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Quest Oil Corp. (PINK: QOIL.pk)

On Friday, August 06, 2010, Quest Oil announced that it successfully completed the acquisition of B&B Oil, Inc. In an all share exchange transaction, Quest Oil acquired all of the outstanding shares of B&B Oil, a private, independent oil and gas exploration and development company based in Fredericksberg, Texas. Quest Oil now holds a 100% equity interest in and title to B&B Oil’s assets.

In management’s view, B&B Oil’s assets in the Midkiff and Hawkeye Fields in Texas are economically attractive and geologically sound properties that have significant upside development and revenue potential. From 2007 to the present, B&B Oil acquired oil and gas leases that consist of approximately 560 acres in Quest Oil Corp. (PINK: QOIL Hawkeye QOIL.pk Field and approximately 398 acres in the Midkiff Field in Eastland County, Texas. These properties include wells that are currently productive, and numerous prospects that management believe warrant further exploration and development. Productive wells on the leases will require relatively modest capital expenditures to generate cash flow from production.

Quest Oil‘s goal is to proactively minimize risk by teaming with experienced exploration companies and project operators, and leverage their local experience and knowledge. Quest Oil seeks to strategically build wealth from mature prospects with proven reserves. Accordingly, QOIL.pkwe plan to maintain an aggressive M&A growth strategy, which will include the acquisition of small to mid-tier oil and gas exploration companies with significant growth potential. Quest Oil believes that there is significant opportunity in the acquisition of mature prospects in mature oil fields that generate smaller output. The major oil companies and the large independents have divested  Quest Oil Corp. (PINK: QOILof these assets in favour of larger potential oil and gas plays, even though these prospects possess significant proven reserves. With the strength in oil prices, and with gas prices steadily improving, there will continue to be ample opportunities for smaller independent companies such as Quest Oil to acquire and develop these mature petroleum leases and to build significant production volumes and revenues.http://thepennytrade.com

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The oil and gas pipeline sector tacked on a remarkable 2.21% gain on a day the S&P 500 gained a mere .40%, making these companies some of the biggest movers on Wall Street today. The gain comes in light of June spot prices on natural gas climbing since last May, rising $.18 per million Brittish thermal units, or mBtu, and a gain on oil prices hovering around $75 to $80 per barrel intraday. We spoke with Chris Jarvis, he’s an expert on natural gas and oil production companies and president of Caprock Risk Management, a fund that offers derivatives and options trading and hedging solutions for the world’s oil production companies. Our video interview with him will be posted by tomorrow afternoon. In it, we talked about what will happen to natural gas and oil prices should we experience another aggressive hurricane season like we did back in 2005. Check out the video to see what he says.

In the meantime, here are some companies that moved on the back tail of the spot price movements in oil and natural gas in light of BP’s catastrophic failure in the Gulf that are in our focus. Could investors be tired of humungous, large-cap companies and their politics?

Bronco Drilling Company, Incorporated (NASDAQ: BRNC) $110M (MarketCap) closed up $.47, or 13% at $4.05 a share. Bronco provides contract land drilling and work over services to the oil and natural gas exploration and production companies in the United States.

Royale Energy, Inc. (NASDAQ: ROYL) $23M (MarketCap) closed up $.18, or about 9% at $2.25 a share. An independent oil and natural gas producer, whose main lines of business are the production and sale of natural gas, acquisition of oil and gas lease interests and proved reserves, and drilling of both exploratory and development wells. In May, the company reported improved quarterly results.

Gasco Energy Inc (AMEX: GSX) $45M (MarketCap) closed up $.05, or 14% at $.415 per share. A natural gas and petroleum exploitation, development and production company which is engaged in locating and developing hydrocarbon resources, mainly in the Rocky Mountain region, the company’s shares jumped more than 9% in the last 90 minutes of trading.

Kodiak Oil & Gas Corp (AMEX: KOG) $414M (MarketCap) closed up $.21, or 6% at $3.48 a share. An independent energy company focused on the exploration, exploitation, acquisition and production of natural gas and crude oil in the United States, Kodiak announced late May 2010 of a new credit facility that will allow the company to implement its growth and expansion plans over the next few years.

Cubic Energy Inc (AMEX: QBC) $67M (MarketCap) closed up $.06, or 6% at $1.06 a share. Closely covered by WMM Editor’s Desk for some time now, the company is in our MicroCap Index for showing great potential for growth and acquisitions. Cubic, engaged in the development and production of, and exploration for, crude oil, natural gas and natural gas liquids, yesterday held a shareholder call we were on that outlined growth plans going forward now that the company is cash flow positive. Read our article here.

To view this article at World Market Media click on the link below: http://www.worldmarketmedia.com/779/section.aspx/1719/post/smallcap-oil-gas-pipeline-sector-plays

Disclosure: no positions 

To view this article at World Market Media click on the link below: http://www.worldmarketmedia.com/779/section.aspx/1719/post/smallcap-oil-gas-pipeline-sector-plays

Disclosure: no positions

- About the Author:   About World Market Media:WorldMarketMedia.com (The Global Online Investment Community) is a high traffic stock market, news data website providing cutting edge new media products and services to publicly traded companies worldwide. Our Editor’s Desk authors insightful real-time coverage on the economy, the capital markets and their listed companies.     Article Source