It isn't very often that we alert members to a oil and gas company that doesn't drill or explore. It's even more rare to find an opportunity like this trading for about .02 -- today is one of those times.
Today's alert company: U.S. Oil and Gas Corp (USOG)
USOG's fortunes are inextricably linked to the oil service sector but they neither explore for nor produce oil. USOG is a holding company that has a growth strategy that is focused on using the power of acquisitions and their own proprietary technology to create value for itself and its shareholders.
The company is embarked upon a strategy of acquisition of EXISTING oil service firms AND commercialization of patents and proprietary technologies in the oil and gas industry.
Their corporate strategy involves several initiatives:
- Acquisition of existing and profitable small to mid-sized oil and gas services companies - Their strategy is to acquire profitable family-owned companies with a strong growth history, capable management willing to stay on board for minimum two years, and strong balance sheet with little or no debt.
- Development of proprietary oil and gas exploration and extraction technologies - USOG currently has filed two patent applications for technology that it has created.
USOG's first acquisition, Turnbull Oil, generated $16.5 million in revenues and $447,000 in EBITDA for 2008. USOG is very bullish in regards to its subsidiary, Turnbull Oil, and expects it to post 2009 numbers that are better than 2008 and intends to fold several local acquisition targets into Turnbull.
USOG's second acquisition (United Oil and Gas, Inc.) is expected to be finalized in the next few days. United Oil and Gas is a North Dakota-based distributor of refined fuels and other oil-based products. Revenues at United are expected to total $8 million for the year ending December 31, 2009, with steady growth moving forward.
The company's second initiative is in the area of commercializing oil service technology that the company either creates or acquires. The company plans to use these and other technology in their pipeline for their own oil service operations and also offering them for sale or licensing.
USOG currently has two patent applications for the following:
- Simple Fiberoptic Seisometer for Rugged Environments - The company believes this technology has the ability to reduce the cost of seismic sensor arrays, having the fidelity and reliability necessary for permanent downhole and seafloor installations. The advancement could make "big oil" techniques for oilfield production management and exploration techniques available to middle market producers.
- Leveling System for a Portable Drilling Rig - The technology is designed to save setup time and increase precision drilling efficiencies with the smallest footprint to minimize environmental degradation.
Listing Upgrade for USOG
The company plans to upgrade its exchange listings and is in the process of filing with the SEC for listing on the NASD over-the-counter (OTC) exchange. The company states that they will work towards increasing market awareness and will move the stock to a higher profile exchanges. Filings are expected to list the company’s stock on the American Stock Exchange (AMEX) after move to Bulletin Board (OTCBB).
If you like getting in on the bottom of the trade and riding it higher then you'll love this chart!
- Volume has increased dramatically for USOG in December. It appears that the stock is under accumulation again after tax-loss selling in December;
- The stochastics back up the volume indicator as the oscillator has exited oversold status and is on a bullish trend;
- The stock has minor resistance levels at the 3 and 4 cent levels;
- The MACD is also showing an uptrend and looks like it could cross the "o" line if this trend continues. That is crucial because a weak bearish signal then becomes a bullish signal.
We think that USOG is a GREAT way to start the New Year. Do your due diligence and be ready to trade.
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