MENA Hydrocarbons Inc (CVE:MNH) (PINK:SKNAF) recorded a significant price jump after the company announced an update on the development of the Lagia oil field they own.
MHN added nearly 60.9% to its share price during Monday’s trading session. The stock’s value passed above its previous resistance at 16.5 cents per share under an extraordinary trading volume of 3.3 million, suggesting there might be further continuation to this rally today.
The buying pressure was created by an update on the development of Lagia oil field in Egypt.
The company disclosed to have signed a drilling rig rental contract with Petroservices Overseas.
Mena plans to execute a six-well drill program. The work should begin when the rig arrives on site in the first half of February.
The stock price breakout could attract additional interest and extend during the next couple of sessions, but confirmation will be needed. Too often stocks tend to rally on overreactions, just to correct back down the next day.
The news described the plans of Mena, but it doesn’t mean the company will definitely benefit from the drilling. There are three producing wells within 26 kilometers from the property, making its potential more realistic, yet the property itself has already been thoroughly tested during the last 60 years and has just over a 1.1 million barrels of proven oil reserves at the time. The probable and possible reserves are estimated to be 9.2 million barrels more, though.
