Both the markets and oil prices continued to firm up last week and, on the company front, it was an interesting week for news.
Bahamas Petroleum Company (BPC) announced its final results. Nothing remarkable in them, but rather disconcerting that they’re converting over £1.5 million of the notes at 1.27p per share, when the market price was standing at nearly 3p. The company will proceed to issue a further 120 million new shares and continue on its path of dilution for the reward of certain undisclosed “investors.” People appear to have been misled into thinking Bahamas Petroleum is now fully financed for the drill and have been buying these new 1.27p shares at up to nearly three times that price. Unfortunately, it’s not and it’s come back quite a bit since I pointed this out on Twitter. You really have to read the RNS announcements carefully. The financing talked about is “conditional.” There likely will be money to be made, though, and possibly big money at that, but you need to be alert and aware and, of course, enter at the right price, which I suspect will be quite a bit lower than where it is now. The special trading course explains all about how to do this.
UK Oil & Gas (UKOG) announced a placing to raise £4.2 million at 0.2p per share. It’s not clear yet if they’re paying off the CLN with cash, or with shares as per the mechanism they refer to in their RNS. One way or another, though, the convertible should be gone and once all the new shares have churned, there’s at least potential for the share price to move higher. Meanwhile, also onshore UK, Angus Energy (ANGS) has submitted its application to Lincolnshire County Council relating to the extension of the Saltfleetby pipeline to the National Grid Terminal and IGas Energy (IGAS) announced they are seeking to develop new assets as they position themselves to play what they say will be an important role in the UK's energy transition.
Independent Oil & Gas (IOG) announced the award of the Phase 1 Well Management Contract. They’ve appointed Petrofac, who look like a good choice. Phase 1 comprises the development and production of the Southwark, Blythe and Elgood fields in the UK Southern North Sea through a total of five wells, with gas transported onshore via the Thames Pipeline.
Providence Resources (PVR) issued their 2019 annual results. Providence has entered a period of exclusive negotiation with SpotOn Energy in relation to the Barryroe farm-out following SpotOn Energy’s recent £500,000 investment in Providence, but it looks like there’s plenty still up in the air here. Lansdowne Oil & Gas (LOGP) also have a 20% stake in Barryroe, so their fortunes remain very much tied.
Columbus Energy (CERP) and Predator Oil & Gas (PRD) announced the start of Phase 2 of their CO₂ Pilot Project in Trinidad. The aim is to increase oil production and they will be building up to continuous injection in the coming weeks. The results are awaited with interest.
President Energy (PPC) announced a deeply discounted placing last week at 1.85p. I expected this, in fact I was certain it would happen, and I warned about it a number of times over the past couple of weeks or so. Remember, when you see paid commentators recommending a stock and even interviewing each other about it, it’s not for your benefit, rather for those who employ them. Avoiding holding shares over a placing is one of the most important keys to success on AIM. I explain exactly how to spot these upcoming placings in the special trading course. It’s easy when you know how to do it.
Cluff Natural Resources (CLNR) issued an operational and corporate update. Shell and Cluff are fully committed to drilling the Pensacola and Selene prospects, they say, with drilling anticipated to commence in the second half of next year. Those who choose to read this lengthy RNS further will also see that while both Shell and Cluff remain committed to drilling the Selene prospect, in light of the current investment environment it is anticipated the Selene well will now be drilled in 2022. So there’s nothing exciting happening here for quite a long time. Best avoided now perhaps, but it could be a good one for a later date at possibly a much lower entry price.
Empyrean Energy (EME) announced that an extension has been agreed with the China National Offshore Oil Corporation for the first phase at Block 29/11, offshore China. The company now has until 12 June 2022 to drill its first well. They hope to do that sooner, though, as soon as it is practicable and safe to do so. It should be an interesting one if and when it happens.
United Oil & Gas (UOG) announced its latest Egypt well results. Flow rates of around 8,700 barrels of oil equivalent per day were achieved during testing and United's net production from the Abu Sennan asset as a whole is likely to rise to over 2,500 barrels of oil equivalent per day in the coming weeks. What matters now is whether in a company like this, any of that can actually flow down to the bottom line.
Canadian Overseas Petroleum (COPL) issued what appears to be a rare piece of good news. They’ve reached an agreement in principal to resolve the dispute with Essar Mauritius and will retain an effective interest of 5% carried through the drilling of the first appraisal well. It’s not going to amount to riches, but at least it’s something. They also have the option to increase their effective interest to 15%, by paying 10% of historic expenditures of Essar Nigeria at cost through the drilling of the first appraisal well, although that option could require a relatively substantial fundraising.
Ascent Resources (AST) announced the Administrative Court of the Republic of Slovenia has ruled that an EIA is required for their planned work. No surprises there. The Slovenian environmental agency has been saying that all along. It would not be unreasonable to think that it has been the company itself delaying operations, rather than spending the funds raised for their actual intended purpose. As I’ve said before, it’s just a lifestyle company for the Board, so the “news” doesn’t really matter anyway, since nothing of value will ever be achieved for the shareholders, as at the other companies of which they have previously been or still remain directors.
For balance, I should say that these types of shares can occasionally perform, but only on organised ramps where you risk getting spiked. These ramps also generally presage a heavily discounted placing. Overall, if you hold, you will inevitably lose money. Just take a look at some historic charts and you’ll see what I’m talking about.
Meanwhile, some chancers were tipping Petrel Resources (PET) around the 6p level last week on its Iraq oil potential. I highlighted this company several times last year at a penny and a number of regular readers made significant money. It actually got as high as 26.5p at one point. Note, though, that despite what some of these accounts are saying, I’m not endorsing it at 6p. It was a favourite of mine last year at one penny. At that price it was a certainty, at several times that price it’s not. What some fail to understand is that opinions change in relation to the share price level.
For those interested, my personal trading focus is on the elimination of all potentially loss making trades and only going for those which I view as certainties. That is the secret to actually making large profits. I set out my trading ideas in the private blog each week and I’ve also written a 10 part trading course for those who want to understand these small cap markets fully and make money out of them. Details of the course are at https://www.oilnewslondon.com/course and details of the private blog are at https://www.oilnewslondon.com/subscribe There are trial offers for both.
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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.