Cardinal Energy Group Inc (OTCMKTS: CEGX) Is Today's Energy Focus

Cardinal Energy Group Inc (OTCMKTS: CEGX) was incorporated under the state of Nevada on June 19, 2007. Initially, it was named Koko, Ltd., but the name was changed to Cardinal Energy Group, Inc. on October 10, 2012 after the company acquired the ownership interests of Cardinal Energy Group, LLC. At the moment, the company is located at Upper Arlington, Ohio, and it is engaged in the business of acquiring, exploring, developing, and operating oil and natural gas. There are several transactions going on that make us believe that this company may be a great investment play right now. There are numerous institutional traders acquiring big stakes in the company. In this article, we will tell you reasons behind this activity. First, take a look at the chart: SourceBusiness and assets of the companySourceCardinal Energy established a two-fold growth plan to develop oil and gas reserves. First of all, the company acquires fields with undeveloped reservoirs that show growth opportunities through drilling programs. Additionally, the company also looks for other low producing oil and gas wells located in mature fields and works with them to find new pay zones, using new technology, which has never been used previously in the area.In the last annual report, we found out that the company owns several wells located in Texas. As of December 31, 2015, Cardinal Energy Group holds 1,381 barrels of oil equivalent, all located in Texas. The following is a list of the oil and gas fields, in which the company owns interests:

• Dawson-Conway leases located in Shackelford County, Texas (85% working interest): Acquired in July of 2013 for $400,000, it consists of 41 wells on 618 acres.
• Powers-Sanders lease located in Shackelford County, Texas (100% working interest ): Acquired on March 5, 2014 for $600,000, it encompasses 385 acres and 5 producing oil wells.
• Stroebel-Broyles leases located in Eastland County (100% working interest): Acquired on March 6, 2014 for $75,000, it encompasses 235 acres and 32 wells.
• Bradford “A” and Bradford “B” leases located in Shackelford County, Texas (93.75% working interest): Acquired on June 16, 2014, it encompasses 320 acres with 7 producing wells.
• Fortune prospect located in Shackelford County, Texas (43.75% working interest): Acquired on September 2, 2014 for $80,000, it consists of five tracts of land aggregating just over 310 acres.
• Bradford West (100% working interest): Acquired on December 31, 2014 for $20,000, it encompasses 200 acres.

The company noted in the annual report that it had disposed off assets mainly in 2014 in exchange for the return of shares. Additionally, in 2016, the company received $130,000 for the disposition of its regional operating complex located in Albany, Texas. The fact that the company disposed off oil and gas assets mainly in 2014 and did not report any other sale of interests in 2016 should be seen as a good factor.Institutions are buyingWhat we found extremely interesting in this company is that a large amount of companies and financial institutions are becoming right now shareholders of Cardinal. We will note here the transactions that we identified, but first let us explain the rationale. We believe that buying when savvy traders such as institutions buy is a great idea.

• On December 30, 2016, Meyers Associates, L.P. and Gregory R. Traina bought 300,000,000 shares of restricted common stock.
• On January 24, 2017, Rockwell Capital Partners, Inc. acquired $158,419.46 in liabilities of the Company.
• On January 6, 2017, Rockwell obtained 251,008,000 shares.
• On August 01, 2016, UNION CAPITAL, LLC disclosed a 9.99% stake in the company (by way of conversion of a security)
• On March 22, 2016, Tonaquint Inc. reported a 9.99% stake as well (warrants and convertible debt)

As noted in this article and this other article, we believe that the crude oil price will rise due to the OPEC production cuts. The market seems to agree with this rationale.Balance sheetAdditionally, like the other oil and gas plays that we covered recently, this company shows a large amount of debt investors. These investors are most of the time the institutions cited earlier. As noted, they opted to acquire most of the time convertible securities to invest in the company's convertible notes. These securities offer the possibility of receiving fixed payments and also can be converted to common stock if the company goes well.This company may be extremely sexy for shareholders for another reason. The amount of retained earnings is a negative amount of $14 million. If you are a subscriber, you may know why we appreciate this number since we talk about it quite a lot. If another company decides to buy the whole company, this negative retained earnings will be tax deductible for the new created business entity.ConclusionInvestors that are interested in following Cardinal Energy, can stay on top of things either by subscribing to our services or checking its website. Things look to be brewing judging by the recent hedge fund buying and a rebound in the price of oil. There's also the possibility that Cardinal gets bought out due its large net operating losses and production assets. Either way, the smart money is here and retail investors should be interested in figuring out why.We will be updating our subscribers as soon as we know more. For the latest updates on CEGX, sign up below!Disclosure: We have no position in CEGX and have not been compensated for this article.