Why Shares of FX Energy, Inc. Plunged Today
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of independent oil and gas company FX Energy fell 19% today after updating reservoir results.
So what: The Tuchola field in north central Poland was found to have 20 billion cubic feet of gas in a dynamic flow test, but management warned that a pressure buildup "could indicate a somewhat higher figure." It's estimated that 60% to 65% of the gas will be recoverable.
Now what: Results appeared to be in line with what management announced earlier, so the reserves shouldn't be an issue. It could be that investors were expecting production before the end of 2016, which is the earliest management expects production. That's a long time to wait for revenue and is reason to be cautious since analysts don't even expect FX Energy to be profitable this year or next.
Three stock picks to benefit from American energy
A better bet may be midstream energy in the U.S., which benefits from fast expanding production. The Motley Fool is offering a look at three energy companies using a small IRS "loophole" to help line investor pockets. Learn this strategy, and the energy companies taking advantage, in our special report "The IRS Is Daring You to Make This Energy Investment." Don't miss out on this timely opportunity; click here to access your report -- it's absolutely free.
The article Why Shares of FX Energy, Inc. Plunged Today originally appeared on Fool.com.Travis Hoium has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.