Wednesday, June 29, 2022

The Improbable Ascent of MMEX Resources Corp (OTCMKTS:MMEX)

MMEX Resources Corp (OTCMKTS:MMEX) caught a massive spike of buying last week after declaring its intent to finance, construct, and run a massive crude oil refinery with inner radical proximity to West Texas Permian Basin oil production. The announcement is striking, to say the least. The stock had been pricing significantly under a tenth of a penny into the announcement. In its wake, we have seen a two-day blitz to take it 5000% higher and nearly test the penny threshold.

One can’t blame the market for not seeing this coming: The company has no cash, no operations, no resources, no nothing. The facility will apparently cost nearly a half of a billion dollars to construct. Hence, it may be fair to apply the word “unlikely” to the prospects of this ever coming to fruition. Nonetheless, management is unphased: “MMEX plans to surround the Pecos County refinery with an additional 250 acres of buffer property and leverage state-of-the-art emissions technologies to yield minimal environmental impact. It also expects to feature closed-in water and air-cooling systems, which will require very little local water resources. Construction is slated to begin in early 2018, following the permitting process, and the facility is projected to begin operations in 2019.”

MMEX Resources Corp (OTCMKTS:MMEX) frames itself as a mining development Company leveraging global demand for mining assets located in the Americas. The company was formed to engage in the exploration, extraction, refining and distribution of oil, gas, petroleum products and electric power.

MMEX focuses on the acquisition, development and financing of oil, gas, refining and electric power projects in Texas, Peru, and other countries in Latin America.

The company’s management team apparently has extensive experience with natural resource project development and project financing in North and South America. MMEX is initially focusing on opportunities in Colombia and Peru. Moreover, MMEX Resources Corporation focuses on the exploration, extraction, refining, and distribution of oil, gas, and petroleum products in the United States and Latin America. It also intends to provide electric power.

MMEX Resources Corporation was formed in the State of Nevada on May 19, 2005 as Inkie Entertainment Group, Inc.

Subsequently, the Company amended its articles of incorporation to change its name to MMEX Resources Corporation and to authorize the Company to issue up to 3,000,000,000 common shares and 10,000,000 preferred shares.

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Jack W. Hanks, President & CEO of MMEX Resources Corp., commented: “The Permian Basin is the largest continuous oil discovery in America and has experienced exponential gains in daily production volume recently. The existing facilities and pipeline networks are largely unequipped to handle this growth and are limiting where products can be transported. By building a state-of-the-art refinery along the region’s existing railway infrastructure, we hope to bring a local and export market for crude oil and refined products which will add substantial job and economic growth to West Texas.”

In many ways, the project does make plain sense: “Located 20 miles northeast of Fort Stockton, Texas, near the Sulfur Junction spur of the Texas Pacifico Railroad, the 250-acre facility intends to utilize its connection to existing railways to export diesel, gasoline, and jet fuels; liquefied petroleum gas; and crude oil to western Mexico and South America. Once completed, the Pecos County refinery will be one of the first oil refineries built in the United States in more than 40 years.” However, just because it makes sense doesn’t mean it will happen.

Finally, there is one very interesting detail to note with this stock: take a look at recent SEC filings. You will find that the company has been feverishly filing 10-Qs covering years’ worth of financial data. All of the reports covering financial data back well into 2013 have been filed over the past 3-4 months.

The net impact of that realization, along with some of the other slightly “disproportionate” facets of this story suggest, at the very least, that investors may benefit from a little extra due diligence with this name.

Recent action has seen 5100% added to share values of the stock over the past week of action, but that move comes in the context of a larger bearish trend. Moreover, the stock has registered increased average transaction volume recently, with the past month seeing just shy of 530% over the long run average.

Now commanding a market cap of $5.2M, MMEX Resources has virtually no cash on the books, which must be weighed relative to about $708K in total current liabilities. The company is pre-revenue at this point. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $MMEX stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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