Talk about undervalued — the penny stock of oil and natural gas developer Xtreme Oil & Gas, Inc. (OTC: XTOG) is having a hard time bouncing off its 52 week low. Despite having booked over $1.3 million in revenues for 2012 as of September, XTOG stock has seen its share price slide from its highs set one year ago this week; 0.339. With Friday’s announcement that the Company hired Williams Financial Group to raise capital for the acquisition of a tank truck service company, is it time for traders to invest their money in the “xtreme”ly undervalued shares?
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XTOG Stock Quote
Market Cap: 730.88K
Last: 0.016 ▲ 0.001 (6.67%)
Dollar Volume: $1,668
Issued and Outstanding: 45,680,814
14-Day Rel Strength: 37.62%
14-Day Stochastic: 17.65%
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When analyzing a penny stock like Xtreme Oil & Gas’ XTOG, a number of factors stick out, including the defaulted $2,360,000 convertible promissory note the Company issued back in September, 2011 and limited cash as of the last 10-Q filed.
Revenues, as of September 30, 2012, were down nearly -44.56% for the nine months ended compared to the same period the year prior. However, from the start of the year until September 30, the the Company’s Oil and Natural Gas Properties saw a net increase of $975,769: Additions of $1,953,188 and Dispositions of $977,419.
Although revenues were down by nearly half for the comparable nine month periods, the net operating loss was just $(422,915) compared to net operating income of $683,628. So why the slide from the 0.339 high set on XTOG stock in February, 2012?
One important item to consider is that on $2.36 million with 12% annual interest convertible note, 18% since it went into default, the structure was defined as to indicate that XTOG stock at its current price is an absolute bargain. The note states that the lender shall be entitled to convert any portion of the notes only up to the amount by which the beneficial ownership by it and its affiliates would be equal to or less than 9.99% of the outstanding shares of Xtreme Oil & Gas’ common stock.
But here’s the kicker: The notes are convertible at a fixed conversion price of $0.28 per share.
Seeing as how the Company has engaged Williams Financial Group to help them acquire financing for a tank truck service, a deal the Company had hired Southwest Securities, Inc. last month to do and subsequently terminated, it all looks like XTOG stock could be poised for an extreme break out here soon.
The 10-K and Q4 numbers are due to come out shortly and, having not diluted their stock by issuing less than 300,000 shares from September 30, 2011 to September 30, 2012, traders will want to keep a close eye on XTOG stock moving forward into the spring. Everything says that the worst is behind them and it should be clear skies ahead.
About XTOG Stock
Xtreme Oil & Gas, Inc. is a growing independent energy company focused on the acquisition, development, ownership, operation and investment in energy-related businesses and assets which, as of September 30, 2012, owns working interests in over 10,000 acres of oil and gas leases in Kansas, Texas and Oklahoma that now include 10 gross producing wells and 55 gross non-producing wells.
Last 5 Trading Sessions:
Bottom Line: With convertible debt fixed at $0.28, XTOG could see gains upwards of 1650%, if you look strictly at those numbers, making it a must add to the list of penny stocks to target. The public float is rumored to be around 4 million for XTOG which would show cause for the volume to be so low. Regardless, based on Friday’s dollar volume, turning $200 into a possible $3500 is something to look into deeper.
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