Circle Star Energy: Will It Ever Recover?

Circle Star Energy (OTC: CRCL) has steadily declined by over 23% over the past week, consistently shaving off investors’ returns for not only this week, but also the entire year of 2012. Since New Year’s Day, Circle Star Energy has dropped over 34%.

Circle Star Energy opened today’s over-the-counter trading at a share price of $1.52. By afternoon trading, the price had dropped precipitously to close at $1.34. Although over-the-counter trading is not typically affected by macro concerns, domestic stocks lost today as investors responded to the uncertainty that continues to swirl over Europe.

Circle Star Energy’s stock has failed to produce an attractive chart at the over-the-counter market since April 4, 2012, when it hit a peak share price of $2.72. Available statistics show that Circle Star Energy has had a total loss for almost all time periods in 2012. Today’s trading is no different, with an intraday loss of 11%.

Circle Star Energy recently announced that it intends to raise $750,000 of equity. It issued 500,000 units at a value of $1.50 per unit for gross earnings of the total number. Every unit is comprised of one share of ordinary stock and one-half share of an acquisition warrant. Every full warrant can be applied to get one share of ordinary stock of the business at an exercise value of $2.75 through May 15, 2015.

Circle Star Energy’s recent equity raise is concentrated on the payment of its capital acquisition needs, debt obligations and general corporate purposes. However, the company’s shares, units, warrants, and financial underlying shares have not been registered under the U.S. Security Act or state security laws. Accordingly, they are defined as “restricted securities” and cannot be sold or offered an applicable exemption.

Circle Star Energy is a publicly-listed energy company focused on the exploration and production of gas and oil properties. Located in Houston, Texas, the company’s possessions include non-producing and producing gas and oil mineral interests, non-operating working interests, and royalty interests in gas and oil products situated throughout the state of Texas. Circle Star Energy was formally known as Digital Valleys. In July 2011, the company’s name was changed to Circle Star Energy due to its expanded strategic focus incorporating the oil and gas industry.

Circle Star Energy is currently focused on obtaining and developing two separate, approved portfolios of gas and oil interests. Both of these cases are aimed at fields and basins that produce industry top financial proceeds.

Following a three-day Memorial Day holiday weekend, we still wonder where Circle Star Energy will go from here. Will the company’s recent drop level off and begin climbing again, or will the share prices continue to descend? The next few weeks will remain crucial to the company’s future.

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Published by Fiona Gibson

Fiona is a finance graduate and an expert in analyzing market trends.