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Amer Intl Pete Up 21% On Upcoming Kazak Seismic Study
By Matthew Newman
NEW YORK (Dow Jones)--American International Petroleum Corp. (AIPN) shares were up 21.4% Monday on the expected release of a seismic study of the company's oil block in Kazakstan, a company spokesman said.
The company said it expects seismic data by the end of January from two geophysical companies. The information will be used to determine how much oil is in the company's Chikuduk structure in its western Kazak block.
Engineers who evaluated seven of 16 geological structures have estimated at least 1.1 billion barrels of oil are in the concession's recoverable reserves, the spokesman said. The Chikuduk structure is believed to be the largest structure in the company's block, he said.
Keith R. Bossey, an analyst at Robert M. Cohen & Co. in Great Neck, N.Y., agreed with the company's explanation that its stock rose on the expected seismic studies.
"This stock trades on anticipation of news," Bossey said. "We saw a selloff at the end of the year, and we see a rebound from those lows."
American International's shares dipped to 3 3/16 on Dec. 31 after reaching 5 17/32 at the end of November. Shares reached a 52-week high of 7 1/8 on Sept. 30.
Bossey said the stock may also be getting a boost from the so-called "January effect," when shares that were oversold in December get a boost in January. Investors who wanted to pare their 1997 tax bills sold losing shares at a capital gains loss in December. These investors may then buy the same stock in January, pushing the price up.
Chuck Strain, an analyst at Strain Consultants Inc. in Houston, agreed that stocks such as American International usually bounce higher in January and trade on anticipated news.
"It's a rumor stock," Strain said. "The price has nothing to do with fundamentals."
Strain said his firm rates American International a buy, but only for speculative accounts. He said it's unclear how the company, which is principally an exploration firm, is going to extract oil from its Kazak block.
"Everyone agrees that there is a huge amount of oil in Kazakstan, but the question is how you get your hands on it," Strain said.
Bossey said the company needs to find a strategic partner to exploit the block. He expects the company to announce a deal with a major oil firm within six months.
The New York-based company's shares recently changed hands at 4 1/4, up 3/4, on Nasdaq volume of 514,800, compared with average daily volume of 1.1 million.
-By Matthew Newman; 201-938-2094; matthew.newman@cor.dowjones.com |
