Todor Pichurov

Nostra Energy, Inc. (OTC:NORX) Pump Off to an Underwhelming Start

by Todor Pichurov April 3, 2013
6NORX_chart.pngYesterday, as Nostra Energy, Inc. (OTC:NORX, NORX message board) wobbled after a morning gap up, to arrive at a close level with the opening values, the emails promoting the company kept chiming into subscribers' inboxes. Despite the record-volume session and the touts, NORX only budged 7% up.

After two promoters disclosed $100 thousand paid to advertise NORX on April 1, yesterday only smaller pumps came through, with several promoters receiving $50 thousand and one compensated just $15 thousand. Despite the news released by the company on April 1 and the pump touts, the price didn't exactly soar, hovering around the level it stayed at through most of yesterday's session.

The great expectations about NORX are focused around a contract they signed with a company holding working interest in land located in the Bakken region, known to lend lucrative opportunities for horizontal oil drilling. NORX's latest filing, an 8-K dated March 12, reveals the important details of the farmout deal, whose completion would grant the company 100% working interest:

  • NORX to pay $200 thousand to Summit Oil West LLC by April 30, 2013
  • NORX to drill three horizontal wells, estimated to cost around $5 million each, by December 2014

Those all look like hugely profitable ventures, only the clauses detailing the upfront $200 payment also speak of forthcoming exploration and data readings that need to be completed first. In addition to that, NORX has total assets comprising of $8 thousand in cash, with a secured convertible note for another $100 thousand, issued at conversion terms well below the current PPS. Those combined still leave a rather large gap to both the $200 thousand April payment and the $5 million for the first oil well to be completed by December this year.

TRLR_fail.pngThe company released no new press announcements yesterday and movement and accumulating volume were largely due to the ongoing pump campaign. Promoters at The Stock Scout who joined the NORX tout bandwagon yesterday and disclosed $50 thousand in compensation previously ran other pump jobs that cost investors a lot of cash. In late February Stock Scout promoted Trulan Resources, Inc. (PINK:TRLR), then still trading under the TLAN ticker. The pump crashed and burned almost immediately, leading up to a current price of $0.02, or about 85% down from the peak of the promotion. Despite the fumble, Stock Scout bagged $60 thousand for their promotional effort.

Even though NORX is a company that has not yet sunken neck deep in debt, it's still a business that has not proven it can generate revenue, which signed a deal that may prove to be a mouthful.

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