Gediminas Jasionis
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by Gediminas Jasionis May 7, 2012
pta_chart.pngPETROAMERICA OIL CORP. (CVE:PTA) (PINK:PTAWF) had the share price increase after the company reported to have put one well on production while testing the underlying reservoir.

PTA gained 10.3% on Friday under a significant trading volume of 2.2 milion, which was 1.7 times the 90 day average of 1.3 million. The intraday action was choppy and lacked liquidity despite the large volumes of shares traded though.

PetroAmerica reported that they have begun oil production on Las Maracas-2 well in the Los Ocarros Block in the Llanos Basin, in Colombia. Currently PTA is pumping oil at a thousand barrels per day holding a water cut between 1% and 4%.

Since the rally was based on news a bullish continuation is very likely today. Still the news were only saying the company is pumping oil under a short-term test, which preludes commissioning of the Long-Term Test Facility. Because this is a temporary development, the impact of the news might as well prove to be short-lived.

petroamerica_logo.jpgOnce the facility is in place PetroAmerica plans to have a continuous production of between 1,500 and 2,000 bopd, depending on what the testing will show.

The current share price puts their market cap at $79.9 million, which is still below the net book value of the company, meaning the bullish action is should be welcomed.

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