When Jim Cramer says to buy something "hand over fist," people tend to pay attention. This morning,
proved the rule.
The company, which was highlighted on last Friday's "Mad Money," was changing hands today on the NYSE at $5.73, a jump of more than 12% from its Friday close.
The company says it is the second largest oil producer in Argentina, with production sites spread throughout Latin American. Besides Petrobras Energia's main oil and gas production business, the company also dips into the refining and petrochemicals rackets, too.
Back in April, Petrobras Energia announced a $614 million sale of a Peruvian operation, whose main asset was a lot in the Talara basin that produced 16,000 barrels of oil equivalent per day. The company said in a filing that the sale "will enable Petrobras Energia S.A. to monetize the value of assets in Peru, leverage the capacity to focus the Company's investment in Argentina and strengthen the short and long term financial position."
But at the beginning of May, Deutsche Bank downgraded Petrobras Energia after it reported a 93% year over drop in operating income. They also reported a first quarter loss of P$205 million, compared to P$261 million gain in the first quarter of 2008.
Petrobras Energia attributed the decline to multiple problems: There were the sales drops and the devaluing of the peso. Also, exploration costs grew from P$49 million in first quarter 2008 to P$151 million in first quarter 2009. Sales margins dropped to 33.2% from 54.2% in the year-ago period.
A steep drop-off of oil production in Ecuador didn't help matters.
Still, at this time last year, Petrobras Energia was trading around $14 -- and, in case you missed the news, oil prices are now going up.
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