Gediminas Jasionis

Indocan Resources Inc. (PINK:IDCN) - a VERY Dangerous Play Out There

by Gediminas Jasionis March 10, 2010
indocan_logo.jpgIndocan Resources Inc. (PINK:IDCN, IDCN message board) might be looking hot, but still they are just talk and no results at the moment.

IDCN stock is trading up on high volumes and has been attracting so much attention lately that it might be over burning in the coming few trading sessions. Lets look at the facts.

The current price rally was based on the company's public announcements through press releases. The company hasn't filed 8-k form, nor they are filing with the SEC altogether. Moreover, saying they will begin drilling in April doesn't yet mean they necessarily will and the planned cash flows to be reached in July are based on undisclosed calculations.

They said the surrounding wells are producing, but they still don't own any of them. And how much money will it take to drill a well? Onshore wells cost from below $1 million up to 15$ million to drill according to wikipedia. The company only has half a million.  We are not sure how will they be claiming 60% net revenue interest yield on 20 well project with such low funds?

Perplexingly, Indocan doesn't even know if they want to explore oil and gas or dig for gold. Of course digging in Ontario region sounds promising in itself as other companies have proven it's overall potential for mineral claims. But these guys don't even have the sampling started.

For those still thinking this stock might go up in the near future - look at the amount of shares out there. 4.2 billion as reported by! Obviously they are paying with stock for everything they do and don't even bother to announce it. The stock price might be able to keep up for now, but without audited financial data to prove their plans it's a very dangerous play for traders.

IDCN chart


Wikipedia on oil wells - shares outstanding

Comments 0

Type the characters that you see in the box (5 characters).