Fortune Petroleum Says Rumors Caused Stock Jump

The chief executive of Fortune Petroleum Corp. said unusually heavy trading and a $1 jump in the price of its shares last week may have been caused by unfounded rumors of a “significant discovery” at a Texas oil well, as well as descriptions of the Agoura Hills company as a possible takeover candidate.

A week ago, Fortune’s stock price had jumped to $3.125, up almost 50% from its price a few days earlier. Last Tuesday, 96,000 Fortune shares changed hands, nearly 10 times the normal daily volume, said Tyrone J. Fairbanks, the company’s chief executive.

Fairbanks said during the unusual trading activity last week, the company was asked by a number of investors about a rumored significant discovery on its LaRosa property in Texas.

“The company has not made a major discovery on the LaRosa or any other of its properties,” Fairbanks said. “We are concerned that investors may be trading in our stock based on rumor.”

Fairbanks also said the heavy sales activity may have stemmed in part from an article that appeared in an oil trade publication describing Fortune as a possible takeover candidate. Fairbanks said the company routinely acquires other companies, but has no intention of being the subject of an acquisition itself. “We’re always making acquisitions,” Fairbanks said. “It is our determination to, in any type of acquisition, to be the surviving party.”