Finally, a Ray of Light for Far East Energy Corp (OTCMKTS:FEEC)
Far East Energy Corp (OTCMKTS:FEEC) is a company that is in the methane gas business and is managing all the operations from acquiring the land to selling the final product, with their main operations being carried out in the Shanxi Province of the People’s Republic of China.
The last time we wrote about FEEC they were going south after they had a long run of climbing the charts that lasted nearly 2 months. Right after the peak of their ascend which reached a price of $0.239 per share the stock started to go down, slowly at first, gathering momentum. Volume was below average in most of the sessions, probably in hopes of another uprise, rarely generating any big trade value.
The descent of their stock’s price pushed it as low as $0.129 per share, which was their price in Wednesday this week. Yesterday’s trade session, however, was a ray of light for investors as it was the second day their price ended in the green since the start of the descent. This time the jump was bigger and managed to make up for for the last 6 trade sessions in which FEEC were moving down the charts.
FEEC gained a total of 23.26% in price in yesterday’s trade session, which started of rather slow, but as soon as the price started to go up the trading intensified and the peak volume for the day was registered between 12:30 PM and 01:00 PM. The low for the day can’t really be considered bad as it was $0.129, the price at which FEEC closed the previous session.
The total volume of the traded stock yesterday was very good with a total of 3.2 million shares that switched hands, which is well above their average of 1.26 million. The uprise in price, combined with the high volumes of traded stock managed to generate a trade value of $463 thousand making it the highest for the past month of trading.
The reason for this peak in trading is most probably the 2 most recent optimistic press releases that the company made on July 11 and July 18. The first one was concerning the recent news of China’s gas pricing reform which will increase gas prices by an average of 15% nationwide, with analyst projections pointing to an approximate increase of 25% at the wellhead. The second press release was announcing that FEEC have added 9 more new wells that have started drilling, making the total operating wells that the company has 52.
Very good news indeed, however, for now the company has to focus on being cost efficient. As we wrote in our previous article about FEEC, the revenue of $433 thousand that they made in Q1 this year is dwarfed by the huge net loss of over $8 million. A good sign is the cash they have on hand, which amounts roughly to $40 million, but then again they have $37 million in current and $57 in total liabilities which is quite a lot.
Even though their fairly good financial state we can say that until they start operating a profitable business FEEC remain a risky stock to invest in. After all aren’t most of the Chinese stocks traded in the OTC Markets risky. At least we haven’t found any information about FEEC filing false reports like we did when we wrote about China-Biotics Inc. (OTCMKTS:CHBT), who in 2008 filed reports with the SEC and the SAIC (State Administration for Industry and Commerce in China) that had huge discrepancies. This is why we advise you to do your due diligence and weigh out all the risks, especially when dealing with Chinese tickers in the OTC Markets.
One of the biggest winners yesterday was Tengion, Inc. (OTCMKTS:TNGN) who jumped a total of 55.95%, the biggest gain they have had in the 6 days in which they are climbing the charts, breaching the $1 mark with a current price of $1.31.
