Gediminas Jasionis
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Africa Oil Corp. (CVE:AOI) (PINK:AOIFF) Finds Oil, Share Price Skyrockets

by Gediminas Jasionis Mar 27, 2012
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1aoi_chart.pngAfrica Oil Corp. (CVE:AOI) (PINK:AOIFF) stock price gaped up after the company found some oil in a Ngamia-1 well in Kenya.

AOI share price gaped up 42.5% on Monday under a trading volume of 8.2 million which was ten times the average of 760.8 thousand. The price action for the day formed a doji candle though, showing indecision.

That's quite natural when the news was great but will not have an instant effect on the company's financial situation. Plus, there were a lot of traders who used an opportunity to take profits from this massive price jump.

The stock price mainly jumped up because of the findings in Ngamia-1 well, which is owned under a partnership with Tullow Oil Plc. (LON:TWL). More than 20 metres of net oil pay and movable oil was found in the well as announced on Monday.

Amidst the commotion on the stock market Africa Oil issued a further notice, stating they expect to drill five wells in the Kenya-Ethiopia tertiary basin over the coming 18 months.

0africa_oil_logo.jpgLast Friday the company also announced their financial and operating results for the year 2011. Expenditures for the period were $11.2 million, double the ones incurred in 2010. The amount of outstanding stock has increased 2.3 times. The company still has $109.6 million in cash, so undoubtedly they can work with full efficiency when exploring the oil properties.

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