American Energy Partners Stock Jumps on Acquisition News

AEPT Rig

At Wednesday’s closing bell, share of American Energy Partners (OTCPK: AEPT) were trading at $0.007.  In Thursday morning action, AEPT has climbed back over the penny mark for the first time since May 29, catapulted ahead by M&A news.

The news follows an announcement earlier this month that a letter of intent was inked for an acquisition, but the target was kept confidential.

The Allentown, Pennsylvania-based group of companies said that it has finalized a deal to acquire 100% of Hickman Geological Consulting, a family owned and operated geological and engineering services firm.  Located about 25 miles southwest of Pittsburgh, the consulting firm was formed in 2014 by the husband-and-wife team of Josh and Jessica Hickman.  Hickman provides geo-technical and valuation resources for surface and mineral landowners throughout Ohio, Pennsylvania and West Virginia.

Josh Hickman currently serves on the board of directors at AEPT.

Terms of Acquisition

Per the deal, American Energy Partners is issuing 40.5 million shares of preferred stock to the Hickmans, which is equal to about 5% of AEPT outstanding common stock. Based upon the closing price of AEPT common stock on Wednesday, the acquisition price would be $283,000.

Management made note that it has the right to repurchase the preferred stock before any other third parties.

Hickman Geological Consulting will join AEPT’s group of subsidiaries, allowing it to offer in-house valuation and broad consulting services to the resource industry.  The rest of AEPT’s group consists of Gilbert Oil & Gas Co., American Energy Solutions and Hydration Company of PA.

“This acquisition marks the beginning of American Energy’s buy and build strategy,” management said in this morning’s news release.

AEPT Stock Info

Shares today climbed as high at 1.5 cents Thursday morning, but have since cooled off, trading at $0.0082 as of 11:27 AM EDT, for a gain of 17.14% so far on the day.  3.5 million shares have changed hands today. The bid/ask spread has widened to $0.007 x $0.01, according to data from OTC Markets Group.

As of the close on July 10, AEPT had a market capitalization of $823,508.

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