Only Way to Save Oilexco Is By Selling it

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 |  Includes: BRGXF, OILXF, TLM
by: FP Trading Desk

Oilexco Inc. (OTC:OILXF) is up another 23% Tuesday as takeover speculation reaches fever pitch.

Oilexco stock has now jumped 63% in the past two days, after an article in the Sunday Times of London reported Oilexco is up for sale, listing BG Group (OTCQX:BRGXF), Talisman Energy (NYSE:TLM), and Petro-Canada [PCA.TO] among interested suitors.

That Oilexco is on the block is no surprise. In November, the company said it was exploring strategic options after it canceled a planned offering of $150 million of convertible bonds and up to 20 million common shares because the financings would be too dilutive to current shareholders.

Burning cash too fast as a result of weak oil prices and the company’s daily cash outlay commitments, Oilexco is a month away from increasing production by 50%. That would curb the cash burn rate, but ultimately, the only way to save the company at this stage may be its outright sale.