Chart: Stockwatch iPhone App

Shares in Petroamerica Oil Corp symbol $PTA dropped 8.9% to .36 cents Friday on 6.23 million shares after the company reported a dry hole at their CPO-1 prospect in Colombia, but the real story of the day was the flash crash at the open to 27.5 cents.

This looks like a stop loss induced flash crash, and an investor with a stink bid appears to have been rewarded for it. Nevertheless, the chart reminds us of the fear and fragility that dominates today’s junior resource marketplace.

Shares in PTA recovered throughout the day as buyers showed support for the company's other assets, with the average trade of the day coming in at 33.8 cents. Petroamerica's stock price is still up almost three fold since June 2012.

Research firm Raymond James indicated that the missed hole only impacted 1 cent of the company’s net asset value, and re-iterated their 45 cent price target, but clearly, some speculators in PTA wanted only success.

Haywood Securities energy analyst Al Knowles in fact called yesterday’s news "Positive", because along with the CPO-1 duster came a confirmation of the southern extension of the Las Maracas oil field (Las Maracas is PTA's core asset).

Haywood reiterated its "Speculative Outperform" rating on the stock and 55 cent price target.

Petroamerica are currently developing three oil fields in the Llanos Basin in Colombia and have other exploration prospects.

We expect to meet with management this Sunday and will publish an update here.

Read our coverage on PTA going back to August 2012 here.

 

Disclaimer: We own Petroamerica Oil Corp. shares and reserve the right to sell them at any time without notice. This is not investment advice. Please do your own due diligence and talk to a licensed investment advisor before buying or selling any security (We are not investment advisors). Also, Petroamerica's 2013 production guidance is forward looking and unrisked. Please see Petroamerica's disclaimer. All facts to be verified by the reader. These are opinions, not advice. We seek safe harbour.