Yesterday, while Quetzal Energy Ltd (CVE:QEI), (PINK:QUEZF) was announcing the completion of the initial tests and the forthcoming long-term production tests of a 5-foot perforated interval of the Lower Mirador sandstone, its shares remained resistive to the news.
On two markets, the company’s securities met strong pressure from the sellers’ side, resulting in a strong price return back.
On the TSX Venture Exchange (CVE), the price of QEI plunged by 25% between the sessions on a volume of 25.5 million shares changing hands.
At the end of the trading day, the stock’s resistance to the news was not as tragic as the fact that QEI price returned back at an inch of its 52-week low. Such poor price levels had not been seen since the end of September.
The bearish mood was as strong on the American OTC market as it was on the CVE. The sharp downward direction was drown also for QUEZF. On the Grey market, the share price of Quetzal Energy Ltd. dived 24.87% on a heavy trading volume.
Looks like the above mentioned company’s update was not in the power to disappoint investors and to result in a stock spill of yesterday’s scale. In its release, Quetzal Energy Ltd. announced the final of the initial tests on one of its Colombian wells. Among the most important news there was the company’s statement that within 60 to 90 days after obtaining a permit a long-term production test will be conducted.[BANNER]
Unfortunately, while QEI released yesterday that the conducted drill stem test showed that both fresh water and oil in the company’s well are electrically resistive, the company’s shares remained also resistive to the progress report of QEI.
Maybe investors needed more time to make their own “drill stem test” on the company’s developments. According to experts, the drill stem test is a procedure aimed to determine the productive capacity, pressure, permeability or extent of a hydrocarbon reservoir.
Or maybe the share price yesterday was purposely or not injected with some high salinity and not so much fresh water. Fresh water is “used” in the evaluation of a formation. It is considered fresh when its low conductivity makes the interpretation of resistivity logs difficult. The salinity at which this becomes important depends on the temperature and the clay content.
