Treaty Energy (TECO) Stock Up 100% In 4 Days. Now What?

As if investors did not realize that the penny stock of Treaty Energy Corp. (TECO) has doubled since June 28th, the Company regurgitated news to make sure. TECO stock price has rallied exactly 100% from its low of 0.0225 on June 29th to 0.045 Tuesday with volume increasing slightly since. The share price of Treaty Energy Corp. is right around the same level they were at the end of January when they first struck oil at their San Juan #2 well in Belize. So what to expect now that they drilled to a depth of 1,440 ft?

After topping out at 0.13 on volume of 46.38 million the day of the announcement, share prices in TECO plunged to 0.0455 two days later on volume of 47.20 million shares.

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TECO Stock Chart

Market Cap: 33.19M

as of June 20, 2012:
Outstanding Shares: 737.45M

Treaty actually did produce some revenues since that oil strike in Belize. On June 28th when TECO began its recent rally, the company reported that for the 3 months ended March 31, 2012, Treaty had $57,016 in revenues from their recent Texas acquisitions versus $ -0- for the same period in 2011. That’s all nice but in 2011, TECO entered into an agreement with an investor to sell a 5% permanent royalty and a 15% temporary royalty to be paid until production reaches 200 barrels per day for $600,000. So curb your enthusiasm as to how quickly TECO can become a money maker.

About TECO Stock

Treaty Energy Corp., an international energy company, is engaged in the acquisition, development and production of oil and natural gas. The Company acquires and develops oil and gas leases which have “proven but undeveloped reserves” at the time of acquisition. These properties are not strategic to large exploration-oriented oil and gas companies which allows Treaty to develop and produce oil and natural gas with tremendously decreased risk, cost and time involved in traditional exploration.

Click here to view the SEC filings for TECO.

Bottom Line: The penny stock of Treaty Energy Corp. should begin to see a pull back here today with some profit taking. TECO is trading right at that hangover price after the strike oil party and should be viewed as a swing trade from here on out.

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