Ivanhoe Energy Inc. (USA) (NASDAQ:IVAN) is currently trading around $0.51, which is below the minimum bid price of $1 per share required for continued listing of primary equity securities on NASDAQ. Even in August, the stock price fell below $1 level but the company regained compliance with the minimum bid price rule within the stipulated timeframe.
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Ivanhoe Energy is a heavy oil development and production company with core operations in the U.S. and China. The company uses a licensed GTL Technology that upgrades heavy oil and bitumen by producing crude oil, which could be used to generate electricity or steam. The company’s U.S. properties are located in San Joaquin Basin and Sacramento Gas Basin in California and the Permian Basin in Texas.
Ivanhoe Energy Inc. (USA) (NASDAQ:IVAN) reported significant net loss from continuing operations of $93.4 million in its 3Q14 compared to a net loss of $15.2 million in the prior year period. It was mainly attributed to an $89.2 million impairment charge related to the Tamarack Project. The company reported net cash use of $3.8 million for operating activities in 3Q14.
The company reported cash and cash equivalents of $2 million as at October 28, 2014. The company noted that the existing financial resources are inadequate to fund the future capital expenditures. To secure sufficient funding to continue the development of its existing projects, the company has already engaged advisors. In addition, the company is also expecting a net tax refund from a sovereign government, which could also improve its liquidity position.
Ivanhoe Energy Inc. (USA) (NASDAQ:IVAN) is mulling several strategic and financial alternatives focused on improving its liquidity position, including the sale of its assets, recapitalization, debt restructuring or any combination thereof. The company will provide further update once its Board of Directors decides to pursue any specific transaction upon completion of the ongoing strategic and financial review process.
In addition, the company also announced that it is not expecting to make the cash interest payment of $1.8 million due December 31, 2014. The payment is due in respect of its outstanding unsecured subordinated debentures.
Given the uncertainty surrounding the company’s ability to access additional financing, there is significant doubt as to its ability to continue as a going concern.
Ivanhoe Energy Inc. (USA) (NASDAQ:IVAN), just like nearly all other energy stocks, even faintly related to oil, are going downhill with a lot of speed. This stock has been one of the most volatile ones as it has oscillated between the broad range of $20-$70 more than 10 times in the last 10 years. But 2013-14 saw a huge breakdown in the stock, registering new life-time lows which still doesn’t show any sign of stopping. On the other hand, the downtrend seems to be gathering fresh momentum in the recent weeks.