Quetzal Energy Ltd. (CVE:QEI) (PINK:QUEZF) attracted some bullish investors one day before the sale of their subsidiary was finalized.
QEI stock price extended another 35.7% on Monday as it gapped up beyond the established resistances. The trading volume was 11.3 million, far above the average of 1.6 million.
The gap up added to the previous price rally which seemed on the verge of collapse already. The massive trading associated with it put the stock among the most actively traded ones on the Toronto Venture Exchange on Monday.
The move was part of a building up excitement about the sale of the company’s subsidiary which was announced on January 25. The company said they have entered into a an acquisition agreement with SGS Acquisition Company and will be selling a 100% of the outstanding common stock of Quetzal Energy Inc.
The deal should be sealed today, January 31, 2012 when the company anticipates to get the 1.3 million in cash for the Guatemala property. They will also retain a 10% interest in the first two wells drilled on the properties, as well as an option to participated in other wells by paying its share. SGS is mostly interested in the Guatemala operations of Quetzal where the company has two petroleum sharing contracts and some oilfield equipment ready.
After the sale the company will retain only their properties in Colombia. During 2011 the company drilled the first well on the Llanos 27 block on the properties and thus decided to concentrate on further exploration, abandoning the Guatemalan side of the business.
