Executive Summary

Revenue increased to $1.91M, driven by the first full-quarter contribution from acquired Segundo assets; net loss was $4.40M, or ($0.20) per share, with $1.3M of one-time charges impacting EPS by ~$0.06 .
Average production rose to ~995 BOE/day in the quarter, exiting December at ~1,054 BOE/day as Oklahoma workovers and added compression improved well performance .
Unit costs improved: LOE fell to $14.18/BOE (from $14.60 in Q2 FY17), and DD&A was $14.05/BOE; revenue mix broadened to include $0.64M natural gas and $0.79M NGLs .
Strategic expansion: completed Permian Basin San Andres lease (3,630 net acres) and rebranded to Camber Energy; management targets a six-well San Andres program in late 2017, subject to leasing progress .

What Went Well and What Went Wrong

What Went Well

Production uplift: “These efforts have resulted in an approximate 20% increase in our existing production rate to 1,054 BOE/day for the month of December 2016,” with quarterly average ~995 BOE/day .
Cost discipline and unit cost improvement: LOE averaged $14.18/BOE in Q3 FY17, down from $14.60 in Q2 FY17, reflecting maintenance efficiencies; DD&A averaged $14.05/BOE .
Strategic repositioning: “We plan to begin drilling in the San Andres… estimated to occur in the latter half of 2017. This is a significant step for our Company and the sustainability of growth into the future,” and the company rebranded to Camber Energy .

What Went Wrong

One-time costs and financing fees: ~$1.3M of transaction and retention expenses plus ~$1.0M of closing/financing costs related to Segundo weighed on earnings; net interest expense was $1.5M (incl. ~$0.8M non-cash) .
Persistent net losses: Net loss of $4.40M in the quarter despite higher revenues; adjusted discretionary cash flow remained negative at ($1.03M) .
Elevated G&A: Total G&A was $1.31M (incl. ~$0.3M one-time items), above the prior year’s period, reflecting scaling and restructuring activities .

Financial Results

Metric	Q1 FY2017 (Jun 30, 2016)	Q2 FY2017 (Sep 30, 2016)	Q3 FY2017 (Dec 31, 2016)
Revenue ($USD Millions)	$0.15	$0.89	$1.91
Net Income ($USD Millions)	($1.37)	($50.81)	($4.40)
Diluted EPS ($USD)	($0.80)	($7.74)	($0.20)
LOE per BOE ($)	n/a	$14.60	$14.18
DD&A per BOE ($)	n/a	n/a	$14.05
Production (BOE/day)	n/a	372	995

Product revenue breakdown

Metric	Q1 FY2017 (Jun 30, 2016)	Q2 FY2017 (Sep 30, 2016)	Q3 FY2017 (Dec 31, 2016)
Crude Oil Revenue ($USD)	$0.15M (crude only)	$501,891	$484,016
Natural Gas Revenue ($USD)	$0.00M	$168,998	$636,619
NGL Revenue ($USD)	$0.00M	$223,624	$790,185
Total Revenue ($USD)	$153,000	$894,513	$1,910,820

Key KPIs

KPI	Q1 FY2017 (Jun 30, 2016)	Q2 FY2017 (Sep 30, 2016)	Q3 FY2017 (Dec 31, 2016)
Total Production (BOE)	n/a	34,260	91,591
Avg. Production (BOE/day)	n/a	372	995; Dec exit 1,054
LOE ($/BOE)	n/a	$14.60	$14.18
DD&A ($/BOE)	n/a	n/a	$14.05

Note: No Wall Street consensus estimates available via S&P Global for CEI; comparison to estimates is therefore not provided.

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
San Andres drilling start	Late 2017 (H2 2017)	Not previously scheduled	“Plan to begin drilling… estimated to occur in the latter half of 2017”	Raised (timeline set)
Oklahoma field enhancements	Calendar 2017	Ongoing	Continue maintenance/field enhancements on ~14 wells in 2017	Maintained/expanded
2017 CAPEX plan	2017	n/a	Company working with Board/senior lender to establish 2017 CAPEX and drilling program; details to follow	New planning disclosure

No formal numerical guidance on revenue, margins, OpEx, OI&E, tax rate, dividends was issued in the quarter .

