Trading activity in Globalgroup Investment Holdings, Inc. (PINKSHEETS: GIHI) continues its strong run through the week as more than 2.3 million shares have moved hands by mid-afternoon on Thursday while the price of those shares have displayed considerable volatility over the past two weeks.
On Wednesday GIHI announced that their subsidiary, Sovereign Oil Corp., had begun re-working O&G wells in Kansas. In their press release GIHI noted that “initially two of the ten wells are now under secondary recovery drilling operations” and that Sovereign “expects to have the re-work completed by the end of the month.”
This should play in nicely with a recently launched promotional campaign highlighting the potential that exists for GIHI, at least it should be expected that GIHI’s shares continue to see heavy volume. As for the share price that’s anybody’s guess as GIHI was trading as low as 0.0002 last week before bolting to a high of 0.0044 on Wednesday. Of course those shares also dipped to a low of 0.0012 on the same day and that kind of volatility has been on display Thursday with swings between 0.0021 and 0.0046.
Earlier this month Sovereign reached an agreement with Avenill Ventures, LLC to acquire a 50% working interest in the ten oil and gas wells referenced earlier. As part of that acquisition of leases agreement GIHI stated they would be paying $150,000 for their share of the working interest. Where that money is coming from investors probably already know as GIHI reported no cash in their most recent quarterly filing and while did list $29,869 in receivables as an asset they also carried $185,552 in accounts payable and totaled long term liabilities at $191,704.
When GIHI announced the re-working of O&G wells in Kansas on Thursday they said their petroleum division expects annual revenues of approximately $300,000 upon completion. Whether or not that means GIHI expects $300,000 or half of that due to the agreement is unclear. What should be remembered by investors is that in the press release announcing the agreement it was noted that “The JV expects that cost of the rework and re-drilling to be approximately $30,000 per oil well.”
That being said, it could still be some time before the money starts flowing in for GIHI.
Of course GIHI is more than just an oil and gas exploration company; they also provide “a viable online shopping alternative for fiscally challenged consumers by offering quality name brand products at affordable prices, regardless of household income, through credit alternatives and time-payment options. Globalgroup also offers technology solutions such as GlobalLOK™ that address the computer payment collection challenges associated with rent to own, pay as you go and no-credit-check computer markets, and in other industries where remote PCs and laptops are deployed.” Unfortunately they haven’t figured out how to turn these services and products into revenue.
It really doesn’t make much sense to get too deep into what these other ventures are for GIHI as they don’t seem to be picking up much traction. The only catalyst right now for GIHI is the promotional campaign and as most investors are aware those are finite and when the song stops the party is over.