Recon Technology, Ltd. (NASDAQ: RCON) shares surged 15.53% in the extended hour’s session to $2.53. Based on its 200-day and 20-day major moving averages, RCON has been in rally mode. On the back of that, RCON shares have risen 3.68% in the past 30 days. The stock has fallen by -10.25% over the last 12 months, falling 250.44% behind the market. The Company has also been lagging behind competitors and similar names by 15.71%.
What they do…
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The Chinese oilfield company Recon Technology, Ltd. (NASDAQ: RCON) is listed as the first nonstate-owned oil company on NASDAQ. The China National Petroleum Corporation and Sinopec (NYSE: SNP) are China’s largest oil exploration companies, with Recon providing automated production equipment, efficient mining and transportation equipment, and reservoir stimulation methods to boost petroleum production, reduce impurities, and lower production costs.
What happened Recently…
A technology service agreement signed by one of Recon’s subsidiaries and the North China Branch of Sinopec in October 2020 states that the Company completed a successful design and implementation of an intelligent control platform system for North China E&P Company of China Petroleum & Chemical Corporation.
With the System, Sinopec will analyze the sensors installed on electrical submersible pumps of gas wells using AI-based algorithms and then monitor and control the operation of the ESPs based on the analysis. A Sinopec production well will be the first in the industry to utilize intelligent technology using ESPs. To increase the flow of liquid when the reservoir pressure is not high enough, many oil and gas producing wells need an artificial lift to prop up the fluid level. However, ESP systems are not always operating efficiently, causing costly downtime for operators. Based on months of testing and examination, the System has demonstrated strong potential for extending the service life of ESPs and improving the economic performance of gas wells.
Following the Agreement, RMB 1.8 million (USD 276,000) was to be paid in return for the System’s development by December 31, 2021. The System has passed Sinopec’s initial inspection, and the Company has already received more than half of the consideration.
What Company Commented…
“We are immensely privileged to partner with Sinopec,” stated Mr. Guangqiang Chen, the CTO and founder of Recon, “and we aim to build AI into our traditional oil and gas production processes and create the world’s first digital oil and gas businesses.”
Analyst opinion on the stock
At the present moment, RCON looks like it’s trading 78.1% below the average price target of Wall Street analysts for the year ahead, which stands at $10.00. A street analyst’s recommended rating of 3.00, on a scale of 1 to 5, where 1 represents “Strong Buy,” while 5 represents “Strong Sell.”