C&J Energy Services Ltd (NYSE:CJES) Making A Comeback

C&J Energy Services Ltd (NYSE:CJES) is making a comeback and rebounding just as we expected. We told our subscribers last month that "CEO Randy McMullen and his team of advisors will come to a solution with creditors and avoid bankruptcy. The 56% drop in price to $0.46 per share is an over-reaction and we expect shares to rebound once the picture becomes clearer." Now shares have doubled from where we first recommended them and we think they're still going a lot higher.C&J Energy Services describes itself as “a leading provider of well construction, well completions, well support and other complementary oilfield services to oil and gas exploration and production companies. As one of the largest completion and production services companies in North America, C&J offers a full, vertically integrated suite of services involved in the entire life cycle of the well, including directional drilling, cementing, hydraulic fracturing, cased-hole wireline, coiled tubing, rig services, fluids management services and other special well site services. C&J operates in most of the major oil and natural gas producing regions of the continental United States and Western Canada. The company also has an office in Dubai and is working to establish an operational presence in key countries in the Middle East.”On June 1, CJES entered into a forbearance agreement with respect to the previously announced covenant violation, as well as with respect to the payment of interest and certain fees under the credit facilities. As previously reported in connection with the release of its first quarter 2016 results, the Company previously obtained a temporary limited waiver agreement from its lending group in respect of its violation of the quarterly minimum cumulative consolidated Bank EBITDA covenant required to be tested at March 31, 2016, effective from March 31, 2016 through May 31, 2016.Pursuant to the forbearance agreement, the lenders have agreed to forbear from exercising default remedies or accelerating any indebtedness through June 30, 2016 as a result of this covenant violation or any default that results from the non-payment of interest, commitment fees or letter of credit fees during this forbearance period. The forbearance agreement will provide the Company with additional flexibility to continue discussions with its creditors and other stakeholders regarding the Company's debt and capital structure. CEO Randy McMullen said:

"We are pleased to have extended the relief with respect to our first quarter financial covenant violation, and temporarily alleviated the need to service our debt obligations. We appreciate the support of our lenders as we continue our collaborative discussions, and we believe this forbearance agreement is an important step towards developing a consensual resolution in a manner that benefits our capital structure. As we previously shared with our stakeholders, we are actively exploring strategic financing and restructuring alternatives to improve our liquidity position and ensure financing is available to better fund our capital needs. We believe that this forbearance agreement will provide us sufficient time to work with all stakeholders to address our liquidity issues and high debt levels with a solution that de-levers our balance sheet, strengthening our ability to weather this downturn and ensuring we are strongly positioned to capitalize on the eventual market recovery."

On June 3, CJES received written notice from the New York Stock Exchange that the Company does not presently satisfy the NYSE's continued listing standard requiring the average closing price of the Company's common shares to be at least $1.00 per share over a 30 trading-day period. As noted in the NYSE Notice, as of May 26, 2016, the average closing price of the Company's common shares over the preceding 30 trading-day period was $0.97 per share.Currently trading with a market cap of $77 million, CJES has a period of six months (subject to possible extension) from the date of the NYSE Notice to regain compliance with the minimum share price criteria by bringing its share price and 30 trading-day average share price above $1.00. We feel that we'll be soon trading over $1 and that things will look a lot better in six months time. We will be updating Insider Financial as soon as we know more. For continuing coverage on CJES, sign up for our free newsletter today and get our next hot stock pick!Disclosure: We have no position in CJES and have not been compensated for this article.