Boston, MA 03/10/2014 (wallstreetpr) – Riverdale Oil & Gas Corp. (OTCMKTS:RVDO) can be both spectacular and puzzling at the same time. And few oil and gas stocks can be like it. We start with the stock having lost 22.78 percent in the Friday session, having soared mysteriously in the past two days. The soar was mysterious in that no report was responsible for it as is always the case in such rally.

You now understand why this stock is puzzling – that it can be up there one minute and before you ask why it is down significantly, leaving you paralyzed at best. So then, how do you trade this stock?

Do due diligence

The simple answer is that you must first do a lot of due diligence.

There are layers of concerns around Riverdale Oil & Gas Corp. (OTCMKTS:RVDO). The company’s revenue has been on the decline. The usual line of defense that the management has gotten away with is that they are experiencing production challenge at one of their wells.

With prices being a major concern for oil and gas producers, the output volume is an important metric to decide how things play out in the quarterly or annual financial reporting. It is thus understandable that impact of strained production is eating away revenue at Riverdale Oil & Gas Corp. (OTCMKTS:RVDO).

However, not many people can tell how soon the management is going to fix its production problem. For this and many other reasons, it becomes very important to first get to the bottom of the health of the company’s prospect before putting in your money.

In the past several quarters, performance figures have not been very encouraging. For instance, as of September 2013, the company had quarterly revenue of $2,327 and net income of $136. Cash at that time was $289, current assets came in at $3,154 and current liabilities were reported at $13,898.

First of all, note these figures are not in thousands, so no mistakes in the data. Once that is understood, it is easy to see that Riverdale Oil & Gas Corp. (OTCMKTS:RVDO) has some big debt issues to deal with.

Bottom line

A lot can be said about Riverdale Oil & Gas Corp. (OTCMKTS:RVDO) and how the management is promising the best. But the bottom line is that trading this stock calls for thorough due diligence.