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Oilman Jim's Private Blog



The markets are looking much better this week and there's been some quite interesting news.

88 Energy (88E) announced that Charlie-1 appraisal well drilling has commenced. To quote, they are "optimistic that success is just around the corner." This is a credible drill since Premier Oil (PMO) has farmed in, and a big one targeting 1.6 billion barrels of oil and 480 million barrels net to 88E. There are seven stacked targets and multiple oil and gas show announcements are highly likely. I highlighted this as a favourite several times around 0.7p in the blog and it's now around 1.2p, having been nearly as high as 1.5p.

Lekoil (LEK) announced the results of their internal investigation into the OPL 310 facility agreement. All the directors are, of course, exonerated, although the company was the principal beneficiary of the fraud, seeing its share price multiply on huge volume, allowing large shareholders to sell at higher prices. Blame is placed upon the external advisors.

SDX Energy (SDX) announced that their play-opening BMK-1 well in Morocco encountered commercial quantities of gas in both target horizons. The rig now moves to drill the potentially play-opening LMS-2 well. Predator Oil & Gas (PRD) also announced approval of the environmental impact assessment for their upcoming Morocco well. The shares are still under their 4p placing price with large numbers to be flipped and it’s amusing to see the CEO already starting to talk about someone acquiring the company.

Solo Oil (SOLO) announced a transaction update and restoration of trading. The transaction with ONE-Dyas has fallen through and they're now looking to sell their Tanzania assets to pursue acquisitions within the European gas market. They're currently in discussions with several separate vendors. At around 1p and a £6 million market cap, there could be potential here.

Nostra Terra Oil & Gas (NTOG) and Zenith Energy (ZEN) issued news. The NTOG board room drama has been brought to a close with Andy Morrison becoming Chairman and Ewen Ainsworth stepping down. Doesn't change the nature of the extremely poor assets one little bit though and losses for shareholders plus high salaries for directors will continue as normal. Any new deal the new directors bring in will require even more funding. In the meantime, ZEN has lost its "flagship" Azerbaijan licence and they're trying to compensate by waffling on about a possible acquisition in Tunisia. In the meantime, do the new bondholders know what the billion Canadian dollars of assets on their balance sheet are? Or have any explanation as to why virtually all the cash raised in the past year has gone in claimed foreign exchange losses? I’ve been calling these two down for some considerable time and within just the last year, both of their share prices have collapsed by around 80%.

On a brighter note, Tower Resources (TRP) announced a Cameroon farm-out update. Half the well costs are now covered and other half is under discussion, with the company confident. I said a couple of times in the blog towards the end of last year that this one could be worth picking up under 0.4p.

For those who are not familiar with me, I focus exclusively on small cap oil and gas companies and know this sector inside out. I’ve been involved in the stock markets on both sides of the fence since the early 1980s and I also have many years’ operational and corporate experience in the oil industry, which enables me to see very quickly whether or not these companies are telling the truth. It’s not just about understanding the fundamentals, though, critical is to understand how the finance and promotion side works. That’s why I know what’s going on at these companies and where they’re likely to go. If you’re interested in knowing my trading ideas, plus more about some of these companies that I can't write here, then subscribe to the private blog at I’ll be back at the weekend with a full blog and podcast covering all the week’s news.

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