By: Tomas Ronolski - AllPennyStocks.com News

Thursday, July 28, 2016

It has been a mixed year for oil & gas producers. The year began on a disastrous note as prices slumped on global growth worries and concerns about oversupply. However, in February, oil prices saw a sharp recovery. The recovery was driven mainly by supply outages in several producing countries, including Canada. What also boosted prices was improving fundamentals. Indeed, the supply outages, coupled with strong demand from non-OECD countries, led analysts to give bullish calls on oil. But they may have been premature.

Oil prices have fallen sharply once again and the concern this time is not so much oversupplies in the upstream market but rather the glut in the downstream market. A glut in refined products could lead to a cut back in production from refiners. This in turn could lead to lower demand for crude oil from them. It is not surprising to see then that oil prices have seen a sharp pullback in recent weeks.

In trading today, oil prices were again down sharply but this is not having any impact on WellStar Energy Corp. (TSX-Venture:WSE). Based in Calgary, Alberta, WellStar is engaged in the acquisition, exploration and development of oil and gas properties. The company’s projects include the McTaggart Project located in Saskatchewan and Leduc Project located in Alberta. WSE owns approximately 240 net acres in Billings County and over 920 net acres within an approximately 22,400 gross acre contiguous land package in Sheridan County Montana.

WSE shares are soaring in trading today after the company announced that it has entered into a Letter of Intent (LOI) in connection with the acquisition of certain oil & gas assets located in East Central Alberta from an arm's length vendor. Pursuant to the terms of the LOI, the company will acquire the Assets in consideration for a net purchase price of $12,000,000 including aggregate cash payments of $8,000,000 and the issuance of $4,000,000 of common shares of the company at a deemed price of $0.50 per share.

Andrew H. Rees, President and CEO at WellStar, said that the acquisition represents a clear path forward for the Company to excel through the current challenging resource price environment.

WellStar Energy shares are seeing a huge rally in trading today. By the closing bell, WSE shares traded 157% higher at $0.09 on volume of 195,000, which is substantial above the daily average volume of 2,287.

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