Viking Energy (VKIN) Presents Details of Recent Acquisition of Texas and Louisiana Properties

Spotlight Companies  |

  • Increases Proven Oil and Gas Reserves by ~ 10.5 Million BOE — ~ 4 Times 2017 Levels
  • Potentially Quadruples Revenue Run Rate
  • Gulf Coast Assets Receive a Premium Over WTI Benchmark Prices

In March 2019

Is AI Ready for Prime Time?

, we highlighted Viking Energy Group’s VKIN acquisition of majority working interest in multiple oil and gas fields throughout Texas and Louisiana—including 58 conventional, producing oil and gas wells and 31 salt water disposal wells—that increased the company’s overall proven oil and gas reserves by approximately 10.5 million barrels of oil equivalents (BOE).

This week, Viking Energy provided details of the increased revenue, assets and proved reserves from the acquired properties, which now reside under the company’s newly formed subsidiary, Ichor Energy Holdings, LLC. The acquisition caps the most active period of growth and corporate progress in the company’s history.

Key Milestones

Click to enlarge

Source: Viking Energy Group corporate overview, April 2019

Ichor Energy Holdings

Critically, the newly acquired properties under the Ichor umbrella reaffirm Viking Energy’s long-standing commitment to its shareholders to pursue cost efficiencies by targeting producing properties with untapped proved undeveloped reserves that provide future upside. Consistent with the company’s focus on operational efficiencies, the Ichor properties will require minimal additional general and administrative costs to operate and are in close proximity to Viking Energy’s other assets, which should enable the company to enhance its profile in this prolific region—whose historically strong demand for oil and gas has supported consistent, premium pricing over the West Texas Intermediate benchmark.

Click to enlarge

Source:Light Louisiana Sweet (LLS) and West Texas Intermediate (WTI) crude oil prices from

Financial Highlights of Acquired Properties

  • Net production from the acquired properties averaged over 2,300 BOE per day.
  • The acquired properties generated revenue in excess of direct operating expenses of about $31.3 million in the year ended Dec. 31, 2018.
  • Total acquired proved reserves were about 6.3 million barrels of oil and 25.7 million cubic feet of gas, or about 10.5 million BOE (where one barrel of oil is deemed to have the same amount of energy content as 6,000 cubic feet of gas).
  • The future cash flow of the estimated proved reserves is about $150.2 million, which reflects an applied annual discount rate of 10%.

Click to enlarge

Source: Viking Energy Group Form 8-K/A, filed Feb. 28, 2019.

Robust Reserve and Production Growth

Viking Energy’s proved reserves grew nearly 210% in 2018, due in large part to the Ichor acquisition. Production increased over 250% in 2018, and may continue to grow if the company is further able to exploit the proved developed non-producing (PDNP) reserves and proved undeveloped (PUD) reserves associated with the Ichor assets in addition to identifying other development and enhancement initiatives.

The acquisition is large, from both a monetary and production standpoint, relative to the size of our company… as it quadruples our current revenue-rate. While significant, it is merely a small step within a more comprehensive long-term acquisition and growth strategy. We are committed to operating these assets, along with our other assets, as efficiently as possible, and to identifying and evaluating additional growth opportunities across all company divisions.

- James Doris, President and CEO, Viking Energy Group

Investment Issues to Consider

Viking Energy has closed eight successful acquisitions since the second quarter of 2017, with the most recent acquisition of the Ichor properties serving as the most significant transaction in the company’s history. Viking Energy has secured a reserve based loan (RBL) with a reputable commercial bank, closed on various financing transactions and increased proved reserves by 11 million BOE.

The success of the Viking Energy’s approach, however, hasn’t been reflected in the stock, which closed at $0.19 on April 10, 2018, giving the company a market capitalization of only $17.3 million. The stock hasn’t participated in the sharp rebound in oil prices, which are up over 50% from their December 2018 lows. In fact, Viking Energy stock is down nearly 30% since oil bottomed on Christmas Eve.

We believe this performance spread to be unwarranted and expect Viking Energy to close the gap in 2019, as more investors appreciate the significance of the addition of 10.5 million BOE and the associated $150 million in discounted future cash flows from the Ichor acquisition.

DISCLOSURE: In the interest of full disclosure, we call the reader's attention to the fact that, Inc. is compensated by the companies profiled in the Spotlight Companies section. The purpose of these profiles is to provide awareness of these companies to investors in the micro, small-cap and growth equity community and should not in any way be considered as a recommendation to buy, sell or hold these securities. is not a registered broker dealer, investment advisor, financial analyst, investment banker or other investment professional. We are a publisher of original and third party news and information. All profiles are based on information that is available to the public. The information contained herein should not be considered to be complete and is not guaranteed by to be free from misstatement or errors. The views expressed are our own and not intended to be the basis for any investment decision. Readers are reminded to do their own due diligence when researching any companies mentioned on this website. Always bear in mind that investing in early-stage companies is risky and you are encouraged to only invest an amount that you can afford to lose completely without any change in your lifestyle. Equities has been compensated with cash, common shares and/or warrants for market awareness services provided.

The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to:

Trending Articles

Kroger App Causes Customer Frustration, Hurts Brand: Jeff Kagan
The Shipping Container Was the Most Important Invention of the 20th Century
Currencies and the Global Expansion of Money Supply
Commodities Post Strongest Gains in Over a Decade
Charlie Munger Doubles Down on Alibaba While the Fed Signals Tightening

Market Movers

Sponsored Financial Content