Plenty of excitement last week and not just with the election. The week started with I3 Energy (I3E) seeing its price collapse back down on Monday after readers of the blog and listeners to the podcast were alerted last weekend to the false statements being made about the previous week's announcements. I started challenging the misstatements on Friday and a crescendo of abuse built up right through the weekend, only finishing on Monday morning after what I said would happen did. Most of this was from those promoting the false interpretations of I3's announcements, but some was from genuine investors who having been deceived and bought the shares, now wanted to believe the lies.
The same thing happened with Anglo African Oil & Gas (AAOG) who announced on Thursday no further repayments from SNPC, lower than expected payments under the investor sharing agreement and yet another rig delay. This proved too much even for core investors and the price collapsed 70% to 0.7p. As those who follow me know, I’ve been calling this down from the high teens and, just like with I3E last weekend, I received much abuse on the way. Some of this came from known shills, but the majority was from those who had bought too many and wanted desperately to believe.
As I said mid-week, I can understand how upsetting it is for those who believed the misrepresentations and bought these companies’ shares, but all I do is look at the facts and report them. There's nothing personal in this, there's no agenda and all I can say is be very careful in future who you listen to. Particularly in the case of AAOG, I think some people have racked up enormous losses, multiplied up by averaging down and, if it’s any consolation, some parties are looking to try to put together an investor group with 5%+ to call an EGM and remove the directors. I understand there could be a good case to recover damages from previous and current directors, plus the company’s professional advisors.
Back to more normal news, Predator Oil & Gas (PRD) announced that it has entered into a rig option agreement. They have until 31 January 2020 to finalise a legally biding contract. No word yet as to how they will finance this, although they do say that it creates a catalyst to attract drilling partners if required. They already have a convertible loan note outstanding, so my view would be to do nothing here until financing news is released.
United Oil & Gas (UOG) returned from suspension on Monday, possibly not the best of days with Tullow Oil (TLW)’s simultaneous announcement of its difficulties. Tullow of course is co-venturer in UOG's most significant asset offshore Jamaica. On the bright side, they announced the receipt of $855,000 from Hibiscus in relation to their North Sea blocks. Unfortunately, their Egypt acquisition from Rockhopper Exploration (RKH) turns out to be being financed at 3p, which is nearly half the price of their last placing. I’ve never been particularly keen on this company, since it's an arbitrary collection of assets and doesn't really appear to have any direction. The ones that do best in the market generally have one big project and 100% focus on it. Share prices also tend to stagnate once companies reach the production stage and dreams turn into realities. The money usually is in the run up to that point.
Hurricane Energy (HUR) announced a trading and operational update. All looks solid. Average production rate of 13,300 barrels of oil per day for 2019 and 20,000 barrels of oil per day forecast for 2020. Currently 33.2p, it trades under the 34p placing price of three years ago, even though it has achieved its targeted objectives. Think about it.
Eco (Atlantic) Oil & Gas (ECO) announced the renewal of its Guyana licence, another one where Tullow is the operator and major interest holder, but everything here comes down to the operating decisions that will be made in January. Will Tullow want, or be able to continue, is the question.
Europa Oil & Gas (EOG) announced its AGM statement. Key here is whether they can secure farm-outs for their Inishkea licence, offshore Ireland, and their newly awarded licence in Morocco. At a £10 million market cap, it remains a pure gamble.
Pantheon Resources (PANR) announced successful bids for acreage in an Alaska lease sale. 27,840 acres might sound a lot, but the announcement is pure fluff and PANR remains very much on the avoid list.
In closing, RockRose Energy (RRE) announced the commencement of its development drilling campaign. The company is set to participate in at least seven wells before the end of 2020. I bought a couple of tranches of RRE around 130p and received a 150p per share “return of capital” a few months later, so I’ve always liked it. Now 1,735p, it appears to be temporarily stuck, but another acquisition should move it.
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The author holds 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.