People on the stock forums are also partly bewildered by this negative mood of the stock. They wonder what is going on with this company. There is no information issued by Strategic Oil lately to throw some light on the shares’ performance and provide better explanation for their movement on the price chart.
Perhaps, the absence of positive announcements is one of the reasons for such unsatisfactory activity of the stock. Yesterday’s decline was not large – just 2% – but it was confirmed by the huge turnover of 1.7M shares. SOG has gone 30% down since its $1.40 peak in February. On Tuesday, it closed at $0.98. It is, probably, additionally disturbing that the stock fell below the psychological level of $1.
Otherwise, most of the facts speak in favor of the company. Strategic Oil shows sober fundamentals and financial stability. Some figures and events to support my words:
* Average production for 2010 was 303 boe/d versus 196 boe/d for 2009. As stated by the company, it “exited the first quarter of 2011 with production over 1,000 boe/d and expects to exit the fourth quarter with production in the range of 1,600 to 2,000 boe/d”;
* The net income for the last year was $5.3M, compared to a net loss of $3.9M for 2009;
* In the end of 2010, Strategic acquired Steen River Oil & Gas Ltd. – a company with a production capability of 600 boe/d;
* The corporation finished the past year with a rock-bottom cash position of almost $31M.
Probably, the slipping over the last days price of oil is one of the few negative factors about Strategic Oil that need to be mentioned.
Nevertheless, as it seems, Strategic Oil will be able to accomplish its ambitious $25M budget program, proclaimed in April. 95% of the capital spending will be allocated to the main light-oil properties – Maxhamish and Steen River.
