Reach Energy Bhd (-ve)
Trading of shares in Reach Energy Bhd (fundamental: 0.8/3, valuation: 0.9/3) triggered our momentum algorithm yesterday for the seventh time this year.
The stock closed up 5.5 sen or 12.5% at 49.5 sen, giving it a market capitalisation of RM632.52 million, after 64.68 million shares were traded, much higher than the counter’s 200-day average volume of 4.29 million shares.
Last Friday, the oil and gas group’s producing asset in Kazakhstan, Emir-Oil LLP, obtained authorities’ approval to commence trial production of the North Kariman field in Kazakhstan for 15 months, starting yesterday until Dec 31, 2019. The approval granted for the trial production allows Emir-Oil to put the North Kariman wells into production, and this is expected to increase current oil production levels substantially.
Reach Energy said the approval of the trial production provides a clear signal from the authorities to the company to proceed with the processes required to obtain a new production contract for the North Kariman field.