Exploration and production company with South American connections ready to rally
At least Gran Tierra Energy (AMEX: GTE, Stock Forum) is not a penny stock any more. As a matter of fact, it has moved from a 52-week low of 90 cents to $6.60.
GTE's business is oil exploration and production in South America. Sounds like there may be a lot of competition. But the company had a good Q1. Revenue for the three months ended March 31, 2008 was $20.8 million as compared to $4.5 million for the same period in 2007. Net income increased to $4.7 million compared to a loss of $6.7 million last year.
Production in Colombia pushed revenue higher. The increase in oil to over $80 per barrel from $46 helped. If world oil prices keep rising, GTE could be in for an even better ride. There was a little bit of negative news in the quarter. The company had to restate some financials from previous years, but the issue seems benign.
GTE has a big positive in the rising price of oil, and a big negative in terms of its modest size. It only has $18 million in cash. But, with a market cap under $700 million, another good quarter or two could push the share price up further.