When Zacks Investment Research recently initiated coverage on Duma Energy, giving the company an Outperform rating based upon its profitability and rapidly growing revenue, it was a vote for the company’s overall strategy of supporting less certain exploratory efforts with an established and predictable flow of income from domestic producing wells. Instead of the common condition of energy exploration companies, founded upon little more than a loan and some prospects, Duma has put together a team of industry pros experienced enough to know a smarter way. By successfully identifying and developing a series of producing wells, primarily in the shallow waters of Houston’s Galveston Bay and Trinity Bay, Duma has built up a dependable source of income.
Duma produced 38,000 barrels of oil equivalent (boe) in fiscal 2011, and produced over 45,000 boe in the first half of fiscal 2012, with year-over-year revenue growth exceeding 500%. With operating margins already approaching 50%, and improving as new wells and production efficiencies increase, the company’s financial foundation continues to grow. They are now sitting on over $77 million in proven reserves (discounted), with less than $12 million booked reserves.
It’s an income stream that has provided Duma the time and backing to explore at their own pace, letting them apply their well-established geological expertise and industry contacts to opportunities overlooked or unavailable to others. An example is their recent acquisition of Namibia Exploration, now a wholly owned subsidiary, giving Duma a working interest in a 5.3 million acre petroleum concession in Namibia, Africa. The Owambo Basin, site of the concession, extends into Angola, one of the continent’s major oil producing countries. The Basin appears to have the elements of a major petroleum system.
For additional information on Duma Energy, visit the company’s website at www.DUMA.com
Let us hear your thoughts below: