The share price of Xtreme Oil & Gas, Inc. (OTC:XTOG) almost doubled yesterday after the company published a new press release. XTOG looked bullish already on the previous day, following the filing of the positive financial results of the company. 
XTOG closed trading yesterday with a 95.12% gain from the previous close at $0.40 for a share. Over 442,800 shares were traded within the session, which constitutes the heaviest trading volume for the past year. With such chart constellation, from a technical point of view XTOG may make another jump today, yet longer-term the stock should still be considered with caution.
Intraday chart for yesterday shows that the share price started climbing after a new press release from XTOG came out. It commented on the latest SEC filings of the company made as part of XTOG strategy of becoming a fully reporting entity, but the second part of the PR was probably more interesting. It says that Xtreme Oil and Gas has received a third party private valuation that has put a value of over $102.5 on the company, or $2.24 per share.
The total value might sound reasonable for an operating oil and gas company, but the value per share is another issue. On Monday, XTOG filed its 10-Q for the three months ended June 30, 2011. Along with the reported $1.2 million in revenue (resulting mostly from the sale of a working interest) and the positive net income of $694,486, it shows also that the company has outstanding promissory notes that are convertible into common shares at a 42% discount to an average market price at the time of the conversion.
That imposes dilution risks, just like the fact that at the end of June XTOG had liquid current assets of around $300,000, only $21,721 of which in cash. Thus, the management intention is to raise additional capital, probably through a private placement of equity securities, to secure liquidity for the rest of the year.
