Quetzal Energy Ltd. (CVE:QEI) (PINK:QUEZF) gained 44.4% during Monday’s trading session after the company said they have successfully completed one well and found oil while drilling.
The trading volume was 12.9 million, far above the average 1.14 million. QEI price also broke above the resistance at 4.5 cents per share, further strengthening the rally. QEI even showed up among the most actively traded stock on the Toronto Venture Exchange for the day.
The stock was traded so actively after the company announced they found oil in the Upper Mirador Formation at one well in the Llanos 27 Block in Columbia.
The Mani-1 well was the first one drilled under the ongoing program, thus it has now set very high expectations for the whole property. It took nearly two months to drill the well to a final depth of 10.8 thousand feet, thus any follow-up success like that won’t be coming very soon.
The new well can sustain production rate of up to 1,940 boe/d as demonstrated during an initial 57 hour testing.
QEI stock price has been declining throughout most of the past year and currently it is 55% lower than it was at the beginning of 2011, including the 44% gain recorded over the past session. Naturally, the stock currently appears undervalued as one glimpse at their balance sheet shows that the market cap is way below the book value and there is plenty of space for share price rallies.
