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  • Ring Energy Has The Momentum To Rally On In 2014

    Ring Energy Inc. (NYSEMKT: REI) is up nearly 80 percent over the last twelve months, and 16 percent over the last 30 days. Between June and September of 2013, the company rallied from a low of $7 per share to a high of nearly $16 per share, more than doubling its share price in the space of three months. Between October and December, the company experienced a gradual decline to trade at about $11 per share.

    However, it seems to have picked up another uptrend as it now trades north of $14. Many investors will be wondering where the current rally is likely to take the company's stock price following a halt over the last few days, but the company seems to have the required momentum to take it beyond its current 52-week high.

    Ring Energy engages in the exploration, development, and production of oil and gas in Texas and Kansas. The company is headquartered in Midlands, Texas and was founded in 2004. The majority of its assets are located in Kansas, holding 16,517 in gross acres. It also holds 9,980 acres in Texas, making about 26,470 acres in total.

    The company has recently shown great improvement in revenues following increased production over the last one twelve months. During the September quarter, Ring Energy generated $2.8 million worth of revenue from its oil and gas operations, compared to $374 thousand generated in 2012. For the first nine months of 2013 revenues came at $5.2 million, compared to last year's $1.04 million. This improvement is specifically due to increased production volume in oil and gas resulting from the development of leases.

    Ring Energy oil sales volume came at 26,609 barrels for the three months ended September 30, compared to 4,386 barrels produced in the same period in 2012. Gas volumes were also up, increasing to 9,591 metric cubic feet [MCF] compared to just 169 MCF in 2012. For the first nine months, oil production stood at 55,116 barrels, while gas was at 22,440 MCF, compared to 11,653 barrels and 3,319 MCF in 2012, respectively.

    The company recently generated $54.3 million worth of cash via a public offering, and its balance sheet still reads $0.00 in terms of debt obligations. Ring is investing well in expanding its production capacity. In a recent press release, it revealed that during the last three months the company drilled 17 development wells, 15 of which were completed and placed in production by year-end.

    Ring reported that production for the three month period was at 64,000 barrels, and its daily production in December 2013 increased to 806 barrels, compared to December 2012's 114 barrels. This is likely to boost the company's revenues in the next few years as it continues increasing production. This is great momentum for continuous growth in 2014, which I believe will help rally the stock throughout the year.

    Ring Energy turns 10 this year and it seems to have a lot to celebrate. Its recent capital funding should go a long way in supporting sustainable growth and exploring more opportunities. There is good momentum to maintain the current rally.

    Tags: REI
    Feb 04 9:26 AM | Link | Comment!
  • FX Energy's Uptrend Is Just Getting Started

    FX Energy (NASDAQ: FXEN) is up 21 percent over the last 30 days, but only 1.64 percent year-to-date. This means that a majority of this gain came in during December 2013, following a series of promising announcements from the oil and gas company.

    FX Energy is an independent oil and gas exploration and production company which engages in the production, appraisal, and exploration of oil and gas properties primarily in Poland. The company focuses on the exploration of Rotliegend sandstones in the Permian Basin.

    The company has a handful of wells in Poland including Lisowe-1, Lisowe-2, and Komorze-3 which are located in the Fences concession where the Polish Oil and Gas Company is the operator and owns 51 percent of the working interest, with FX Energy owning 49 percent. There are also other locations, like the Szymanowice-1 well (FX Energy owns 49 percent) and Tuchola-4K (FX Energy owns 100 percent), where the company looks to expand production within the next fifteen months.

    On December 2, FX Energy announced that it had completed the Lisowe-2 Well for production, saying that that commercial production was set to begin during the second half of 2014. With this announcement, I believe that investors still acted with caution, because no commercial production has taken place yet. However, Q1, 2014 is here and the company should be making an announcement soon with regard to commercial production in Komorze-3.

