Strong and steady volume for Niko Resources (
TSX:T.NKO,
Stock Forum) stock has investors excited after an early-month 28% slide followed company statements that it was looking for refinancing options to keep projects moving.
Since that slide, shares in the Calgary-based oil and gas explorer with projects in India, Bangladesh, Indonesia, Kurdistan, Trinidad and Pakistan jumped 12.95%, climbing $0.47 to $4.10 Monday, with several weeks of steady rises in their wake.
The company had bottomed out earlier in October when shares hit $2.50, down from a 52-week high of $13.68, but hasn’t looked back since, despite no further public news announcements.
One of the reasons for the earlier uncertainty came when the company announced the Elit-1 well, located in the Kofiau PSC offshore Papua province in eastern Indonesia, had come up short and been abandoned. After drilling in water depth of 1,335 feet to a total depth of 3,915 feet, the well encountered 10 feet of gas at the top of a 90 foot sand package.
The company sought to farm out a 40% interest in their Grand Prix PSC Madagascar project to Austrian oil and gas firm OMV, with funds from that deal to be placed in escrow to pay down debt.
“The Company continues to progress options to refinance its credit facility to provide increased funding for future capital programs,” said a
news release on October 1.
Stockhouse Bullboarders are bullish on the future of the company, with ‘Oiltrader0000’ stating, “No problem getting coin. These oil guys are a tight knit group and will back each other up. Probably have the money as we speak.”
User ‘toltonj’ concurs: “Moving up on no news, nice. Once financing, rig negotiations and Capex plan is announced, fog will be lifted and the market could move it back to 10 bucks or higher. For the record, I think we were oversold at 8 bucks..”
For a company with so many irons in the fire, and with a market cap of $289 million, it seems unlikely that Niko will be hamstrung by short term financing when they have so many asset sale and farm-in options, which would make the current depressed share price a solid profit opportunity and may be the thinking behind the steady growth in share price of the last three weeks.
FULL DISCLOSURE: The author holds no shares in Niko Resources.
Because he’s a writer. And writers are poor.