Strategic Oil & Gas Ltd (CVE:SOG) (PINK:SOGFF) spiked up after the company confirmed significant oil findings and announced an approximate date when another well should be placed on production.
SOG ended Tuesday’s trading session with a 3.3% gain despite jumping up as high as 15% shortly after the opening bell. The trading volume was impressive 3.1 million, 11 times heavier than the average 281 thousand.
The buying pressure was driven by early news. Strategic said to have made a significant oil discovery in their exploratory well drilled at Steen River project. During a four day testing the company extracted 3083 boe of oil and gas mixture. The well is planned to be placed on production in early April 2012. The well is expected to produce three to five hundred barrels of oil per day.
The current corporate production reaches 2400 boepd, which means the new well would add 12.5% to 20.8% to this capacity.
Such a fundamental change means the market price will likely retain a slight increase and could have another run-up today despite the bearish technical situation. The price was already up significantly since the appointment of a new director last Wednesday.
The stock is also prone of large scale price swings, meaning consolidation is one of the less likely outcomes of the current situation and the large spike in daily trading volume is very likely to lure in the bearish traders.
