A heavy week for the oil price and a hard time for most companies. It's probably better now not to have any production. As always with AIM and small cap companies, the big potential is in the strong exploration plays.
Starting with 88 Energy (88E)'s news, it announced that a petrophysical interpretation has indicated hydrocarbon pay in the Torok and Seabee formations. There's always a laboratory somewhere that will produce a soothing analysis for a fee to keep the necessary optimism alive. Reality is though that Premier Oil (PMO) pulled out and let 88 Energy have their interest for free. It's time to move on from this chapter of the story now. 88E gets interesting again after it's financed for the next drill.
Zenith Energy (ZEN) announced a conditional purchase and sale agreement in respect of a Tunisian non-operated working interest. Anyone thinking about buying these shares would be strongly cautioned to study the last set of accounts that ZEN filed on SEDAR. Of course, no one will. That's why such promotions are able to work. Like Coro Energy (CORO) which issued final results. The auditors there make reference to a material uncertainty in relation to going concern within their audit report, so watch out. Trinity Exploration & Production (TRIN) delivered as good an operational update as could be expected under the circumstances. The reality is though that at current prices it's going to be seriously loss making. So little reason to go for it unfortunately. Same applies to PetroTal (PTAL), which now effectively has suspended all further development activity. Pantheon Resources (PANR) continues to seek a farm in partner for its Alaskan projects to pay a meaningful up-front cash component as well as carried terms on future drilling. Good luck with that. Meanwhile Pharos Energy (PHAR) has withdrawn from the possible acquisition of Shell's assets in Egypt's Western Dessert. It's looking to see if it can get something better now. Angus Energy (ANGS) issued a £1.4 million convertible loan note. This company is not exactly the best when it comes to preserving shareholders' capital and it's always difficult to see why any rational person would invest in it. Egdon Resources (EDR) issued interim results. Again, it's very difficult to get excited about it. I get asked are there still any good ones? And the answer to that is yes, there are. In any market environment there are always opportunities and there's always money to be made. You just have to understand that there has been a paradigm shift. My trade ideas are in the private blog and the link for that is https://www.oilnewslondon.com/oilman-jim
Contact me on Twitter @Oilman_Jim
Click “SUBSCRIBE” to receive these blog posts by email
The author may hold one or more investments in one or more of the companies mentioned so this post cannot be viewed as independent research. This post does not constitute investment advice or a recommendation to buy or sell and may be incorrect or outdated.