- AXAS has recently undergone a transformation as the company has disposed of non-core assets and has cleaned up its balance sheet over the last several years.
- Recent management presentation leads us to believe that AXAS has potentially found a “sweet-spot” in the Eagle Ford Shale.
- Guidance for 2014 production leads us to believe that the company will enter 2015 producing at least 6,000 barrels per day, with potential upside from Eagle Ford expansion.
- Management’s implied guidance for production and debt levels leads us to believe that 2015 EBITDA will come in at about $90MM, with potential upside in the future.
- A normalized valuation plus non-core assets would give the company a price target of $6, but potential upside leads us to believe that’s the company could be valued at $8.