Intrepid Potash, Inc. IPI, on Dec 12, 2023, entered into a Third Amendment to the Cooperative Development Agreement with XTO Holdings, LLC and XTO Delaware Basin, LLC, as successors in interest to BOPCO, L.P. The Amendment is effective from Jan 1, 2024.
In consideration of the Amendment, Intrepid received a payment of $45 million from XTO on Jan 2, 2024. This is in addition to the initial $5-million payment received on Dec 12, 2023. The Amendment outlines an additional one-time "Access Fee" of $50 million, payable by XTO within 90 days upon the earlier occurrence of (i) approval of the first new or expanded drilling island in a specified area for XTO's use or (ii) within seven years of the effective date. Intrepid is also entitled to additional payments, up to a maximum of $100 million, as an ‘Access Realization Fee’ for specific drilling activities by XTO.
Intrepid Potash, Inc Price and Consensus
Intrepid Potash, Inc price-consensus-chart | Intrepid Potash, Inc Quote
As part of the agreement, Intrepid commits to supporting and not opposing XTO's development and operation of its oil and gas interests within the Designated Potash Area (DPA).
With the implementation of this Amendment, Intrepid is making progress in achieving its goal of promoting cooperation and optimizing co-development initiatives within the DPA. The received consideration represents a noteworthy advancement in its dedication to delivering lasting value for shareholders. This financial enhancement empowers the company to explore diverse opportunities within its asset portfolio proactively.
Petrie Partners served as the financial advisor to Intrepid in connection with the transactions outlined in the Amendment.
In the past year, IPI’s shares have surged 53.2% compared with the industry’s 23.7% rise in the same period.
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Zacks Rank & Key Picks
Intrepid currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the Basic Materials space are Cameco Corporation CCJ and Carpenter Technology Corporation CRS, both sporting a Zacks Rank #1 (Strong Buy) at present and Cabot Corporation CBT, currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Cameco has a projected earnings growth rate of 156% for the current year. The Zacks Consensus Estimate for CCJ’s current-year earnings has been revised upward by 6.7% in the past 60 days. The stock is up around 76% in a year.
The consensus estimate for CRS’s current fiscal year earnings is pegged at $3.96, indicating a year-over-year surge of 247.4%. CRS beat the Zacks Consensus Estimate in all of the last four quarters, with the average earnings surprise being 14.3%. The company’s shares have rallied 53.2% in the past year.
The Zacks Consensus Estimate for CBT’s current-year earnings has been revised upward by 4.4% in the past 60 days. CBT beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 2.3%, on average. The stock has increased around 7.8% in a year.
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