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Shares of Scirocco Energy PLC (LON: SCIR), formerly known as Solo Oil, soared 89.1% despite not making any announcements today.
We can track the rally to the gains made by Helium One, a primary helium exploration company in which Scirocco owns a 4.9% stake, which surged over 18%.
Scirocco also owns stakes in other assets in Tanzania, such as the Kilwani North development, in which it owns an 8.9% stake. The company intends to reinstate gas production at the well located in this region.
Lastly, the firm owns a 25% working interest in Ruvuma PSA located in Southern Tanzania, a region with significant gas discoveries. The petroleum sharing agreement (PSA) was granted in 2005, followed by initial gas discoveries in 2012.
The lack of news related to its other assets implies that Helium One’s rally solely drove today’s rally, but only time will tell.
Investors who are worried about missing out on today’s rally should refrain from opening any new positions at current prices, given that parabolic rallies are typically followed by significant pullbacks that erase most of the prior gains.
The current price also does not represent a reasonable risk to reward setup given the high likelihood of a future pullback.
We’ll update readers as soon as we have any new developments regarding Scirocco Energy.
Scirocco Energy share price.
Scirocco Energy shares soared 89.09% to trade at 2.08p, having risen from Wednesday’s closing price of 1.10p.
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