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    Stock Alerts for GMX Resources Inc. (GMXR)

    GMX Resources Inc. (GMXR) is a pure play oil and natural gas exploration and production company with 442 billion of cubic feet equivalent (Bcfe) in proved reserves at September 30, 2010, and 2.7 trillion cubic feet equivalent (Tcfe) in reserve potential that are 94% natural gas. The Company’s world class Helmerich & Payne (H&P) FlexRig 3 rigs are currently developing this contiguous gas resource play on the Sabine Uplift; Carthage, North Field, in Panola & Harrison County of East Texas. The Company has invested $60 million in infrastructure which has contributed to its “Best in Class” finding and development costs.  The Company currently focuses on developing the Haynesville/Bossier (H/B) resource through horizontal shale drilling. In addition to the Haynesville/Bossier development, GMXR has 325 gross/ 186.9 net Cotton Valley Sand (CVS) producers and 45 net Travis Peak Hosston Sands Pettit producers. These multiple resource layers provide high probability and the potential for repeatable organic growth.

    GMXR was founded in 1998 and is headquartered in Oklahoma City, Oklahoma.

    Share Statistics (25-Feb-11) FY

    2008

    FY

    2009

    %

    Chg

    Q3

    2009

    Q3

    2010

    %

    Chg

    Symbol GMXR Revenue, $Mn 125.74 94.29 -25.0% 23.07 24.83 7.6%
    Current price $5.41 Gross marg. 88.0% 87.5% -0.6% 88.3% 88.8% 0.6%
    52wk Range: $3.98-$10.69 Oper. margin -171.9% 25.6%
    Avg Vol (3m): 2,043,210 Net margin -99.1% -191.6% 93.3% -6.0% 13.4% -323.3%
    Market Cap. 152.90M
    Shares Outstanding 31.28M EPS, $ -0.28 -2.96 957.1% -0.12 0.08 -166.7%

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of GMXR added $0.54, or 11.09%, to close Friday at $5.41.  The stock traded with volume of 5.37 million shares, nearly five times the daily average of 1.14 million shares. The stock has so far reached a 52-week high of $10.69, its 52-week low being $3.98.  It remains above its 50-day moving average of $5.16 and its 200-day moving average of $4.84.

    GMXR late last month announced deals to acquire a total of 67,724 net acres of horizontal oil resources within the core development areas of the Bakken / Sanish-Three Forks Formation in the Williston Basin (Bakken) and the Niobrara Formation in the Denver Julesburg (DJ) Basin. The 67,724 net acres include approximately 26,087 net acres in the Williston Basin, North Dakota and Montana targeting the Bakken/Sanish – Three Forks Formation and approximately 41,637 acres in the DJ Basin in Wyoming targeting the Niobrara Formation. The Company previously announced an acquisition of Bakken/Sanish-Three Forks acreage for approximately $1.8 million in cash and up to 2.7 million shares of stock. The Company expects to close the transactions in February and March this year.

    GMXR CEO Ken L. Kenworthy Jr. said these combined transactions are transformational for GMXR, providing the Company with 342 additional horizontal drilling locations in the most actively developed oil resource play in the United States and one of the most promising emerging oil resource plays.

    “These acquisitions now reposition GMXR into three significant Basins with two oil resource developments and two natural gas resource developments which include the largest natural gas resource basin in the U.S. The Company will now manage its capital allocation to the highest risk-adjusted rate of return for either oil or natural gas across over 700 net horizontal locations in these three resource plays, a multi-year inventory using three FlexRig3 rigs,” Kenworthy Jr. stated.

    GMXR said it had cash and cash equivalents of $2.4 million and $92 million drawn on its $130 million borrowing base as of December 31, 2010 –  resulting in available liquidity of $40.4 million.  For 2010, the Company said it has funded its operating expenses and capital expenditures through operating cash flows and draws on its revolving bank credit facility.  Prior to 2010, GMXR has historically generated cash through the same means, as well as financing from its 5.0% and 4.5% convertible debt instruments, which had carrying values of $117.8 million and $74.7 million, respectively as of September 30, 2010.

    GMXR in January said it production for the month of December was 2.1 billion of cubic feet equivalent (Bcfe), a result of additional completions in the last three months of 2010.  This increase in December’s production reduced its estimated monthly per unit cost for lease operating expense and general and administrative expense, excluding a $1.2 million non-recurring estimated selling costs.  The Company expects its fourth quarter 2010 adjusted EBITDA to be modestly higher than its third quarter 2010 results.

