$AEPT Set to Rally on Revenue Growth & Guidance American Energy Partners Inc.(AEPT)
Current Price: $0.0029
About American Energy Partners Inc
AEPT and its group of companies focus on providing solutions in markets where energy production and water meet technology. Collectively, the subsidiaries are engaged in the energy sector as well as the design, construction and operation of regional water treatment facilities that serve the industrial, energy and government sectors.
AEPT Inks Big Time Partnership
Subsidiary, Oilfield Basics LLC, Signs Partnership With Leading Oil and Gas Data Analytics Company, Well-Database
On June 30th the Company announced that its wholly owned subsidiary, Oilfield Basics, LLC, (“OB”) an industry leader in educational marketing of oil and gas industry topics, has entered into a strategic partnership with Well-Database (“WD”). WD is a leading provider of oil and gas data and analytics. This partnership provides Oilfield Basics with unparalleled data and analytical tools for its content creators and provides Well-Database with a ready-made educational platform on which to highlight their analytics expertise. The combined talent and strategic positioning of the companies are unparalleled in the space.
Oilfield Basics was recently acquired by American Energy in February of 2020. The company specializes in producing and curating free weekly podcasts with industry leaders and high-quality educational content on cutting edge industry content available nowhere else. Derek Krieg, President of Oilfield Basics, commented on the partnership, “The combination of this level of oil and gas data and analysis with future educational content will bring the quality of our offerings into a new level of sophistication not yet experienced in the industry. This brings us closer to providing our targeted educational experience for our users wherever they are in the world at any time.”
John Ferrell, President of Well-Database, adds, “We love the vision of Oilfield Basics and are thrilled for the opportunity to partner with them. Data has become a necessity in our industry. Understanding that data is a critical part of any oilfield education. We look forward to working with the team and providing the highest quality, tools and content.” The information accreted and analyzed by Well-Database includes well locations, production, and completion details across every active play in North America.
Goldman Small Cap Research Slaps On
5-Cent Price Target.
Over 1500% Upside
Investment Highlights
AEPT is a diversified energy products and service firm whose M&A strategy is just beginning to bear significant fruit, thereby raising the Company’s profile and valuation. Management provided recent guidance for 1Q20 that demonstrates substantial top-line and profit increases as compared to the year-ago period.
While other energy firms are contracting, AEPT is growing. In our view, this event is representative of management’s keen energy segment M&A identification, and integration which de-emphasizes oil and gas ownership and focuses on in-demand geotechnical and educational products and services. Moreover, it affirms the Company’s buy and build strategy.
Investors can expect meaningful top-line on an organic basis this year and in 2021. We project nearly $1M in sales this year with net profit and $1.2M in sales and higher profit margins next year.
We believe that management will leverage its current success by executing sizable M&A deals this year and in 2021. As a result, we project sales could reach $3.2M with a closed deal mid-year and $6.2M in 2021 with an additional deal in hand.
Our 6-9 month price targets assume substantial increases from current levels. By utilizing an industry-standard 15x next year’s net income, we forecast AEPT could easily reach $0.01 without M&A and $0.05, with closed deals around the sizes we forecasted in our model.
AEPT reports preliminary performance indicators and record topline growth.
The three months ended March 31, 2020 has shown staggering growth compared to Q1 of the previous year. Amidst the most volatile commodity cycle in recent history, American Energy has shown a significant increase in revenue, as well as the following additional KPI’s:
Q1 2020 revenue has grown from just under $16,000 in Q1 2019 to just under $250,000. This represents a growth rate of approximately 1,462%;
Q1 2020 net income has grown from a deficit of just over $82,000 in Q1 2019 to a gain of over $29,500. This represents a growth rate of approximately 136%;
Q1 2020 total assets has grown from just under $88,000 in Q1 2019 to just under $302,000. This represents a growth rate of approximately 243%;
Q1 2020 accounts receivable has grown from just over $9,200 in Q1 2019 to just over $162,500. This represents a growth rate of approximately 1666%
The volatility within the U.S. markets has presented various opportunities for American Energy’s “buy and build” strategy. The Company has reviewed a number of undervalued assets and is currently in active discussions with several acquisition targets within the Energy Services Sector.
Brad Domitrovitsch, Chairman & CEO of American Energy, stated, “Our strategy to further distance ourselves from the volatile oil and gas market has continued to pay off. Q1 revenues derived from oil and gas represent less than 10% of total Q1 revenues. Geotechnical sales continue to be a strong driver and a testament to our managements’ foresight and ingenuity.”
American Energy Partners, Inc. Announces Record 2019 Year End Guidance Top Line Revenue Growth Over 230%
American Energy Provides Guidance for Q1 Financials; Record Numbers Indicate Strong Growth
Key highlights:
Top line revenue grew by well over 230%
Organic growth revitalized and above September guidance at +60%.
Total assets grew by 68%.
American Energy management cut its net operating loss by over 50%.
American Energy’s ending cash balance increased by over 130%.
No Economic Slump For AEPT
Exogenous factors contributing to economic slowdown in the oil and gas industry, as well as many other factors have not and for the foreseeable future should not affect American Energy.
We have successfully insulated American Energy by focusing on the energy services sector, while still maintaining ownership of a small oil and gas well portfolio despite price volatility.
