trading at $97.40.
Today’s company is diversifying to take advantage of oil’s relative strength.
QUICK FACTS
Ticker GMXR
Industry Independent Oil & Gas
Recent Price $1.34
Market Cap $77.8 m
Shares Outstanding 58.1 m
Average Volume 735,418
Dividend Yield N/A
Website http://www.gmxresources.com
COMPANY DESCRIPTION
GMX Resources is a natural gas and oil exploration and production company. They have two newly acquired oil plays in development.
One on the Bakken, targeting the Bakken & Sanish-Three Forks formation, was just purchased in January 2011. Another, in Wyoming’s DJ Basin, will target the Niobrara Formation. It was also acquired at the same time.
These acquisitions are part of a concerted effort by the company to diversify into oil. Both of those new plays are estimated to be 90% oil.
The majority of the company’s natural gas interests are in the East Texas Basin, specifically the Haynesville/Bossier shale and the Cotton Valley Sand Formation.
FINANCIALS
GMX Resources’ third quarter numbers were released on November 3, 2011.
The company reported revenue of $28.4 million in the third quarter, down from last quarter’s $32.9 million. This is a decrease of 13.7%. GMXR also reported a net loss of $65.9 million… a sharp decrease from last quarter’s loss of $11.8 million.
As of September 30, 2011, the company reported $4.9 million in cash and debt of $341 million.
KEY METRICS ANALYSIS
Trailing P/E N/A
Price / Sales 0.8 x
Return on Assets 1.6%
Insider ownership 8%
Short Ratio 6.7 x
Current Ratio 1 x
Total Debt To Equity N/A
RECENT EVENTS
GMX Resources is a company in flux. This has been a watershed year because of their expansion into oil and the Bakken. GMX estimates there are approximately 600 potential wells just at the Sanish-Three Forks location.
The first wells were finished and began producing in the third quarter. That helped boost the company’s production by 32% year-over-year in Q3. The second well is scheduled to begin production in November 2011.
The company expects to eventually operate 52 North Dakota units. GMX anticipates an average working interest of 50% to 75% per well.
MANAGEMENT TEAM
Ken Kenworthy, Jr. – CEO
Michael Rohleder – President
Jim Merrill – CFO
Gary Jackson – VP of Land
STOCK ANALYSIS
Chart courtesy of stockcharts.com
GMXR’ 52-week low was $1.32 and the 52-week high was $6.48. Right now the stock is trading at $1.34. The 50-day moving average is near $2.11 a share and the 200-day moving average is at $3.51. The company has a market cap of $77.8 million and 58.1 million shares outstanding.
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