Quest Oil Corp (PINK:QOIL) has gained massive volume and huge volatility in response to management’s official update on operations. The reaction of the market identified that there were little life changing revelations in the announcement, thus the opportunities for future price gains remain discursive.Basically, the new update just confirmed the acquisition on B&B Oil, Inc. is complete and all the assets are now in Quest Oil’s possession. The CEO talks about low risk oil production opportunities, but with a lack of capital it is hardly imaginable they will lay their hands on “mature prospects with proven reserves.” In the best case, it will look more like scavenging the leftovers.[BANNER]
Apart from restating the company’s key plans and business strategy, the update had no substantial weight. If QOIL manages to squeeze something out of the newly acquired oil well, it will be a much better update, able to drive the price up and not just increase the directionless trading volume.
Another issue is the serious indebtedness. Even if the company started to generate substantial income, they have nearly $4 million in liabilities, not counting the notes payable. This alone generates substantial interest payments every quarter, which can only be covered by stock or more debt issuing at the moment. Conclusively, this stock is not meant to be invested in, but rare and unpredictable short term opportunities make it hardly tradable at all.
