Endeavour Sees Monster Short Squeeze on ConocoPhillips Deal (END, COP)

Endeavour International Corporation (NYSE: END) is not exactly a household name in the oil sector… It is also hard to get excited about such a small-cap name when you consider the other larger opportunities in oil and gas.  But a 70% gain in a day will catch anyone’s attention.  It might be an understatement to say that this has been a very volatile stock and one that has been with some controversy.

Endeavor announced earlier that it has completed the acquisition of the additional 23.43% working interest in the Alba field from ConocoPhillips (NYSE: COP) which is in the Central North Sea.  This block is said to be a late Eocene reservoir that has been producing since 1994.

This newly acquired working interest combined, along with its prior ownership position, now gives Endeavor a total working interest in the field of 25.68%.

What seems to be the driving force is that after the completion of the additional working interest in the Alba field, the net proceeds from its 2018 notes offering have been released from escrow and those funds have been used to fund the acquisition and to repay outstanding amounts under the Senior Term Loan.

There is a monster short squeeze underway here with a days-to-cover ratio of more than 21 days.  The short interest from the NYSE shows that the mid-May short interest was 6,445,348 shares and that was up from 5,991,566 shares short as of the end of April.

Endeavor’s stock is up a whopping 70% at $10.00 on more than 3 million shares and the stock has been halted multiple times due to the single-stock circuit breakers kicking in. The 52-week range is $5.73 to $16.43.

JON C. OGG