rpl_chart.pngRenegade Petroleum Ltd (CVE:RPL) (PINK:RPTTF) continued to move down today, ignoring the massive trading from the last Friday and a hammer type candle, which usually indicates an upcoming reversal.

Share price is still stuck in a downtrend – it lost nearly 2% today and the trading volume was not motivating at all. RPL attempt to bounce on a huge volume at the end of last week went unnoticed. The move might have been a delayed reaction to the most recent financial fillings.

On April 27, Renegade filed financial statements for the year end 2010. The fillings showed the company remains concentrated on aggressive growth:

  • Comparatively very low on cash reserves, but has a $45 million loan facility;
  • Depends on receivables, but production rates and sales are going up;
  • Revenues were increasing on average 45% per quarter in 2010, but the rate was rapidly going down, and was “only” 20% in recent quarter;
  • Net losses are increasing along with revenues, mostly due to depreciation and amortization write-downs (which means these losses are only on paper);
  • Spending a lot on new acquisitions and expansion;
  • Constantly raises additional capital through debt and stock offerings;
  • Pumped up production rate by 652% to over a thousand barrels per day;
  • Reduced operating costs by 41% in Q4;
  • Proved and probable reserves were increased nearly 13.5 times.

renegade_petroleum_logo.jpgConsidering these fundamentals, the bottom for share price action should be close. The market cap is currently $209 million, barely 1.6 times the net tangible assets, which is rather low for a producing company with increasing revenues. The closest support is at $3.70 – the last time RPL bounced this level it went up 35% in a couple months.