Another busy week. Lansdowne Oil & Gas (LOGP) announced its placing: £488,000 at 0.6p to keep the company going until the end of the year. Now, their target is to complete a farm-out deal within the next six months. LOGP is trading at a valuation of 8 cents per contingent resource barrel, so there's scope for a significant re-rating if the farm-out comes about. Same for its Barryroe partner Providence Resources (PVR) too.
Following its placing the previous week, Predator Oil & Gas (PRD) announced the exercise of its rig option with mobilisation to occur between 15 March and 30 April. From posts on social media, there’s plenty of placing stock still to be flipped. The next important announcement here will be the publication of the CPR, which will allow their project to be properly assessed.
PetroTal (PTAL) issued an oil reserves and operational update. I mentioned declines and a promotion out of Zug and encountered quite a reaction. It's always interesting to float a thought on Twitter to test the response and, in particular, see how broker, promoter and company connected accounts respond. An overreaction usually indicates you’re correct, otherwise they’d just ignore it, particularly when they’re also saying that all your followers are fake and nobody reads what you write anyway. Some of them who’ve given trouble previously over my comments on companies such as Block Energy (BLOE) and Reabold Resources (RBD) (both of which are down in price very significantly since) were complaining that they were blocked. I actually block very few people, only around 20 since I first started posting on Twitter in 2013, and very few of them are genuine investors. I’m happy to have a normal discussion with anyone about anything, but if someone starts posting insults and childish pictures, then sorry, but I'm going to block them, as anyone else would. More on PTAL and its promotion as it all unfolds.
UK Oil & Gas (UKOG) announced a loan balance reduction to £3 million (so the convertible loan note shares continue to gradually be distributed) and and also reported commencement of the HH-2z water shut off intervention. Resumption of extended well test operations is planned to follow directly after. As I’ve said before, where UKOG goes price wise now is down to power of news and new buying verses the level of convertible loan note share sales.
Sound Energy (SOU) announced that the anonymous UK private company, which was previously stated to be the purchaser of their assets, doesn't have the funds. No surprises there. I said in November last year that their "sale" announcement then had been drafted to make people think the sale of the Morocco assets was a certainty in order to help associated parties sell their shares. Sound is now around just 3% of the price it was when I first started warning about it. Now CEO, James Parsons, who managed to destroy investors' capital in Echo Energy (ECHO) too, is off to rescue Ascent Resources (AST). Per the recent RNS, the “rescue” starts by wiping out the equity of existing shareholders.
Some people ask whether I short these companies. Actually I don’t and next time there’s a quiet news week I’ll explain why. My focus is on certainties, companies which I’m certain will perform on the upside. Finding them involves reviewing all companies, good and bad, and I post my comments on the lot. I’m only negative on companies because I don’t think they’re very good. I have no financial interest in their outcomes. I write two blogs. The main blog (and associated podcast) focusses on the news. The private blog focusses on the trades. Writing it all down and publishing it is a good discipline, requiring focus and accuracy, since I'm open to criticism if I don't get it right. Writing the main blog ensures staying on top of and correctly assessing all the oil and gas public company news each week. Writing the private blog and sharing my thoughts ensures careful and accurate analysis of the trading ideas. The main blog is free. The private blog costs £95 a month. Some question the cost, but what I can say is that of those who try the £23.75 first month's trial subscription, the vast majority see the value of it and continue at the full monthly rate. The link is https://www.oilnewslondon.com/subscribe
Back to the individual companies, Tower Resources (TRP) announced a Cameroon update. They’d like to spud the well in the course of June 2020, but that of course needs financing. The Company believes that it will be able to complete a farm-out within its desired timeframe, although there can be no certainty. It remains a bet.
Union Jack Oil (UJO) and Reabold Resources (RBD) announced West Newton updates. Rathlin, the operator, now has filed a revised plan to the Environment Agency for approval, following which they will notify the Oil and Gas Authority in respect of the recommencement of the A-2 extended well test. Meanwhile, the bottom hole drilling location for the B-1 well has been finalised and preparations are currently underway for the works required for the commencement of operations at the B site, which will begin during Q2 2020. It looks like the timetable is slipping a little here, hence the poor market reaction.
Touchstone Exploration (TXP) raised £9 million in a placing at 40p. Funds will be used to accelerate exploration drilling at Ortoire, where so far they’ve had considerable success. At the other end of the credibility spectrum, Canadian Overseas Petroleum (COPL) only managed to raise a comparably miserable £117,000 from its Chairman, “reflecting his confidence in the company” they said.
Eco (Atlantic) Oil & Gas (ECO) was "delighted to announce it has been recognized as a 2020 TSX Venture 50™ company, an annual ranking of top-performing companies on the TSX Venture Exchange.” Makes you wonder how bad the other TSX Venture companies must be. Meanwhile, United Oil & Gas (UOG) announced completion of the Rockhopper acquisition. The 114,503,817 shares issued to Rockhopper Exploration (RKH) will be admitted to trading on AIM on 28 February.
Perhaps more interesting, Bahamas Petroleum Company (BPC) announced it has arranged a second convertible loan note facility. Imagine the two of them competing to sell when things get going. Interestingly, it’s a Bahamas based entity which, although the share price now is over 4p, could have participated in the recent 2p offer. Kind of indicates they see the share price going lower than that. Indeed, it’s still not certain whether Bahamas are fully funded yet and they say that they are continuing to evaluate farm-in options. I suspect the recent strength in the share price is more perhaps due to a short position rather than renewed confidence in the company.
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 https://www.oilnewslondon.com/oilman-jim
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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.