PetroGas Co (OTCMKTS:PTCO) continues to be a stock full of rips and runs. PTCO has been highly volatile most of the year. Just in March, we have seen the stock soar to over $3 and then lose support plunging back to $1.60. Obviously, this kind of trading is not for the faint of heart and PTCO looks like it might be rallying again as the stock is up 33% on the day with steady volume.
The volume has been prominent in March but it appears as if concerns over the stability of the oil market (the recent hints that Saudi Arabia and Russia might not have the same long-term goals probably fueled the selling fiasco for PTCO) might be pushing this stock down as soon as it crawls its way back up. Currently, the oil market has upward momentum combined with bullish inventory data but any geopolitical news out of Venezuela or Iran could squash that upward trajectory.
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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For PTCO’s sake, the company has new interests in West Texas consisting 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.
“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 PetroGas Company.
However, and as we noted in a previous article, PTCO has a clear track record of engaging in deals that present a scenario meant to suggest serious exposure to potentially major oil production opportunities. These deals have been misleading in a manner that has been unproductive for speculative traders as the company is actually leasing small plots near land that was once productive. The cash outlay in such situations has been on the order of a couple thousand bucks rather than the $100-250K deals one might expect.
Earning a current market cap value of $69.23M, PTCO has virtually no cash on the books, which stands against about $350K in total liabilities. We like momentum plays in the craft oil market but PTCO might just be out there wildcatting or trying to be near a well that is well locked down. We will have to wait and see how this one colors out. 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.