During a challenging time for oil companies, Victory Energy Corp. increased sales in the second quarter by 12 percent. Even with that uptick, the company was still hurt from commodity volatility and posted a $1.2 million net loss, filings with the U.S. Securities and Exchange Commission show.

That's compared with net income of $272,189 for the second quarter of 2014, before the crude oil markets plummeted.

Austin, Texas-based Victory has experienced recurring losses and has an accumulated deficit, which raises substantial doubt about its ability to continue as a going concern, or without the threat of liquidation, according to an SEC filing. The oil company's sales increase was spurred by an increase in oil production in the business' wells by 70 percent.

Despite a shaky financial position of its own, Victory Energy still plans to take advantage of market conditions to expand. In June, Victory announced it hired investment bank MLV & Co. LLC to place a proposed $75 million credit facility that would allow it to make purchases.

“To prepare ourselves for opportunistic acquisitions, we were also able to establish a significant investment banking relationship and hope to begin deploying capital from that $75 million credit facility in the near future,” says Victory CEO Kenneth Hill.

Acquisitions are part of the company’s overall plan to acquire, develop and produce oil and natural gas from properties in Texas. As of June 30, the business had working interests in 37 wells.

The company is in talks with Navitus and other parties related to a potential capital infusion or financing deal. Victory has been operating with the help of a $25 million loan through subsidiary Aurora Energy Partners from Texas Capital Bank NA. 

Crude oil prices have taken a toll on a handful of energy businesses, including Escalera Resources Co. (Nasdaq: ESCR), which recently reached a forbearance deal where it will sell assets to reduce debt; and Cardinal Energy Group Inc., which brought in an investor as part of a long-term financing deal.

Price volatility is a driving factor behind acquisitions in the energy sector, as dealmakers try to buy assets at a discount. For more, see Investors Flow Into Oil and Gas.

For the previous edition of Turnaround Tuesday, see Micro-Brewer American Brewing Cooks Up Expansion Plan, Needs Cash. For more struggling companies, check out Mergers & Acquisitions Distressed Company Watch List

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