Martin Tsvetkov

Bering Exploration, Inc. (OTC:BERX) - a PR-fueled Gainer or Loser?

by Martin Tsvetkov January 24, 2013
BERX_chart_Jan_24.pngWhat is the first thought that comes to your mind whenever you come across a news story that has been rehashed a thousand times before? The managers of Bering Exploration, Inc. (OTC:BERX) have proven fairly capable of doing just that. Alas, this strategy has already turned sour.

The more press releases BERX churns out, the worse its stock's performance on the charts. Yesterday made no exception as BERX closed trade at $0.26, down 25% from its previous close, shifting a total of 700 thousand shares. The stock also lost 8% in value on Monday when 776 thousand shares changed hands. Thus, BERX did almost as bad as in the beginning of last week.

As it seems, the pompous press releases aren't helping BERX anymore. In fact, the company has been boasting about its oil and gas prospects for quite a while and, even though most of them are said to have gross potential amounting to millions of barrels, none have actually proved commercially viable so far. The latter means that oil production, if any, is not sufficient enough to turn the company into a profitable organization.

3BERX_logo.jpgWhat is even more disturbing, however, is the fact that BERX actually holds a huge working interest in all of its seven prospects located across Texas and Louisiana, which means that BERX is directly liable for all the exploration and drilling expenses regardless of the outcome. Should the latter turn successful, shareholders will have a reason to be happy. Otherwise, they will end up empty-handed.

At this stage, the odds might be weighing against shareholders' favour. Why do we think so? Looking at the company's latest financial reports, we see quite a discouraging situation, namely:

  • cash reserves: $27 thousand
  • working capital deficit: $875 thousand
  • accumulated loss since inception: approx. $9.5 million
  • net quarterly revenue: $25 thousand.

The figures mentioned above do not exactly represent a successful company which makes a fortune drilling from high-potential, revitalized wells. Even if BERX were sitting on a real oilmine, the company does not appear to have the resources and financial stability required for regular production.

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