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A few small oil and gas exploration companies continue to defy rational valuations and surge once again Wednesday – Pyramid Oil Company (AMEX: PDO), Mexco Energy Corporation (AMEX: MXC), and FieldPoint Petroleum Corporation (AMEX: FPP) are up 17%, 20% and 30% respectively in morning trading.

To put the almost unbelievable gains of these stocks over the past month in perspective, from April 22 to May 21 Mexco Energy is up 725%, Pyramid Oil is up 337% and FieldPoint Petroleum is up 516% (yes, those percentages are correct). For the last three months the biggest gainer, Mexco Energy, is up 1230% - from a market capitalization of less than $8 million to about $90 million now.

Midland, Texas-based Mexco Energy had total revenue for the last three months of 2007 of only $950,000 and net income of $220,000 – certainly energy prices are going up, but enough to justify its current price-to-earnings ratio (P/E) of 216? With this kind of speculation, one would think the company would be Mexco.com not Mexco Energy.

Also in Texas, Cedar Park-based FieldPoint Petroleum had revenue of $1.51 million for this first quarter of 2008 and net income of $350,000 – compared to a year earlier, revenues increased 67% and earnings per share (EPS) doubled, but doubling EPS still only made it 4 cents per share for the first three months of the year. With FieldPoint Petroleum trading at more than $7 per share it has a market capitalization of $65 million and a P/E of 84.

California-based Pyramid Oil is a shocking value relative to the other two companies: sure, it has the largest market capitalization at slightly over $100 million, but the company has $830,000 in net income for the first three months of this year to back it up (this is meant sarcastically). Pyramid Oil is indeed the least speculative of these speculative stocks, with a P/E of 'only' 44 right now.

With little news from any of these three companies save for a few rather unimpressive, business-as-usual press releases about new drilling activity, what is driving these prices upwards other than sheer madness? Record oil prices. Oil futures are topping $130 per barrel Wednesday, and as speculators bet on plays Mexco Energy, FieldPoint Petroleum and Pyramid Oil - for whatever reason - have benefited disproportionately.

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