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Seeking Alpha...has recommended AOK today...on AOK's website
Undervalued, Rapidly Growing Oil Company

How would you expect the market to value an oil company growing by over 100% per year? Better yet, a company with industry leading capital efficiency, and that is in a resource play with years of additional inventory to develop. Perhaps such a company would be valued at a 15x multiple like Cabot (COG). Or at 5x its 1P reserve value like Red Fork (RDFEY.OB).

Austex Oil (ATXDY.OB) is an oil and gas exploration and production company focused on the Mississippi Lime in Oklahoma and Kansas. Austex has 23,000 net Mississippian acres and is rapidly growing its production, which is currently at ~700 boepd (72% oil). It has $198 million of 1P reserves and $389 million of 3P reserves, versus a current market cap of $65 million.

Why bother with a small cap oil E&P:

Austex is interesting because it is cheap on both an absolute and relative basis, and because it is growing rapidly (and thus rapidly increasing its value). Austex is very cheap compared to its comps: Austex trades at 1/3 of its 1P reserve value, while other Mississippian focused companies trade for well over their 1P reserve value. Other rapidly growing Australian traded E&Ps trade for as high as their 3P reserve value. It is also cheap on a cash-flow multiple basis - Austex trades for less than 4x 2013 cash flow, which is very low for a rapidly growing small cap E&P. Austex only recently began its development work, and should rapidly close the valuation gap, as other formerly micro-cap Australian E&P companies like Red Fork, Sundance (SDCJF.PK) and Aurora (AAGLF.PK) have been able to do. Catalysts include an updated reserve report, continuing strong well results, higher production numbers, up-listing in Canada in the near term and adding a reserve-based loan.

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