Earnings Call Themes & Trends

No earnings call transcript was available for Q3 FY2017.

Narrative trends across prior quarters and current period (from earnings/press materials):

Topic	Previous Mentions (Q1 FY2017 & Q2 FY2017)	Current Period (Q3 FY2017)	Trend
Production optimization (Oklahoma)	Workovers and compression program initiated; targeting reactivation and efficiency gains	“More than doubled existing production on those wells”; continued enhancements planned for 14 wells	Improving execution
Permian San Andres entry	Lease signed; 3,630 net acres; AMI; plan to drill 6 wells in 2017 subject to leasing	Reaffirmed plan to begin drilling in H2 2017; strategic fit with Hunton dewatering expertise	Advancing toward drilling
Rebranding/strategy	Planning rebrand to Camber and expansion beyond Austin Chalk; platform for growth	Rebranded to Camber; “transaction-driven” to build scale and value	Executed brand/strategy shift
Cost structure	LOE and DD&A rising with asset base; unit costs evaluated	LOE/BOE and DD&A/BOE improved vs prior quarter	Cost per unit improving
Capital & financing	IBC loan taken to close acquisition; continued financing activity	One-time financing/closing costs weighed on results	Financing costs near term headwind

Management Commentary

“We plan to begin drilling in the San Andres… estimated to occur in the latter half of 2017. This is a significant step for our Company and the sustainability of growth into the future.” – Anthony C. Schnur, CEO .
“We are pleased to have finalized [the Permian] transaction… we plan to commence a six-well drilling program in late 2017 should our leasing efforts stay on track.” .
“We have focused on production enhancement… added compression… more than doubled existing production on those wells.” .
“We rebranded and changed our name to Camber Energy… will continue to be a transaction-driven company to create greater mass, scale and value.” .

Q&A Highlights

No analyst Q&A session transcript was available for Q3 FY2017.

Estimates Context

Wall Street consensus estimates from S&P Global were unavailable for CEI due to missing mapping, so we cannot assess beats/misses vs consensus in this quarter. Given the absence of SPGI estimates, no revisions context can be provided.

Key Takeaways for Investors

Operations are scaling: revenue grew to $1.91M as gas and NGL volumes from acquired assets broadened the mix; crude revenue held roughly flat quarter-on-quarter .
Production trend positive: average ~995 BOE/day with December exit ~1,054 BOE/day as optimization and workovers in Oklahoma yielded tangible uplift .
Unit costs improving: LOE/BOE and DD&A/BOE declined sequentially, supporting better operating leverage as production grows .
Near-term earnings pressured by non-recurring items and financing costs: ~$1.3M one-time charges and ~$1.0M closing/financing fees depressed EPS by ~$0.06; net interest expense was $1.5M .
Strategic pivot to Permian San Andres aligned with dewatering expertise; a six-well program targeted for late 2017, subject to lease progress and funding .
Rebranding underscores transaction-driven growth strategy to build scale and value in Oklahoma, South Texas, and West Texas portfolios .

Appendix: Prior Quarter References and Additional Press Releases

Fiscal 2017 Q1 (ended June 30, 2016): Revenue $0.15M; net loss ($1.37M); EPS ($0.80); workovers resumed late June to return shut-in wells .
Fiscal 2017 Q2 (ended September 30, 2016): Revenue $0.89M; net loss ($50.81M) driven by $49.0M impairment on acquired properties due to stock price-driven consideration variance; production 372 BOE/day .
Operational update press release (Jan 25, 2017): 60-day well maintenance program; compression modifications doubled production on example well; planning aggressive field enhancements and H2 2017 Permian drilling .
Permian Basin acquisition press release (Feb 7, 2017): 3,630 net acres acquired; AMI targeting ~20,000 net acres; plan for six horizontal San Andres wells in late 2017 .

CAMBER ENERGY, INC. (CEI)·Q3 2017 Earnings Summary