Elite Group Inc (OTCMKTS:ELTZ) On The Verge Of A Breakout

Elite Group Inc (OTCMKTS:ELTZ), a service provider to the oil industry, is on the move at the moment after the change of its name and business objective. The company hired investor relations consultant firm, The Olibri Group, which will help the company in communicating to the market in a befitting manner. Additionally, and most importantly, the company put out that it had signed a letter of intent ("LOI") to acquire 75% working interest in 2 wells in the Permian Basin of Texas. We will assess the new info in this piece. Have a look at the recent price action of the stock, and note that the volume is picking up.SourceElite Group and its New DevelopmentsElite Group focuses on the acquisition of water properties for the oilfield service sector, primarily in the Eagle Ford, and the Permian Basin in the United States. Is this activity very relevant for the oil and gas industry? Yes, we have already explained it with the following words in another piece:

"Oil companies need to store millions of gallons produced due to the hydraulically fracture system used. Additionally, this water usually contains chemicals that are extremely dangerous for the ecosystem. Obviously, in every country, there are mandatory recycling policies that oil and gas operators need to respect. ELTZ will be monetizing these needs." Source

On June 20, 2017, the company signed a letter of intent to acquire two wells and to lease 160 acres of land in Gaines County. Additionally, the agreement offers the possibility of drilling more wells in the area. The press release also noted that closing of the acquisition will be quick. Hence, we encourage market participants to stay alert on this name. A letter of intent does not mean anything. The market should push up the share price when a purchase agreement is signed. Terrence Tecco, ELTZ CEO, explained in the following words:

“We feel that this project fits perfectly into our overall growth strategy. We have arranged for non-toxic funding for the wells, which will have a positive impact on our bottom line, and be good for our shareholders.” Source

The company is buying the working interests in one of the oldest oil fields in the US; the Permian Basin, located in Western Texas, and Southeastern New Mexico. Oil and gas engineers have been operating there since 1925. It is estimated that the total production of the area is over 29 billion barrels of oil and 75 trillion cubic feet of natural gas. Is the company serious about communicating its developments?That is the good part of ELTZ. On June 1, 2017, the company presented its new investor relations consultant, The Olibri Group. The service that the company will bring includes the dissemination of news to shareholders via Twitter, and Facebook. Social media is becoming extremely important in the new digital era. ELTZ has done a very good job by hiring this firm.Market reaction and ConclusionSourceThe share price did not react to the hiring of the IR firm. We believe that the work of the consultant may make the share price creep up, as new market participants will be able to get to know the operations of the company. The LOI to acquire the two wells did make market participants react. On June 20, 2017, more than 20 million shares changed hands. In our opinion, the market is still waiting for the confirmation of the acquisition. ELTZ needs to negotiate a purchase agreement. Once this document is out, the share price may jump much more. Hence, stay alert.To sum up, the company is making interesting steps, and is also communicating a lot to the market, which is very good. Day traders, who were able to stay alert on the company news, should have seen tremendous returns on this name. Hence, we encourage market participants to follow the company or to subscribe to our distribution list for new developments. Good news is usually followed by more good news. We will be updating our subscribers as soon as we know more. For the latest updates on ELTZ, sign up below!Image courtesy of FlickrDisclosure: We have no position in ELTZ and have not been compensated for this article.