Nikolay Tomov
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Terra Energy Corp. Stock (TSE:TT), (PINK:TTRHF) Made a Nice Climb on a Large Volume

by Nikolay Tomov Jun 3, 2011
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Sessions like yesterday's are surely to the taste of the managers of Terra Energy Corp. The shares made a nice gain on the Toronto Stock Exchange (TSE), confirmed by a large volume. The stock (TSE:TT), (PINK:TTRHF) managed to rebound from the recent bottom. Two weeks ago, TT had fallen to a 52-week low of $0.98.

Terra_-_Chart_-_3_June_2011.jpgYesterday, the shares broke through the Upper Bollinger Band, ending at $1.13 and gaining 7.62% form the previous close. The volume of 318.5K was almost five times the average. No new company developments have been issued this week, so there are probably other causes for the behavior of the stock.

Speculative motives and shorters' activity might be possible reasons for the shares' performance. A late reaction to an earlier announcement is also a probable explanation. Ten days ago, Terra provided an update on the private equity financing, targeting development funds for the company's unconventional Montney gas play. As the corporation claims, everything is going normally and the process is "well under way".

So far, Terra has released no other fresh news after this release. The absence of information makes it not an easy task to foretell how TT will perform in the future. In such a case, we might look at the fundamentals of the company. They show positive trends, giving investors certain hope that the stock may rise further in the weeks to come:
       * In 2010, gross revenue increased by 27% to reach $79.9M, compared to $62.9M for 2009;
       * Average daily production in 2010 rose by 15.1% to 6,842 boe/d;
       * Proved plus probable reserves jumped by 31% to 31,342 mboe in the end of 2010.

Terra_-_Logo.jpgUnfortunately, the financial reports reveal enough negative figures too. This could hurt the shares' performance and press the stock for a downward move in the future. Terra recorded a working capital deficiency of $14.2M in the end of the last year. Besides, the net loss was very large - $8.7M.

The financials also show a huge quantity of accounts receivable - $14.3M. This seems a bit too much and may cause some troubles in case the corporation does not manage to collect all due amounts.

 

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