Equus Announces First Quarter Net Asset Value
Equus Total Return (NYSE: EQS) reported net assets of $45.9 million as of March 31, 2024, down from $48.3 million at the end of 2023. The net asset value (NAV) per share decreased to $3.38 from $3.55 over the same period. Morgan E&P, a subsidiary, acquired 5,897.52 net leasehold acres in North Dakota's Bakken/Three Forks formation and began production on two wells. However, Morgan's debt increased by $2.2 million, and its fair value dropped by $1.35 million to $21.25 million due to various factors. The company also incurred operating expenses mainly from professional fees and insurance.
- Morgan E&P acquired 5,897.52 net leasehold acres in the Bakken/Three Forks formation.
- Commenced production on two wells drilled in Q4 2023.
- Net assets decreased from $48.3 million to $45.9 million.
- NAV per share fell from $3.55 to $3.38.
- Morgan's debt increased by $2.2 million.
- Fair value of Morgan dropped by $1.35 million to $21.25 million.
- The company incurred operating expenses, mainly professional fees and insurance.
Insights
Equus Total Return, Inc. reported a net asset value (NAV) per share decrease from
The decision to evaluate Morgan's fair value, resulting in a
In the short term, the decrease in NAV might cause investor sentiment to waver, leading to potential stock price volatility. Over the long term, the company’s acquisition of leasehold acres in the Bakken/Three Forks formation could be a strategic move, but it comes with inherent risks tied to the oil and gas sector’s volatility.
For retail investors, understanding the implications of an increasing debt load and the valuation adjustments of Morgan is crucial. Both factors suggest a need to closely monitor the company's future asset management and operational strategies.
The acquisition of 5,897.52 net leasehold acres in the Bakken/Three Forks formation and the commencement of production on two new wells could be seen as a strategic expansion. The Bakken formation is known for being a prolific source of oil, but it comes with high operational costs and exposure to oil price fluctuations.
While Morgan’s increased debt by
In the short term, investors might be wary of the increased debt and the potential for further fair value adjustments. However, if these new wells achieve expected production levels, it could enhance Morgan's value and benefit Equus in the long term.
Retail investors should be cautious about the inherent risks associated with oil and gas investments, including fluctuating prices and potential regulatory changes.
HOUSTON, May 16, 2024 (GLOBE NEWSWIRE) -- Equus Total Return, Inc. (NYSE: EQS) (“Equus” or the “Company”) reports net assets as of March 31, 2024, of
| As of the Quarter Ended | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | |||||
| Net assets | ||||||||||
| Shares outstanding | 13,586 | 13,586 | 13,518 | 13,518 | 13,518 | |||||
| Net assets per share | ||||||||||
Morgan E&P, LLC (“Morgan”), a wholly owned subsidiary of the Company, acquired 5,897.52 net leasehold acres in the Bakken/Three Forks formation in the Williston Basin of North Dakota and commenced production on two wells drilled in the fourth quarter of 2023. During the first quarter of 2024, Morgan’s debt increased by
The Company received advice and assistance from a third-party valuation firm to support its determination of the fair value of its investment in Morgan.
In addition, the Company incurred operating expenses during the first quarter of 2024 which consisted principally of professional fees and insurance.
About Equus
The Company is a business development company that trades as a closed-end fund on the New York Stock Exchange under the symbol "EQS". Additional information on the Company may be obtained from the Company’s website at www.equuscap.com.
This press release may contain certain forward-looking statements regarding future circumstances. These forward-looking statements are based upon the Company’s current expectations and assumptions and are subject to various risks and uncertainties that could cause actual results to differ materially from those contemplated in such forward-looking statements including, in particular, the performance of the Company, including our ability to achieve our expected financial and business objectives, and the other risks and uncertainties described in the Company’s filings with the SEC. Actual results, events, and performance may differ. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as to the date hereof. Except as required by law, the Company undertakes no obligation to release publicly any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The inclusion of any statement in this release does not constitute an admission by the Company or any other person that the events or circumstances described in such statements are material.
Contact:
Patricia Baronowski
Pristine Advisers, LLC
(631) 756-2486
FAQ
What was Equus' net asset value per share as of March 31, 2024?
How did Equus' net assets change in the first quarter of 2024?
What was the impact on the fair value of Morgan E&P in Q1 2024?
How much leasehold acreage did Morgan E&P acquire in North Dakota?
What were the main operating expenses for Equus in Q1 2024?