    The moment this happens, the real advance will begin. Also, note that there are other major announcements scheduled to follow shortly. The company plans to drill and test the Tuchola-4K well during the first half of 2014. In the second half of 2014, investors will be waiting to hear about the progress on Lisowe-2, while in Q1, 2015 Szymanowice-1 should be ready for commercial production. I see a huge opportunity here, especially because these new projects are expected to begin generating income. They will provide continuous revenue growth over the next 15 months, which could support a long-term uptrend for the stock. Additionally, the company also has seven other potential projects on the way, and following the success of Szymanowice-1, there is genuine appetite to accelerate the drilling schedule.

    FX Energy annual revenues stand at about $35 million. However, with the prospective increase in production over the next 15 months, and with several others in the coming years, the company has the potential to continuously grow its revenues in the near future.

    As of December 31, 2012, its estimated proved oil and gas reserves were 44.1 billion cubic feet of natural gas and 0.6 million barrels of oil, or a combined total of 47.7 billion cubic feet of natural gas equivalent. This is a clear proof of how big the opportunity is for FX Energy, and it seems to be making the right moves towards monetizing the opportunity.

    Therefore, despite the 21 percent jump in December, FX Energy has a lot of room to run in 2014 and beyond. The rally has just started and there is still time to jump in before it is too late.

    Tags: FXEN
    Feb 04 9:22 AM | Link | 1 Comment
  • Chinese Market Won't Help Nintendo

    When China recently lifted its longtime ban on video-game consoles, it opened a hungry market for manufacturers such as Sony, Microsoft and Nintendo. The ban - in place since 2000 - prevented gaming companies from marketing to the most populous nation on Earth because Chinese officials were concerned about the violent content of some games, citing the potential for moral decay. Nintendo shares skyrocketed on the announcement from the Chinese State Council, but those gains were lost within days upon the companies sober earnings announcement.

    Nintendo Co. Ltd projected losses for the year ending March 31. In the Jan. 17 announcement, the gaming company also reduced its global sales forecast for the Nintendo Wii U, the Wii and the 3DS hardware and software. Will reaching the burgeoning Chinese market help Nintendo as it struggles to compete against the likes of Sony and Microsoft, both of which have released next-generation consoles recently? It's unlikely for a variety of reasons.

    In the 14-year absence of legal gaming consoles, the Chinese market has adapted its tastes to mobile gaming. In fact, China's mobile gaming industry is still growing faster than PC or online gaming. Just last year, the sector increased by almost 250 percent to reach $2 billion of the $3.5 billion global mobile gaming market. But, although its competitors have entered the Chinese marketplace by selling mobile devices and adapting its software for mobile gaming, Nintendo has little experience with mobile gaming.

    "Nintendo has long kept its franchises to itself-none of its games, not Mario, Zelda or Pokemon are offered on any other platform," Roberto Ferdman wrote in October. "The company has also skipped out on the smartphone and tablet game market, insisting that focusing on its hardware and existing franchises is still the key to keeping its fans content. Entering the smartphone and tablet world, Nintendo has held, would jeopardize its other businesses, since an ability to play its games on iPhones and iPads would discourage people from buying Nintendo devices."

    Are Chinese gamers likely to hop on board a ship that has little brand-recognition in the nation? Unlikely. The manufacturer places too much importance on the selling power of its cast of characters, and even that strategy has been failing lately. The release of its "Super Mario 3D World" sold dramatically fewer copies during its debut week in Japan than either of the franchise's predecessors, and boosted console sales only slightly. Such a small bump by what was expected to be the biggest Wii game in 2013 was even more disappointing considering the release came four months before the PlayStation 4 launched in Japan.

    What will help Nintendo? Certainly not relying on Wii U sales in the Chinese market when it can hardly get them off the shelves in a world that has followed the gaming company for a generation. If Nintendo hopes to compete in a 21st century market, it must expand its portfolio to compete on non-proprietary devices. Mobile gaming is the future, and Nintendo needs to jump on board.

    Feb 04 9:16 AM | Link | Comment!
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