Such a progress can really be called “nice”. Seven days ago, TSU was traded at $0.155, while last Friday it ended at $0.30, setting a two-year high of $0.325 during the session. In case you do not find this impressive enough, then look at the volumes. Over the previous three sessions, a total of 21.67M shares changed their owner. On Friday, the turnover was almost 9M, thus beating eight times the average.
Not only is the stock advancing steadily, but it also enjoys a great deal of interest from investors. This is driven by several factors. Probably the most important is the positive development of the company’s operations on Karl-101 well in Ukraine.
Currently, production tests are underway there. Last Tuesday, Transeuro announced results from the first test – it showed a maximum production rate of 1018 barrels of oil equivalent per day (boepd). As the company’s president comments, these results “exceed” the expectations.
It is a typical policy for Transeuro Energy to issue regular updates on its activities in Ukraine – such are released every week. In this way, the public is continuously informed about what is going on with Transeuro. This is surely positively perceived by investors.
The negative part of the story concerns the financial state of the company. The latest reports show that Transeuro had $2.25M in cash at the end of 2010. At the present cash spending rate, however, this money will be sufficient for about a quarter. The financial data indicate that the operating expenses for the last three months of 2010 were $2.13M.
In addition, we should mention the significant net loss of $5.5M for 2010, together with a reported working capital deficiency of $4M in the end of last year.
Finally, Transeuro seems overvalued by traders – the market cap is $125M, while the net worth of the business is just $20.7M. Besides, TSU is already entering the overbought area as the chart shows.
