Cross Border Resources (OOTC:XBOR) –  This oil and gas company has logged an impressive string of revenue growth performance since 2009 which have grown from $1.8 million to $14.8 million in 2012.  Revenue growth in 2013 has stalled somewhat and appears that it will come in around $14 million.  However, it appears that the company will receive regulatory approval to start initiating oil/gas producing activities on more of its properties:

“Also during the period, we received approval to begin remediation work and field redevelopment in the Tom Tom area. The first work was performed in May.  At the end of the third quarter, several workovers had been completed, including 2 recompletions that added new zones to production.”

“In the remainder of 2013, we plan to spend between $2 and $3 million to drill and complete wells, re-enter and complete wells, or improve infrastructure. Our main area of focus is the Tom Tom area, where work will continue to remediate the field and improve production from existing wells. We expect to receive some additional well proposals before the end of fiscal 2013. We expect to finance these activities with cash flow generated from operations and availability under our line of credit with Independent Bank.”

Interestingly investors may be speculating that one of its shareholders may be looking to acquire the company.

“On January 28, 2013, Red Mountain Resources, Inc. closed the acquisition of 5,091,210 shares of our common, bringing its total ownership to approximately 78% of the outstanding common stock of the company.  Prior to the acquisition, Red Mountain Resources, Inc. owned 47% of our outstanding common stock.  As of the date of this report, Red Mountain Resources, Inc. owns approximately 83% of our outstanding common stock.”

It looks like the company is in position to achieve annual profitability for the first time in its history.

Fiscal Year 2013 2012 2011
March

Rev

EPS

$3.3

$0.09

$3.6

$0.04

$1.6

($0.01)

June

Rev

EPS

$3.5

$0.03

$4.1

$0.03

$1.5

($0.01)

Sept

Rev

EPS

$3.4

$0.04

$2.8

($0.03)

$1.9

($0.01)

Dec

Rev

EPS

$4.2

($0.19)

$1.7

($0.03)

Totals

Rev

EPS

$14.8

($0.15)

$6.7

($0.06)

The company does not break out all of its non-GAAP items.  Our best guess at 2013 non-GAAP income is that it will come in at $0.12 fully taxed, while annual adjusted EBITDA is tracking at around $9 million.

  • EV to EBITDA is 3.5.
  • EV to sales 2.3.
  • Trading below book value per share of $1.10.

While we are not akin to analyzing oil and gas companies, investors may find the valuation multiples to be compelling.  Shares were as high as $3.00 in 2010 and have been rising from the three and a half year low of $0.40 reached in 2013.  The stock was up 36% on Friday on 64,000 vs. 3 month average trading volume of 6500.