U.S. Driller That Produces 70 Barrels a Day Soared Nearly 1,000%
(Bloomberg) -- An obscure company that employs five people and appears to produce negligible amounts of oil and natural gas from some wells in Appalachia slumped Friday, one day after soaring almost 1,000% in the latest Reddit-fueled day-trading craze.
New Concept Energy Inc. dropped as much as 54%, triggering circuit breakers. The Dallas-based company was the focus of a trading frenzy Thursday after mentions by retail traders on the WallStreetBets forum on Reddit, just as brokerages including Robinhood Markets clamped down on trading in other shares such as GameStop Corp. after some of the wildest stock swings the markets have seen in recent years.
The resultant 959% rally thrust into the spotlight a company that had previously attracted minimal attention. Filings show New Concept Energy produces a mere 70 barrels of oil equivalent a day and has a board whose average age is 74. Gene S. Bertcher, who serves as the chairman, principal executive officer, president, and chief financial officer, earned $56,500 in 2019. The company didn’t respond to requests for a comment.
New Concept Energy is the successor-by-merger of Wespac Investor Trust, and the company was incorporated in 1991 as Medical Resource Companies of America. At the end of 2019, it had 153 producing gas wells and 44 non-producing wells, with mineral leases across 20,000 acres, according to filings.
The company lost 46 cents a share on revenue of $590,000 in 2019, according to its annual report.
Shares of New Concept Energy were down 53% to $11.84 as of 11:08 a.m. in New York, giving it a market value of about $62 million.
Short interest in New Concept Energy has fallen to 0.3% of its float from 13% earlier this month, according to data from S3 Partners.
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