E2E Share Price Jumped On Disclosure Of Revenue

It is a public listed energy company whose shares trade on Australia stock exchange. The share of Eon NRG hiked by 400% after the outcome of the sales revenue

Today morning after US energy company Eon NRG Limited (ASX: E2E) disclosed its monthly revenue, the share price of the company hiked abnormally by 400%. In the month of October, the sale of the company generated a revenue of US$660,000 which is equivalent to A$ AU$929,000.

In the last quarter, the revenue generated from the sales was around $US406,000 a month. Yesterday the stock price of the company jumped from 0.6 cents to 3 cents.

About one-third of the sales revenue was generated through natural gas and the remaining two-thirds revenue from the oil and gas condensates. Gas condensates is a heavier form of gas that condenses to change its form to a liquid state.

Simon Adams who is the secretary of one of Australia stated that the boost in the share price was influenced by an increase in the oil price. The average price per barrel was $US69. Actually, the fact is that the company has some stock left over since the month of September as a result of the slow production rate since the past 6 months.

He claims that the coming quarter will give a positive cash flow even after clearing the debts as the news is acting as a catalyst to push the stock price up. He also said that if the oil price falls down next month the same could not be seen again.

There is one area where the company can make up in case if they encounter a fall in the oil price is in natural gas. In the past two months, there was a sharp increase in natural gas prices. The benchmark price is above US$4/ Mcf (million cubic feet). For the last 6 months, the average price of the natural gas is $US2.40/Mcf.

Mr. Adams states that the company is recompleting or fixing up its second gas well in their Silvertip field in Wyoming. In the hope that there will be a hike in the winter gas prices, the company had saved this work for the winter season. He calculates its current production will increase by another 1000 Mcf of gas to their upcoming production.

By the end of the day, the share price of the company hiked by 216.667% which is equivalent to 0.013 points. The market price of the share by the end of the day as at November 22, 2018 was A$0.019 with the market capitalization of A$2.44 million and PE ratio 1.09x. The market opened at A$0.006 and it went as high as A$0.035.


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