EnerJex filed an S-1 for $7.5M of nonconvertible preferred after the close on Friday. They have been harping about all the great opportunities that came with the Black Raven merger so maybe they finally are getting the gumption to raise some more capital to drill those out. The other alternative would have been to farm out some of their Kansas stuff but the terms they probably would have had to offer to get that done probably would have made that less preferable than just issuing this preferred stock.
The timing of this filing makes a lot of sense in that the SEC can now fart around with it for the next 45 days and then once EnerJex issues its '13 10K they can then be in a position to amend this S-1 to include the latest results and have it become effective shortly thereafter.
Can't wait to see what they plan to do with this money. I'm hoping they will use it to drill gas wells in their Niobrara acreage. At current gas prices these wells would pay out pretty quickly and produce for quite awhile. The target there is only about 2,500 ft. deep and they can get a well down there in 1 day of drilling yet it would have EUR of 287 mmcf of gas.
Northland and Euro-Pacific are going to be co-managers of the preferred offering. When they do the road show for that it will be interesting to see to what degree that creates interest in the common stock.
So far the stock has not reacted very favorably to the Black Raven merger but once they get the '13 10K filed I believe the stock will break out from its trading range and the magnitude and extent of the ensuing rally could surprise a few folks.
EnerJex (ENRJ) -- $7.5M Nonconvertible Preferred Stock Offer
Re: EnerJex (ENRJ) -- $7.5M Nonconvertible Preferred Stock O
I talked to Robert. EnerJex is likely to host luncheons for us in Dallas and Houston sometime in April / May. I really like Robert and hope he gets the funding together for an aggressive drilling program. EnerJex needs to grow to justify being public.
Dan Steffens
Energy Prospectus Group
Energy Prospectus Group
Re: EnerJex (ENRJ) -- $7.5M Nonconvertible Preferred Stock O
That's great news Dan, I think doing a luncheon in April would be perfect timing for them. By then they will have gotten the 10K out and will probably (hopefully) have put out some sort of ops update on 1Q production. I believe they got zinged by the frigid weather like most producers up there but I don't think it had a dramatic impact on production.
Due to the continued low interest rates on bonds, etc., there continues to be a voracious appetite for these nonconvertible preferred securities so my hunch is that ENRJ would have little problem selling out their issuance.
Due to the continued low interest rates on bonds, etc., there continues to be a voracious appetite for these nonconvertible preferred securities so my hunch is that ENRJ would have little problem selling out their issuance.