Abraxas Petroleum has received an extension on its period to regain compliance with The NASDAQ Stock Market. The company received its original non-compliance notification on Aug. 28, 2019 when its stock failed to maintain a minimum average closing price of $1.00 per share over a period of 30 consecutive trading days.
NASDAQ originally provided 180 days following receipt of the notice to meet the standard and regain compliance. Since the notice, Abraxas has not achieved the listing requirements, however, NASDAQ has determined that the company is eligible for an additional 180 days, or until Aug. 24, 2020, to regain compliance.
The decision is based on the company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Capital Market with the exception of the per share price requirement, in addition to Abraxas’ written notice of its intention to do a reverse stock split, if necessary.
During the same month as the initial notice, Dallas-based Saltstone Capital Management LLC began pushing for Abraxas’ board to review strategic alternatives to maximize shareholder value. On Aug. 8, 2019, the firm sent a letter to the company’s board citing “another earnings release and another series of disappointments.”
The letter highlighted that the latest company earnings report at the time marked the ninth consecutive quarter of failing to meet consensus estimates. “Management’s failure to work for the best interests of shareholders is galling and its ineptitude in acknowledging the importance of preserving the balance sheet by limiting drilling is very concerning,” the letter stated. “Their perpetual outspend is irresponsible.”
While the firm commended management’s move to release a rig in the Permian Basin at the time, it also called the decision to commence drilling on six wells in the Bakken with “no foresight into the timing of cash flows a preposterous waste of shareholder money.”
Abraxas is a San Antonio-based exploration and production company with operations across the Rocky Mountain and Permian Basin regions of the U.S.
Mid-day on Feb. 26, Abraxas shares were trading at $0.21 each.
To contact the author, email bertie.taylor@rigzone.com.
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