Camber Energy has agreed to buy 51% of Viking Energy for $20 million. Both E&P companies are based in Houston, with Camber traded on the NYSE and Viking traded over-the-counter. The deal is effectively a reverse takeover as it’s the Viking management who will be running the show post-close.
Camber Energy used to be called Lucas Energy and went public in 2006. It’s had a troubled past. The strangest event was in October 2011 when the then-CEO made an acquisition for $22 million without telling the Board or making it public. The issue only came to light a year later when the seller sued for payment that was due in November 2012.
Camber has effectively been a shell since selling its main operating assets in 2019. In June 2019, it announced a reverse takeover by Lineal Holdings, an oilfield construction company. The deal closed but had to be unwound on December 31, 2019 as it did not meet NYSE listing requirements
The Viking deal was originally announced in January 2020, though in a different form. In the original version, Camber would have issued shares to Viking shareholders so that the latter would own 85% of the combined group post-closing.
Instead the revised deal calls for Camber to pay $20 million in cash. This is financed by $9.2 million cancellation of debt owed to Camber by Viking. Camber had lent money to Viking earlier in 2020 to enable Viking to close on an acquisition of 123 wells in Texas and Louisiana.
The remaining $10.8 million was paid in cash and funded by a new loan from Camber’s preferred shareholder.
James Doris, the CEO of Viking, has been appointed the CEO of Camber. Frank Barker, the CFO of Viking, becomes the CFO of Camber. Louis Schott, former interim CEO and Robert Schleizer, the former CFO of Camber, have stepped down. Each was paid a bonus of $150,000.
Viking Energy was the subject of my most bizarre post I’ve written in this blog. In September 2019, the SEC announced fraud charges against a former CEO for creating a fake CFO.