The recent decline in the share price of PetroFrontier Corp. (CVE:PFC), (PINK:PFRRF) seems to have come to an end. The stock started advancing again, bouncing off the bottom. After falling to a 52-week low of $2.65 this Tuesday, PFC began to climb, regaining some of the ground it had lost.
The good news is that the rise is supported by a large volume too. Yesterday, on the TSX Venture Exchange (CVE), the stock progressed to $2.96, moving 3.5% up in comparison to the previous close. The trading volume of 1.22M shares exceeded six times the average.
No new company developments were issued to explain the shares’ performance and the increased trading activity. The latest announcement was released ten days ago when PetroFrontier provided an update of its operations in the Georgina Basin in Australia.
Perhaps, the current advance of the stock is related to earlier news spread by PetroFrontier. Actually, the corporation is not in a bad shape – as the facts show, it is expanding. In late March, the company announced proposed business combination under which PetroFrontier will acquire all of the outstanding shares of Texalta Petroleum Ltd. This transaction has to be approved by Texalta stockholders at a special meeting which will be held in a few days, on May 30.
PetroFrontier is also presenting at the First Energy Global Energy Conference in Toronto. Of course, this will provide the company with the opportunity to become more popular among investors.
Here, we might add some nice figures from the company’s financial reports. A strong cash position of $55.7M in the end of 2010 does not sound bad at all. Neither does a positive working capital of $55M.
Now some dark shades to the story. It is normal for a company in the development stage to incur losses. Nevertheless, a negative net income of $4.37M for 2010 might look a bit disturbing to some analysts.
The downward move of the shares during the last two months also makes quite a negative impression. PFC has lost about 33% from its value since early April. Are the hard times for the stock over? I would not dare to give 100% positive answer to this question.
