As the market continues to stumble, AGR Tools (AGRT) holds steady, suggesting an imminent increase in market shares. Investors worldwide are waiting for this increase to occur after a recent major announcement by the company.
The company announced a few days ago that is had signed a Letter of Intent to acquire a 700-acre oil lease from Consolidated Oil and Gas in Overton Country, Tennessee. This final acquisition and operating contract may be executed as early as Friday, June 15th. If the company can hold its stock steady for the next week, then the future holds some promise for the oil and gas resource company.
AGR Tools focuses on the development, acquisition and exploration of oil and gas resources. Their mission statement is to deliver a competitive and sustainable rate of return to shareholders be developing oil and gas resources that are vital to the world’s health and wealth fare. As far as strategic goals go, the company seeks to expand their reserve base and increase the cash flow through investment and management of exploration and exploitation of new assets within the oil industry. As reported by Reuters, the privy to sign an 700 acre lease has huge implications on just how much the company can increase its cash flow.
The recent announcement to increase their reserve base by a staggering 700 acres comes at the heels of the company finalizing and securing financing to achieve their strategic objectives – namely, the acquisition of more land. The time between the two announcements was so small that industry specialists barely have had time to react. Such lack of reaction may explain why the stock has neither increased nor decreased since the beginning of the week; in other words, investors and the public are collectively holding their breath. The agreement was between AGR Tools wholly-owned subsidiary, AGR Energy Holdings, and Qeteras LTD, a UK-based investor. The agreement had Qeteras lending up to $20 million dollars to the oil company for up to 30 years.
To further add to the strength the company, AGR tools boosted its management team by appointing Scott Allen to the position of CFO. Allen is an experience oil and gas executive and was given the responsibilities of day-to-day financial management. Generally, the appointment of a new CFO results in the stock falling slightly; however, the combination of both the acquisition of more land and financing for 10 years has created a safety blanket for the company, giving Allen time to establish himself as a reliable and successful CFO. If Allen brings the success he had in his previous experience, as he is expected to do, then the company is expected to achieve its objectives in the coming years – and more.
It should be noted that AGR tools recently released its latest short sale data through until June 5th, 2012. As reported by www.seekingaplha.com, the company has approximately 63.25 million shares shorted since September 2009. This translates into close to 40% of daily trading volume as short selling.
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