Good fundamental and technical story

Mar 29th, 2010 – Comment

If BOE can get its production to 4,000 barrels of oil per day by this time next year and take advantage of its land base it has a good chance of moving higher.


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americas-petrogas

Lou,

I have been following this company for the past few months as it has climbed steadily. It continues to show positive oil discovery results along with increasing their land holdings in the area. In addition to the oil/gas properties they have a large potash opportunity that they recently partnered with an Indian fertilizer company. What are your thoughts on the further upside potential of this company or do they have major room for capital growth and appreciation.

Regards,

 Barry in Calgary

 

Hi Barry,

America’s Petrogas Inc. ( BOE TSXV) has had a good run from the $0.15 level as  the management team has advance its plan to grow its oil and gas operations and the potash opportunities in Argentina and Peru respectively. The declared corporate goals are to produce 4,000 barrels of oil per day in the next 12 months and to have GrowMax Agri Corp, their potash unit, operational by 2012.

 

To finance those objectives the company has raised close to $16M for development of their acreage in the Medanito Sur basin and another US$9.5M for the fertilizer program. The exploration and production team at BOE lays claim to having developed over 35,000 barrels of oil equivalent per day in output in the same basin while working with other companies.

The company reported on February 25, 2010 that they were producing 450- 475 barrels of oil per day from three wells and that they had identified 25 targets that they wanted to drill on their land base.  To meet the goal of 4,000 barrels of oil equivalent per day of production over the next 12 months BOE is working on the theory that they sitting on an oil field not just a pool.

 

BOE

The three year chart provides a view of the trend that has been in place since last year with some resistance coming into play at $0.95 since late of February 0f 2010. The advance has had good support along the 50 day moving average suggesting that there is buying strength. What we can also see is that the trend is flattening out which would help build some support as it moves higher.

The problem that can arise when a stock moves up aggressively is that there are no ledges to get a grip on if the stock starts to correct.

 

BOE2

The six month chart has a number of features worth noting. The fast stochastics looks to be signalling a pull back and that there is support at $0.85 if it does retreat.

The overall story at BOE is one of a seasoned management team raising funds to develop opportunities on behalf of shareholders. They have established some pretty heady targets but seem to be on their way to achieving  them.

If BOE can get its production to 4,000 barrels of oil per day by this time next year and take advantage of its land base it has a good chance of moving higher.

 

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