PILGRIM PETROLEUM COM STK USD1 (OTCMKTS:PGPM) has been the talk of many microcap traders this month. PGPM has skyrocketed by 1600% over the past month, closing at .014 yesterday. This is great news for a stock that not only has been going down from reaching the resistance of .0190 to the short-term low of .0080, this stock has been labelled with the dreaded “skull and bones” by the OTC, due to some quite large insider purchases and suspicions of insider trading.
PGPM did try to calm investors nerves. According to PGPM on their letter 5/25/17, they wrote that:
PILGRIM PETROLEUM COM STK USD1 (OTCMKTS:PGPM) wrote the following: “US Public Corporation” (PGPM) clarify that recent developments related to stock price has nothing to do with dilution, stock sale from insiders or debt conversions issuances. Moreover, the company is more interested in continuing with private capital, from a combination of insiders and certain private individual investors (friends and family). Further, “Management has chosen not to accept typical private equity funding at this time in an effort to maintain complete control and oversight of its operations-assets”.
The purpose of this letter is to confirm our main priority, complete the process of compliance: “adequate current public information” pursuant to OTC Markets Groups Guidelines.
PGPM, according to their website, is:
…a Texas based oil and gas exploration and development (E&D) company with domestic producing crude oil and natural gas properties. The company has positioned itself and its shareholders to take advantage of the supply needs in the energy sector by providing domestically produced resources. We currently hold crude oil and natural gas reserves with the majority of acreage in shallow formation fields for low cost exploration, drilling and production. The company’s management and operational team have extensive oil and gas industry expertise as well as capital market experience. Our combined strengths allow the company to run at maximum efficiency while exploiting the full potential of our properties to maximize production.
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Let us look at the numbers quickly.
As of May 26, 2017, WTI crude Oil is $49.89 per barrel. A quick look at the WTI (NYMEX) Price chart shows price bouncing off from the near term support of 49.00. As per Pilgrim Petroleum’s Data report from Gustavson Associates LLC, Low Estimate for Prospective resources for the 210,000 acreage in Wihchita County, Texas, which PGPM terms as the Northwest Texas Leasehold, is 996 MBbl, best estimate being 1,831 MBbl and Highest estimate as 2,676 MBbl. Lowest estimates should peg their undrilled reserves at 996,000 barrels valued at today’s price of $49.89 is $49,690,440. Outstanding shares for PPG are at 1,152459,514 with price of .0105 which puts the company to be valued at $12,100,824.89.
Price-wise, it looks like the share price does not reflect the intrinsic value of the company. While PGPM is primarily dealing with oil exploration and development, they also provide services to 3rd party operators and partners in the areas of Consulting, Development, Aviation Services, and Enhanced Oil Recovery. This does look like a steal by fundamental analysis.
While the skull and bones warning by the OTC make the situation a bit more complicated, PGPM has a history of accumulating assets and of responding to investor sentiments. Right now, they have three main projects. Firstly, the main project is the Northwest Texas Leasehold with the conservative estimate of 996MBbl. This does not include the other Gas and other products that are found in the site. Second project is the Electra Rework project with Pilgrim’s operational plan calls for the rework and drilling of 50 wells on the Prospect properties. They will have to do some Reworking and Drilling of the wells will utilize bid and budgeted rework assessments as well as 3rd party geophysical analysis and interpretation. Lastly, they have the City National Bank Discovery Well Prospect which covers 4300 acres. This is in addition to their regular counselling and third-party services to other companies.
PGPM is currently trading in a bullish pullback. RSI is at 63, almost oversold levels, showing a big chance of price going further up. Bollinger bands are expanding. PGPM looks good in a technical and Fundamental sense, but there are still other risks like the Commodities market pricing oil lower. For continuing coverage on shares of $PGPM stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!