Perkins Oil & Gas Inc (OTCMKTS:PEKN) Set To Fly Higher

Today, we need to address again Perkins Oil & Gas Inc (OTCMKTS:PEKN), the oil and gas company. Our readers will remember well our last piece on this name called "Here’s What Happened With Perkins Oil & Gas Inc (OTCMKTS:PEKN)". Image from Perkins Oil & Gas Inc OTCMKTS:PEKNWe said that the share price of PEKN was showing large volatility, as it is usual with oil and gas stocks. We also noted for those individuals who appreciate large swings and a lot of price action that this was a name to follow closely.We were not wrong in saying so. The company is doing it again.From trading close to $0.10, the share price increased to touch the level of $0.30.Additionally, the volume, which is a clear indicator of market interest, spiked up as well. More than 0.5 million shares changed hands some days.Have a look at the following chart before we provide more details on what seems to be going on: 1 month chart for PEKNLet's revisit rapidly the company for those who don't know PEKN. Perkins Oil and Gas, Inc. is focused on oil and gas exploration and development at US-soil projects. It is building a portfolio of oil and gas leases in the areas which allow low cost-per-acre acquisitions. It is headquartered in Dallas, Texas.Recent DevelopmentsThe most exciting news was released on December 6, 2017. The company noted that it had participated in a government lease auction and successfully purchased 160 gross acres in Lincoln, Colorado.The announcement seemed to make the share price creep up in a few sessions.The new agreement carries a 1/5th royalty rate and is located on the Niobrara formation. According to the press release, some analysts noted that the recoverable oil reserves are approximately 2 billion barrels.But, there is more.There is also liquid natural gas in the formation acquired by PEKN.Sonny Arandia, CEO of Perkins, celebrated the news. He was quoted:

"We are very excited to have acquired this lease which I believe holds a lot of potential." We expect to begin formulating a drilling plan in January of 2018," Source

Please note that the company is expected to have a drilling plan for January 2018. We will need to be very alert, as new information will be provided in January and the market could react by pushing up the share price even more. Financials and NOLsReaders will be able to find the state of the balance sheet in the last quarterly report released. We will not waste time in checking every aspect of the company and will point out only the most significant assets.In our opinion, the most significant, apart from the exploration rights purchased from the state, are the net operating losses that the company exhibited in its financial accounts. They are tax deductible, which means that once the company starts to extract oil, the taxes to be paid to the state will be almost zero for some time.Read the following in this regard:

"The Company has approximately $133,131 of net operating losses (“NOL”) carried forward to offset taxable income in future years which expire commencing twenty years from when incurred. In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized." Source

The Float is very reduced - A lot of volatility can be expectedAs we said, the company engages itself in an activity that is quite speculative, which makes the share price move quite a bit. We mentioned this in our previous coverage.But, there is something else that increases the share price volatility.The float is very reduced. This means that the amount of shares owned by the public is quite small, so there is limited amount of shares in the market. Large market orders can move price violently. We found this information through deep research in the company materials, which readers can consult here.The OTC Markets is not disclosing this information, thus only those who read our articles will get to know this feature: Share Capital Stats from Perkins Oil & Gas Inc OTCMKTS:PEKNConclusionCurrently trading with a market cap of $2 million, PEKN is an interesting story among small caps. We appreciate not only that the company is releasing good announcements, we also like that market participants are getting to know that the company is working in the right direction. That's the impression that we get from the amount of short sellers on the stock. Have a look, they are reducing their positions. This is good news as well.DateShort Interest% ChangeAvg. Daily Share VolumeDays to CoverSplitNew IssueNov 15, 201732,628-33.8330,8651.06NoNoOct 31, 201749,31178.40155,3851.00NoNoSourceTo sum up, there's a lot to like with PEKN and better days are ahead.We will be updating our subscribers as soon as we know more. For the latest updates on PEKN, sign up below!Disclosure: We have no position in PEKN and have not been compensated for this article.Image courtesy of rocor via Flickr