Worthington Energy, Inc. (OTC:WGAS) Jumps Nearly Four Times on Drilling Plot News

With enough time passing after its last promotion, Worthington Energy, Inc. (OTC:WGAS) has moved into the light again, ending last week on a high note. The ticker rose more than 380% on record buying volume, as investors flocked to the energy prospecting company at underpriced 3 cents. WGAS started two years ago with vaguely active trading, aided for a while by a stock pump. But two years later, it has turned into a penny play, along with some promises of lucrative energy production.

Worthington is listed as a development stage company on the OTC Markets, and we may expect to see this status in its financial filings. Behind a market cap of just above $842,000 stand these financial data:

• $13,533 cash

• $9 million assets, including fully-valued oil and gas properties

• $7.6 million total current liabilities

• Zero revenues

• $27,88 million accumulated net loss for 8 years

WGAS is trying to refresh its image with a press release on the acquisition of a 70% interest in a drilling field in the Gulf of Mexico. As part of the hype, WGAS mentions its plot is next to that of Exxon Mobil. To finance the purchase, WGAS will rely on a loan for $8.5 million from privately held Ventana Group, LLC. The loan will be used for developing the self drilling plot and for general operating purposes, the company said.

But along with the encouraging news, the company lost two board members and its CEO, all resigning at the end of January. The resignation letters of board members Paul Jordan and Cliff Henry and Anthony J. Manson were a part of an 8-K filing, a document also containing a settlement of debt with various parties.

Given that the company has emerged from double zeroes, and the effect of losses, debt and resignations, WGAS may turn into the next short-term bet, allowing significant swings both up and down due to its underpriced stock. The positive thing is that the company’s market cap is significantly smaller than its assets, but so far the gas and oil field holdings have not proven to be profitable.

Worthington Energy was promoted way back in the winter and summer of last year, but with limited effect on the longer-term falling trend of the stock. One of the pumpers took the job for a compensation of $15,000. Stock Hideout is a known professional stock picker whose emails usually boost the chosen ticker, but let it fall to nothing afterward. An older pick, OriginOil, Inc. (OTC:OOIL) spiked in volumes significantly in November, but is down by 30% on a long slide since then. So to protect your investment, do your own due diligence of the underlying business before you pick up a stock running hot at the moment.