Here's What Happened With Perkins Oil & Gas Inc (OTCMKTS:PEKN)

What happened with Perkins Oil & Gas Inc. (OTCMKTS:PEKN), the oil and gas operator? Company LogoThe stock declined sharply in the last two months. From the share price level of $6, the stock trended down to $1. Additionally, the amount of shares that changed hands in this time was very low. Almost everyday, the trading volume was less than 200 thousands shares, while the share price was declining with each passing day. This shows that the market interest for the stock declined quite a bit recently.Have a look at the recent share price action before we provide more details about what can be going on: 1 month chart for PEKNRecent Developments - Short sellers seem to be operating in the stockLet's revisit the announcements made recently by this exploration-stage company, based in Dallas, Texas.On September 5, 2017, the company noted its participation in a government lease auction. The company purchased 80 gross acres in Renville County, North Dakota. It seems that the market pushed up the share price as a result. From approximately $1.35, the company went up to $4 in a short period of time. Some traders profited close to 200%, which is not bad.The story did not seem to end there. On September 14, 2017, PEKN again released new information. It was another purchase; a 640-acre oil and gas lease located in Niobrara, WY. It was noted that it had been acquired from the State of Wyoming and carries a 16.67% royalty rate on both oil and gas. As it was noted by the COG Association, the Niobrara formation holds approximately 2 billion barrels of recoverable oil.The Chief Executive Officer of Perkins Oil and Gas was quoted:

"Two of the most notable wells: The Jake and The Gemini, produced more than 1,000 barrels per day when they were completed. We are excited at the potential our new lease could hold " Source

The market again pushed the share price. This time, we believe that the market became excited and the share price went to illogical levels, as high as $6.80.We believe that the announcements were good. They show that the company is growing by acquiring new oil exploration and development rights. Thus, the market was right for celebrating them until certain point.We need to remember that the company is still in the exploration stages and finding oil is an speculative activity. Volatility risks are always involved in such type of stocks.Is there something else?Yes, we believe that short sellers have been operating in the stock. According to the OTC Markets, which is in charge of showing all the financial information in this case, short interest recently increased:DateShort Interest% ChangeAvg. Daily Share VolumeDays to CoverSplitNew IssueAug 31, 2017202405.001,4551.00NoNoAug 15, 201740100.005,8881.00NoNoSourceIn our opinion, the unethical behavior of these market participants could have pushed down the share price. If we take a look at the stock chart shown before, we see the typical short selling pattern.On September 19, 2017, short sellers seemed to accumulate large short positions at $6 and $5. Please check that the volume increased that day and note how their activity pushed down the share price in the days that followed. Then, on October 10, 2017, these unethical market participants seemed to acquire shares at $1. Check again that the volume increased that day.Finally, please note that the company did not release any new announcement in September and October that could justify the share price action.ConclusionCurrently trading with a market cap of $8.5 million, PEKN has delivered outstanding returns to some market participants while others lost money. It is quite normal for a speculative stock showing large share price volatility. Crude oil explorers usually show this type of market performance.Additionally, it is a stock with $668 in cash, and $57,856 in total liabilities. Thus, even if the company acquired profitable fields, money will be needed to fund the drilling and production activities. Speculative companies of this type tend to move quite violently, as it happened with PEKN.We will be assessing the company's new announcements and monitoring the market activity for our subscribers.We will be updating our subscribers as soon as we know more. For the latest updates on PEKN, sign up below!Image courtesy of Robby Virus via FlickrDisclosure: We have no position in PEKN and have not been compensated for this article.