Borislav Tonev

It's Time For A New Petrotech Oil & Gas Inc (OTCMKTS:PTOG) Pump

by Borislav Tonev September 18, 2013
0PTOG.pngThe promotional coverage that Petrotech Oil & Gas Inc (OTCMKTS:PTOG, PTOG message board) has been receiving over the last couple of months is absolutely mind-boggling. Since May, we have managed to intercept more than ninety emails coming from a host of different newsletters. The results? Well, when the pumpers mentioned the ticker for the first time, the price was hovering around $0.16. On September 4, just three and a half months later, it hit its 52-week low of $0.005 and whichever way you look at it, 96% lost in such a short period of time is definitely not the sort of performance potential investors want to see.

Wave after wave of emails have been punching PTOG to the ground. After last month's promotion when, once again, some alerts from the newsletters and a few optimistic press releases gave the ticker a boost and then watched it fall down, we were hoping that the promoters will finally leave PTOG alone. It wasn't to be.

Minutes before yesterday's opening bell a new press release was issued. According to it, PTOG have signed a Letter of Intent to purchase 100% working interest in some oil wells in Oklahoma. Shortly after that, Stock Hideout, The Penny Stocks Finder, Lightning Stock Picks as well as a few other newsletters came swarming in. According to our database, the total amount of money paid for the promotion hovers around $18 thousand.

That's not a whole lot (the compensation for Media Analytics Corp (OTCBB:MEDA)'s pump, for example is a mind-bending $3.8 million), but despite this, the effects are profound. The ticker gapped up at the open and although it hesitated a bit during the first half an hour, it was soon on its way to the higher end of the chart. When trading seized, PTOG was standing at $0.035 which is nearly 160% above Monday's close. The question is: "What happens next?".

We're not too excited. We know that the ticker has been featured in paid promotions in the past and we've seen that its performance under the pressure is absolutely catastrophic. Right now, we can see nothing to stop the previous pumps' dreadful falls from repeating themselves.

We're not even sure about yesterday's optimistic press release. The LOI that they signed is with another small cap company called CAVU Resources Inc (OTCMKTS:CAVR) who are supposed to receive quite a lot of cash for the working interest in the Oklahoma wells. The thing is, PTOG's latest financial report gives us the results for the second quarter of 2013 and having looked through it, we're not convinced that they have the money to pay CAVR. Here's a recap of the most important financials:

  • cash: $509
  • current assets: $6 thousand
  • current liabilities: $986 thousand
  • no revenue
  • quarterly net loss: $48 thousand

With that in mind, we can't see what is to stop PTOG from suffering the effects of the pump for the umpteenth time. What we can see, however, is who can profit from the artificially increased price. If you compare the latest financial statement with the one covering the first quarter of 2013, you'll see that they have managed to reduce the current liabilities a bit. But at what cost?

Well, like so many other cashless small cap enterprises, PTOG were forced to issue shares as consideration for notes but the peculiar thing, in this particular case, is the price. In April, for example, a note holder received around 13 million shares 01WTER.pngvalued at $0.003 per share. In July another debt was satisfied with 4.2 million shares, issued at $0.001.

You can see for yourself that the margin for profit is quite big and it's important that you consider all the risks carefully, unless you want to end up with some rather cheap stock that can't be sold. Looking at the charts, the people who fell for the pump on Alkaline Water Company Inc (OTCBB:WTER) might just be in for that treatment.

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