Gediminas Jasionis
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Emerald Bay Energy Inc. (CVE:EBY) (PINK:EMBYF) Goes Up Nicely

by Gediminas Jasionis Jan 13, 2012
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eby_chart.pngEmerald Bay Energy Inc. (CVE:EBY) (PINK:EMBYF) stock price rocketed up after the company announced to have successfully cased their first well on the Texas property.

EBY stock price shot up another 33.3% on Thursday, committing to the move from a couple of sessions before that. The trading volume dropped though and was only 2.5 times larger than the average of 196 thousand, which was merely a shadow of the spikes seen during the previous sessions.

EBY price now got higher than its 200-day moving average and could find support at this level. Profit taking had taken the best of EBY on Wednesday but didn't manage to bring it down eventually, which is another bullish sign. Over the past three sessions EBY rose a total of 60%.

Emerald said on January 10 the company cased an exploratory well in Guadalupe county, Texas. Perforation and testing is to come next.

emerald_bay_energy_logo.jpgWith this latest increase in share price the company now holds a market cap of 3.3 million, but has a book value of negative 634 thousand. The business struggles with working capital holding deficit of $3.95 million. Emerald survives by selling increasing amount of debt and some capital stock to support their operations every quarter.

Before the move their stock price had bottomed out and consolidated around 2.5 cents per share. Stock's liquidity is very poor, which gives an explanation of why such news, lacking operational and financial detail, caused such a large price increase.

During the first quarter of 2012, the company plans to drill a total of six or seven wells, thus a sudden selloff isn't very likely.

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