Whoa, talk about impressive single-day returns! Shares of MDM Permian (OTCMKTS:MDMP) have soared more than 200% intraday on speculative fervor among investors. Investors in MDMP stock appear to be bullish on this tiny player in the oil and gas drilling business in Texas’ Permian Basin.
Indeed, over the past two days, shares have moved from the 2-cent level to more than 70 cents per share as investors continue to pile into this trade. Any 35-bagger over a couple days deserves a closer look.
Here’s what’s been driving this stock higher these past couple days.
Field Work Update Giving MDMP Stock a Lot of Attention
Yesterday, MDM filed a Field Work Update with OTC Markets that has gotten a lot of investor attention.
This release highlights movement on the company’s Lindley ‘A’ Lease wells. The company moved a rig onto one of the wells, and ran pressure tests for holes at shallow depths. The initial results appear to be positive. Additionally, investors like the fact that the company is moving on commercializing the reserves discovered on this property.
According to a study the company did last month, the Lindley property has two reservoirs with approximately 3.6 million barrels of recoverable oil on 640 acres. At a market price of $65 oil, the company calculates these reserves to be worth $568 million.
Additionally, the company is quick to point out that these results are only for two zones. Other proven zones are not included in these numbers.
The recent progress made to commercializing these wells has speculators believing MDM could be close to capitalizing on this property. MDM could ultimately produce the oil itself or contract production with a third party. Regardless, these reserves appear to be ready to be monetized.
After the recent run-up in MDM shares, the company’s market capitalization now sits at roughly $160 million. Given the scope of this discovery, it appears investors are pricing in some pretty bullish near-term expectations with this company right now.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.
