Black Stallion Oil & Gas Inc (OTCMKTS:BLKG) Has Potential But Questions Remain

Are you one of those oil and gas traders, who are expecting to profit from the increase in oil prices caused by the OPEC production cuts? If that is the case, then you will appreciate the following story about Black Stallion Oil & Gas Inc (OTCMKTS:BLKG).Source: The EconomistThis company is trying to profit from "America's abundant shale oil and gas resources" by developing assets in the Alberta Basin Bakken in northwest Montana. According to the volume registered, many market participants have been purchasing shares since the beginning of 2017 when OPEC members started to reduce oil production. Have a look at the volume and note that it has increased quite a bit. In June, more than 150 million shares have been traded. Perhaps the turnaround is at hand.SourceBlack Stallion Oil & GasLet's review rapidly the business of the company. As it is still in the developing stage, the most important assets include the leases, the agreements, and the capitalized research expenses. The following are those agreements:-Lease Assignment Agreement with West Bakken Energy Holdings Ltd (100% working interest): it consists of 12,233.93 acres of land located in Montana, United States. The company agreed to pay via 1,100,000 shares of common stock to West Bakken Energy Holdings Ltd, and the shares were issued on August 19, 2015.- Lease Assignment Agreement with Hillcrest Exploration Ltd (50% working interest): it consists of approximately 6,116 acres of land in Montana. The Company agreed to issue 500,000 shares of common stock to Hillcrest Exploration Ltd, and $50,000 cash. $50,000 cash and 250,000 common shares were paid on October 27, 2015.Additionally, we found in the company documents that the company registered unproved oil and gas properties as a result of capitalized exploration costs of caring value of $850,000.Recent DevelopmentsOn December 21, 2016, BLKG stated in this press release, wherein it noted a Memorandum of Understanding for the acquisition of intellectual property:

"It has finalized Memorandum of Understanding for the acquisition of certain assets and intellectual property utilized for the establishment of a special purpose operating subsidiary collecting, analyzing, and integrating Big Data Microservices into useful information to assist in algorithmic development for the financial industry." Source

There is substantial information about the technology acquired in that press release. Investors on iHub noted that the company had entered into the Bitcoin business with this acquisition. If this is the case, then it would be great news, as this new sector is growing at a large pace, and would return outstanding revenue growth to the company. We encourage readers to check the iHub forum, as there are many market participants who became excited about the new business direction. The large volume could be explained by this new business decision.On May 8, 2017, the annual report was released and on May 17, 2017, the market got to know the Q1 2017 earnings. In the income statement included in the quarterly report, the most interesting figures were the operating expenses in consulting i.e. $292,050, which, we believe, will result into capitalized costs in the near future. Furthermore, we had a look at the balance sheet to check the working interest in oil and gas leases, and we noted its large value. The most important assets are the following ones:

• Loan to related party: $167,471
• Working interest in oil and gas leases: $850,000

Additionally, on the liability side, we found out that the most important assets are company derivative liabilities; $1,274,721. The company is developing assets and exploring. Thus, it is normal that it has large amount of liabilities. However, this amount does not seem worrying in this case.Regarding the new Bitcoin business that the company seemed to acquire, we did not find any reference to it. The company noted that it had signed a memo of understanding, which does not mean that the assets were acquired, but there are conversations. Nothing else was added apart from this text:

"On December 21, 2016, the Company announced it has finalized a Memo of Understanding for the acquisition of certain assets and intellectual property utilized for the establishment of a special purpose operating subsidiary collecting, analyzing and integrating Big Data Microservices information useful to assist in algorithmic development for the financial industry." Source

What does it mean ? Is there an opportunity?The company indicated that it would enter into a new profitable sector, but did not finalize the deal. BLKG did not communicate anything else about the acquisition of the assets, thus many market participants remain hesitant. In our opinion, when the company confirms the acquisition, the market will push up the share price. For some market participants, this may be an opportunity if the company delivers on its MOU.ConclusionThere are several good aspects about BLKG that we need to note. First of all, the company may be able to capitalize on the oil price increase due to OPEC cuts. The company has signed lease agreements to explore a considerable amount of acres in Montana, which may increase in value if oil moves higher. Additionally, the Memo of Understanding for the acquisition of certain assets in the Big Data sector may be seen as another business opportunity. If the company goes ahead and acquires those assets, the market may push up the share price. To sum up, it seems that market participants must remain vigilant, thus we encourage readers to sign up. We will be updating our subscribers as soon as we know more. For the latest updates on BLKG, sign up below!Disclosure: We have no position in BLKG and have not been compensated for this article.