American Energy has a strong “Buy and Build” strategy for growth. Our strategic agenda has since completed the acquisition of both Hickman Geological Consulting, LLC and Oilfield Basics, LLC. Both acquisitions were immediately cash accretive and in line with our disciplined acquisition process.
We maintain a robust pipeline of potential targets. This pipeline is carefully selected to fit within our strategic pillars. Sellers must be accretive. We are not focused on turnarounds at the moment. Below are key highlights of the acquisition process:
Sustainable Margins
Recurring Revenues
Quality Customers
Strong Management
AEPT has identified a pathway to profitability which can be summed up in four elements:
Deleveraging & Re-leveraging Balance Sheet
Streamlining Corporate Overhead
Enacting Operational Efficiencies & Controls
Up-listing to OTCQB and Annual Audits
American Energy Partners' Oilfield Basics Announces Industry Professionals Contracted to Build Online Course Content
AEPT excited to announce that its wholly owned subsidiary Oilfield Basics is on track to meet its announced expansion of remote learning content. The first suite of courses will be available beginning this summer.
Derek Krieg, President of Oilfield Basics, noted that, “Oilfield Basics has seen a surge of interested professionals across our industry reach out to us wanting to share their knowledge with others across our incredible industry.” David Marks of Dominion Energy Field Services was one of the first to agree to contribute. Mr. Marks is an energy commodities trading expert who specializes in Appalachian Basin futures.
Mr. Marks commented, “I am working diligently to create coursework that introduces financial and commercial concepts of buying, moving, storing, trading and marketing natural gas in the United States in unprecedented historic times.” He continues, “I am creating courses that the industry has always needed – information that is beyond generalizations when discussing the commercial aspects of natural gas. The information presented here mixes proven principals with real world requirements, limitations and pitfalls.” Mr. Marks sat with Derek Krieg for a short interview to address his upcoming course content; click the following link to redirect to Oilfield Basics: David Marks Interview.
Among others, Oilfield Basics has contracted with chemical testing company, GeoKimika, of Houston, TX. GeoKimika has agreed to develop course material relating to oilfield chemistry, specifically in the realm of complex hydraulic fracturing operations. GeoKimika specializes in ensuring that the quality of material promised by companies in hydrologic fracturing is delivered on-site and pumped downhole. The coursework will be designed around how to ensure that every dollar spent on stimulation has a positive return on a company’s bottom line.
Krieg concluded, “Although the energy industry and economy as a whole are suffering great loss, the importance of remote learning is becoming more and more apparent. We believe the need for Oilfield Basics’ services will only grow throughout this downturn and as the energy sector’s workforce experiences a large turnover in the months to come. Our courses will be there to help individuals inside and outside of oil and gas.
During the ongoing COVID-19 pandemic and associated economic uncertainty Hickman Geological Consulting has continued to see growth and opportunity, as well as record sales estimated for Q1.
AEPT's wholly owned subsidiary, Hickman Geological Consulting, LLC (“HGC”) has planned for
continued growth of their geotechnical services in 2020. HGC has doubled its workforce to meet
demand and expansion in the sector. In 2019, HGC saw an expansion of their geotechnical
services and this increase has continued into 2020 to the point that the Company must expand to
continue to provide the same quality service to our clients.
The Commonwealth of Pennsylvania is among the states with the fastest-rising unemployment;
the U.S. Department of Labor quoted that for the week ending on March 14, the Commonwealth
had the fourth-highest increase in initial unemployment claims. The last time Pennsylvania saw a
severe uptick in unemployment was during the Great Recession. The State Department of Labor
and Industry reported then that at the start of the economic downturn, the unemployed rate was
4.6% and it eventually peaked at 8.7% in 2010. The State Department of Labor and Industry
stated; that spike is far beyond anything the Commonwealth’s unemployment compensation
system has seen before.
During the ongoing COVID-19 pandemic and associated economic uncertainty Hickman
Geological Consulting has continued to see growth and opportunity, as well as record sales
estimated for Q1.
Josh Hickman, President of Hickman Geological Consulting stated, “It brings me great joy and
pride to see HGC in a position to offer additional jobs to the great Commonwealth of
Pennsylvania. We also look forward to offering more robust service package to our clients.”
The roles of these employees will be split between serving our existing clients with construction
oversight, the development of new geotechnical client relationships in the Pennsylvania, West
Virginia and Ohio markets, and the expansion of our geotechnical offerings.
With the addition to our workforce we can expect to see in Q2 of 2020, Hickman Geological
Consulting expanding our geotechnical offerings to provide turnkey solutions for custom home
builders in our service market. This turnkey offering package will include the design of erosion
& sediment control plans, design of water runoff systems, and the siting, design and drilling of
water wells.
The bottom Line
AEPT Is one of the most attractive names in the energy sector right now. The Company has completely insulated itself from the current economic downturn, and has tremendous breakout at this moment
Top Line Revenue Grew By Well Over 230%
Strong Balance Sheet
Insulated From Current Economic Slowdown
Rapidly Growing + Increasing Their Labor Force
Potential Uplisting to OTCQB
Bullish Technicals
We are anticipating a big move from AEPT in the upcoming days, and urging everyone to add it to their watchlists immediately
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