SeeThruEquity Issues Update on DXI Energy, Inc
New York, NY–(January 31, 2018)– SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has issued an update on DXI Energy and updated its target price to US$0.20.
The report is available here:
January 2018 Update Note.
DXI Energy (TSX: DXI, OTCQB: DXIEF,) is an independent upstream oil and gas exploration and production company operating in Colorado’s Piceance Basin (25,684 net acres) and the Peace River Arch region of Canada’s Western Sedimentary Basin in British Columbia (13,093 net acres). Formerly Dejour Energy, the company changed its name to DXI Energy in October 2015, and has offices in Vancouver and Calgary, Canada.
We are updating coverage of DXI Energy following recent financing activities and the initiation of a new phase of drilling at the company’s Woodrush project in Northeast British Columbia.
Highlights of recent developments at DXI Energy include:
- DXI announced that it will begin drilling on a new multi-well oil exploration drilling program at its Woodrush project targeting new oil production and reserve expansion in mid-February, with initial results likely reported in 1Q18.
- Management disclosed encouraging 3D seismic data indicating the potential to increase daily production at Woodrush by 1,500 BOED, with a potential increase to reserve value of more than C$30mn during this first phase.
- The company also announced a strategic deal providing financial support from a US private investment firm, which along with recent financing activities would serve as catalysts to commence drilling adjacent to its existing production, which would enable the company to leverage more than $12mn of in-place existing infrastructure.
- The partner will cover 50% of cash costs in exchange for a 15% gross overriding royalty, including 2/3 of the cash costs for drilling the first well and 50% of cash costs thereafter.
- Additionally, in December DXI completed the final tranche of a C$3.86mn equity raise, which is expected to support the company’s portion of Woodrush development. Following the raise DXI had 103.6mn shares outstanding.
- With the equity raise and investor partnership to fund drilling at Woodrush, DXI appears to be in an improved financial position in the short run. In addition to monies raised and exploration commitments from its partner, DXI has implemented a cost reduction program to lower G&A by 30%, and has a $130mn in usable tax losses, as well as access to ongoing cash flows from other properties that generate C$0.85mn in annualized net cash flow, according to the company.
Updating price target to $0.20 / C$0.25
We are updating the price target for DXI to $0.25 following recent results and financing activities. DXI shares continue to trade as though the company is in distress, and do not appear to have reflected the recent positive developments at the company, the potential effect of stabilizing oil price appreciation on existing production, or the potential from new exploration and production potential at Woodrush.
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About DXI Energy, Inc.
DXI Energy Inc. is an upstream oil and natural gas exploration and production company with producing projects in Colorado's Piceance Basin (25,684 net acres) and the Peace River Arch region in British Columbia (13,093 net acres). DXI Energy Inc. maintains offices in Calgary and Vancouver, Canada. The Company is currently publicly traded on the OTCQB (DXIEF) and Toronto Stock Exchange (DXI.TO).
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative business model for equity research that is not paid for and is unbiased. SeeThruEquity is the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion.
SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet. SeeThruEquity maintains one of the industry’s most extensive databases of opt-in institutional and high net worth investors. The firm is headquartered in Midtown Manhattan in New York City.
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