Abraxas Petroleum Corp. (NASDAQ:AXAS)

CAPS Rating: 3 out of 5

An energy company engaged in the exploration of and the acquisition, development, and production of crude oil and natural gas primarily along the Texas Gulf Coast, in the Permian Basin of western Texas and in Wyoming.

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Player Avatar CheerUp (66.79) Submitted: 2/2/2014 12:07:11 AM : Underperform Start Price: $3.15 AXAS Score: -53.17

Oil co. showing increased rev and decreased earnings. Seems to be bleeding cash. 2 month chart descending triangle projects drop from $3.17 to $2.50, then test $2.00.

Member Avatar Teacherman1 (61.49) Submitted: 3/21/2014 11:32:49 AM
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Not sure I follow your reasoning in this pitch. I have been an investor in and have followed AXAS since 2009, when they were a completely different company. They were the general partner of AXAS Partnership, and had no debt, and were making money. In the spring of 2009, Lehman Brothers was supposed to take them public in an IPO, and when Lehman "self destructed", AXAS had to basically start over. They have come a long way since then, and are now on the verge of becoming a very profitable and growing company. I am now retired, but was in the OIL and GAS business years ago, both as an employee of a large company, and the owner of a small one.

If you are looking at this based on "technical analysis", all you are seeing is the stock movement, caused mostly by a hard core group of short sellers, left over from the LEHMAN FIASCO, and not what the company is doing fundamentally.

Even though I own them at about half of their current value, I believe it is still a good buy at the current price, which is about what their PV10 value is.

They just sold some non-core properties for $73M, which they used to pay down debt, and have the best debt to equity ratio they have ever had, and are steadily increasing production in properties they have 100% ownership in.

Some people look at them and believe they have a "working capital" problem, but they use, and have used their "revolving credit" line for working capital. They have a very good relationship with their bank and this helps keep their interest cost down.

If you are looking for a good longer term (i.e., 2 to 3 year investment) with the potential to double or even triple over that time frame, I would suggest you look for an opportunity to buy in.

JMO and worth exactly what I am charging for it.

Good luck with your investing career.

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