    GMXR will release its 2010 fourth quarter and annual financial and operational results after market close on Wednesday, March 2, 2011.

    It will hold a conference call the following day, Thursday at 9 am EST to discuss the results.

    Visit GMXR at www.gmxresources.com

    Financial Summary

    The Company reported net income applicable to common shareholders of $2.2 million ($0.08 per basic and fully diluted share) and $3.0 million ($0.11 per basis and fully diluted share) for the three and nine months ended September 30, 2010, respectively, compared to a net loss applicable to common shareholders of $2.5 million ($0.12 per basic and fully diluted share) and $137.1 million ($7.52 per basis and fully diluted share) for the three and nine months ended September 30, 2009, respectively.

    Adjusted net income available to common shareholders was $1.0 million ($0.03 per basic and fully diluted share) and $4.4 million ($0.16 per basic and fully diluted share) for the three and nine months ended September 30, 2010, respectively.


    Financial Strength (25-Feb-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 0.85 0.94 0.43 0.51
    Current Ratio (MRQ) 0.86 1.06 0.59 0.82
    LT Debt to Equity (MRQ) 97.50 6.71 12.80 107.37
    Total Debt to Equity (MRQ) 97.52 7.67 18.60 151.63
    Interest Coverage (TTM) -16.06 -0.32 2.97 15.78

    Source: Reuters.com, SEC Filings.

    Analyst Consensus

    This is the consensus forecast among 14 polled investment analysts. Against the GMX Resources Inc company.

    Analyst Detail Buy Outperform Hold Underperform Sell No Opinion
    Latest 3 5 5 1 0 0
    4 weeks ago 3 4 5 2 0 0
    2 months ago 2 4 7 2 0 0
    3 months ago 1 4 7 2 0 0
    Last year 4 5 5 0 0 0

    The 12 analysts offering 12-month price targets for GMXR have a median target of 6.50, with a high estimate of 9.00 and a low estimate of 4.00. The median estimate represents a 33.47% increase from the last price of 4.87.

    Source: markets.ft.com

    Consensus Estimates Analysis


    # of Estimates Mean High Low 1 Year Ago
    SALES (in millions)
    Quarter Ending Mar-11 10 31.72 34.00 25.40 35.50
    Quarter Ending Jun-11 10 32.48 35.70 27.37 40.60
    Year Ending Dec-11 11 136.63 158.00 113.58 165.43
    EARNINGS (per share)
    Quarter Ending Mar-11 12 0.09 0.21 -0.02 0.15
    Quarter Ending Jun-11 12 0.07 0.21 -0.03 0.14
    Year Ending Dec-11 12 0.36 0.63 0.11 0.66
    LT Growth Rate (%) 2 12.50 15.00 10.00 12.50

    Source: http://www.reuters.com/finance/stocks/financialHighlights?symbol=GMXR.N

    Technical Analysis

    Source: http://stockcharts.com

    On Wednesday last week, GMXR closed above its 20 day moving average. This is generally considered to be an indication of a bullish trend.

    GMXR is trading near its upper Bollinger Band. This suggests that the stock price is high relative to its recent price action.

    GMXR’s MACD is currently indicating a weak bullish signal. Although the MACD is trending above the signal line, the indicator is still below 0, which suggests that the underlying moving averages are bearish.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Feb25-2011 symbol Share, $ $ Mn 2010 2011 2010 2011
    Cabot Oil & Gas Corp. COG 45.79 4.76B 77.61 34.95 5.33 4.29
    Southwestern Energy Co. SWN 38.87 13.48B 22.47 24.14 6.67 6.10
    BP plc BP 48.10 150.69B 8.15 7.33 0.45 0.41
    Plains Exploration & Production Company PXP 38.20 5.35B 32.65 22.87 3.50 2.97
    CREDO Petroleum Corp. CRED 12.20 122.52M n/a n/a 10.54 9.41
    Independent Oil & Gas Median 27.15 n/a 6.96 n/a
    GMX Resources Inc. GMXR 5.41 152.90M 23.52 17.45 1.57 1.12

    Source: Thomson Financial

    Source: Yahoo Finance

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