GGR: GeoGlobal Resources Inc [was GEOG was BOWG] (2000 + ): GeoGlobal Shares Plunge on Bearish Note

» Kirk - GeoGlobal Shares Plunge on Bearish Note

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GeoGlobal Shares Plunge on Bearish Note
Friday January 6, 12:46 pm ET

GeoGlobal Resources Shares Drop 28.3 Percent After Analyst Says Assets Don't Justify Stock Price

NEW YORK (AP) -- Shares of GeoGlobal Resources Inc. plummeted Friday after an analyst said the oil and gas company's assets don't justify the price of its stock -- which made a spectacular run in 2005, soaring from a penny stock to close to $15.

Canada-based GeoGlobal's resources are focused primarily on the Indian subcontinent, where the company has both oil and natural gas prospects.

According to Jefferies & Co. analyst Leo P. Mariani, GeoGlobal has had limited success in its onshore properties, and the likelihood of large discoveries is low. Offshore, the company discovered India's largest gas reservoir, but to date, only one well has been drilled. Meanwhile, low gas prices in India, long reserve life and the company's 5 percent net revenue interest limit it in the near term.

"We believe that there is a lot of potential in the Company's properties, but there are currently no reserves booked, no production, and no cash flow," the analyst wrote in a note to clients.

Mariani initiated coverage of the company with an "Underperform" rating and $7 price target.

GeoGlobal shares plunged $3.97, or 28.3 percent, to $10.05 in midday trading on the American Stock Exchange. The stock traded at a low of 77 cents a year ago and climbed to a recent 52-week high of $14.92.

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-- posted by Kirk