Is ESP Resources Gushing Over Oil Prices? (ESPI)

Does the rising tide in oil prices lift all boats? In the case of ESP Resources (OTC: ESPI) the answer appears to be “yes”. Shares of the oil and gas exploration company have surged nearly 100% since the first week of July, moving from a 52-week low of $0.077 to a session high of almost $0.18. During the same time frame, crude oil has rallied over 15% and even more when compared to pricing in euros. The recent move in share prices threatens to tap the annual high of $0.20 established 10 months ago in October. Volume over the last month has gushed like an Oklahoma well bubbling with “black gold”.

ESP Resources announced this morning that it had completed the filings and documentation necessary for the company to receive contracts related to a joint venture with Komo Umbrella Joint Venture Limited for work on the Komo international airfield. The company, through its subsidiary ESP KUJV Limited, expects to receive contracts within the next 60 days. ESP Resources also expects a significant addition to revenues from the project.

Despite the news, the stock traded fairly flat today. The stock opened unchanged from yesterday’s close. Almost half of 1.4 million shares traded on the day exchanged hands in the first 30 minutes. On an average day, the stock trades around 350,000 shares. After they had digested their lunch, buyers perked up and lifted shares from an intraday low of $0.16 to a session high of $0.18. The stock ended the day with a fractional gain to close up 2% at $0.176. Considering the indifferent reaction to the news, traders must ask whether the story today was already baked into the stock.

In other news, the ESP Resources released its revenue guidance for the second quarter. The company expects revenues to come in between $5.5 million and $5.7 million.

Several stock promoters were out touting the stock today. Lion Penny Stocks said, “ESP Resources saw significant top-line growth in the first half of 2012.” Penny Stocks SMS Publisher added, “I believe ESPI is going to rock this morning!” A total of eight promotions can be read on Stockpromoters.com

On Twitter, others were also talking about ESP Resources. @MakingIT11 chatted about the stock as well as @OTCStocksPick1.

ESP Resources focuses on acquiring and developing oil and gas properties. Through its wholly owned subsidiary, ESP Petrochemicals, the company is formulator for specialty chemicals used in the energy industry. The company was founded in 2004 and is located in Scott, Louisiana.

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Published by Alan Masterson

Alan has over 25 years of trading experience in the U.S. equity markets. He began his career in finance working on a program trading desk specializing in over-the-counter stocks. His career progressed from that point to his current position as senior trader on an institutional trading desk. In the evenings, Alan teaches economics at a local community college. He has contributed articles to various publications over the last six years, including feature articles for an economics magazine and various financial blogs. You may contact Alan via his email (alanmasterson@wallstreetpr.com) or his Google+ page (https://plus.google.com/103338576216002376250).

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