PetroGas Co (OTCMKTS:PTCO) is an interesting story on the OTC right now. PTCO’s chart is quite astounding to look at within a 30-day period. The stock fell off a cliff in mid-February to only gain it all mostly back and now has some serious upward momentum under its belt (even if we are not quite sure what the momentum is exactly about).
All said, PTCO is known for volatility and has lost more than 90% of its market cap in less than a year. They are trying to rebound as oil prices are bullish as can be seen in this particular example of optimism: “We’re delighted to have been able to close on this purchase during a time when oil and gas prices are hovering at 3-year highs. We believe that owning a stake in the largest petroleum-producing basin in the US is an achievement in itself and we plan to continue pursuing opportunities throughout the US as they become available to us,” said the CEO of PTCO. While, the CEO is right to be optimistic maybe about US oil prices, it is doubtful that the recent moves by the company are a gamechanger.
PetroGas Co (OTCMKTS:PTCO) trumpets itself as a company that operates in the oil and gas industry. It has a total of 7 wells in Rogers and Burns leases covering an area of 714 acres located in Frio and Atascosa counties, Texas.
The company was formerly known as America Resources Exploration, Inc. and changed its name to PetroGas Company in January 2016. PetroGas Company was founded in 2014 and is based in Houston, Texas. PetroGas Company is a subsidiary of Rise Fast Limited.
According to company materials, “Petrogas Company, Inc. is an oil and gas exploration and production company focused on the acquisition of properties in areas with significant oil reserves and drilling potential. The Company’s growth strategy includes the acquisition of oil fields from distressed third parties at a substantial discount to value, and development of fields whose potential has not been fully maximized.”
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PTCO’s new interests in West Texas consist of a minority stake in two large sections of three different surveys in the county totaling 1,600 acres. Terry County has over 3,600 drilled wells running and is meant to be a proven oil and gas production area, where many major production companies operate. Based on estimates, this acquisition will not bring in a ton of revenue – and it is a lease as we noted in a previous article, which does help to keep expensed low – but the real boost in price for PTCO might be related to their slightly improved balance sheet.
In their recent earnings report, PTCO reported 432% increase in cash in hand as compared to March 31, 2017, the total amount of assets remained almost the same. On the side of the liabilities, approximately 53% decrease in the total amount of liabilities was remarkable. The reason behind this decrease was the payment of a large sum to note holders.
However, for the first time, PTCO was able to report positive royalty revenues. The amount was small but it shows a sign of things moving in the right direction.
Earning a current market cap value of $91.8M, PTCO has a float of 29.87M shares. The company is seeing some great upward price action but short sellers are watching PTCO and I would be on the lookout to see if they push this one back down in the next few days. Sign-up for continuing coverage on shares of $PTCO stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $PTCO, either long or short, and we have not been compensated for this article.