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As on 11th December 2018, Sundance Energy Australia Limited (ASX:SEA) (NASDAQ:SNDE) announces the shareholder approval for one for ten share consolidation of the company. This implies the conversion of every ten fully paid ordinary shares on the issue into one fully paid ordinary share. In cases where the shareholder ends up having a fractional entitlement to a share, the company will round off to the next whole number of shares.
The company also announced a temporary stock ticker till the time consolidation is completed. Effective 13th December 2018, Sundance shares will trade on a post-consolidation deferred settlement basis under the ticker SEADA until Friday, 21 December 2018 when it will return to SEA.
The resultant stock split will reduce the number of Sundance shares in the market from 6.87 billion to 687 million. With this, the company aims to ensure its outstanding shares at par with the peer group of companies.
Sundance Energy Australia Ltd, listed on ASX since 2005, is an oil and gas exploration, development and production company with its current operational activities targeted at Eagle Ford, South Texas.
Sundance has recently shared its outstanding financial results for Q3 2018. Companyâs total revenue stands at $53.8 million, representing a massive growth of 70%. It stands strong with net income amounting to $4.6 million for the third quarter. Adjusted EBITDAX for Q3 was $30.4 million, representing approximately 62% margin
As per recent announcement on 14th November 2018, the Company has managed a 40% increase in its Senior Secured Borrowing Base Facility from the US $87.5mm to the US $122.5mm. As stated by Sundanceâs CEO and MD, the firmâs pre-existing available liquidity was enough to support the development program through the second half of 2019. The significant borrowing base increase will further provide additional liquidity cushion to support business operations and development plans as well as expansion activities.
Sundance stock has been on a massive downward trend for a month with a negative average return of 41.25%. As of today, the stock is trading at around $ 0.043, down by approximately 8%.
However, the company anticipates share consolidation to enhance the share price at ten times its previously traded price while having no effect on the underlying value of the Company. However, it cannot be ignored that the share price will continue to be influenced by other factors.
In the light of recently better performing material stocks (as compared to IT and financial stocks), It is worth keeping a close eye on Sundance stock. The organization possesses a de-risked long-term growth strategy of expanding existing production base, acquisition and development of new projects, exploring additional resources in existing basins and pursuing opportunistic merger deals to enhance market presence.
With a market capitalization of 324.06 million, the Company looks well-positioned for growth with a strong portfolio of assets, a solid reserve base, growing levels of production and cash flow, and prudent capital management.
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