Investors seem extremely disappointed from Far East Energy Corp. (OTC:FEEC
, FEEC message board
) reported progress and financial results in the past months. Yesterday, FEEC stock got trading volume several times higher than the average and saw a minor increase in the value, probably due to a research report.
FEEC closed the session 1.43% higher at $0.355 and the trading volume reached 1.74 million shares. It seems that the reason for the intensive trading is the news from Wednesday that a small cap research company will distribute research report on Far East Energy. It looks like those reports are available for free download and the PR does not reveal any compensation received by the company.
Maybe the coverage attracted more traders in the last two days, although the share price did not move much up. Unfortunately, the website of the stock researcher is currently not available, thus it is not possible to see if any compensation has been paid in order to have an idea to what extend the report can be considered unbiased.
In the middle of last month, Far East Energy filed its quarterly report for the three months ended March 2011. For the disappointment of investors, the presented data suggested already last month that FEEC stock might need some support from the outside to stop falling down progressively. The long expected revenues from the sale of gas that FEEC has been talking about for months now, amounted $23,000 for the first three months of the year.
With operating expenses going far beyond $4.5 million, it is hard to image that the company could make any profit soon, even though it states that gross production has increased in the second quarter. Also, it looks like FEEC is not able to pay out its debts. The company had issued a note with a principal amount of $10 million to the partner of one of its subsidiaries. The note matured in March this year and the holders have been paid with FEEC common shares.
So far, $6.8 million under the note have been converted into 14.3 million common shares, remaining principal plus interest being as of end-March $4.3 million. Maturity date has been extended to September 15, 2011 and the conversion price is $0.475.