Knight Energy is an emerging oil and gas exploration and production company with leases in West Texas and Oklahoma. Last year, Knight acquired a 100% equity interest in Charles Hill Drilling, Inc., an independent oil and gas services company that owns an executed lease agreement among other assets in Stephens County, Texas. Stephens County has been a successful producer of oil and gas over the last fifty years.
The unfavorable weather prevented Knight from brining in electrical pumps to dewater the A-7 and A-8 wells, prohibiting the wells from producing and generating revenue, but the company was able to make notable progress in other areas such as improving price/sales, price/book value, and price/operating cash flow, in addition to filing its amended Form 10 as the company strives to list on the AMEX this year.
RedChip did not make any changes to its previous report’s 2008 or 2009 estimates or its price target at this time. RedChip closed the first quarter update stating, “The current P/E on FY 2008 estimated EPS of $0.23 is only 11x, suggesting the market recognizes this risk. The target price of $4.50 is base on applying a multiple of 7x to our 2009 EPS estimate.
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