The oil price is now in the $30s and if it stays down at this level, a new game will commence. The good thing is that what's actually viable at this lower level will become very profitable indeed when the oil price starts to rise again, as it almost certainly will.
Moving on to the news so far this week.
RockRose Energy (RRE) was hammered on Monday, "closing the gap" from its last pre-suspension price. On Tuesday, it confirmed it was "debt-free with net cash of £272.1 million (equivalent to £20.75 per share)," around double the current share price. It’s certainly going to be a good one to trade.
Jadestone Energy (JSE) issued strong news, confirming "the business is resilient and expected to generate positive operating cashflow in 2020, even at oil prices below US$30/bbl." It will be interesting to see which other companies can make this statement - and which ones can’t.
In similar vein, Trinity Exploration & Production (TRIN) confirmed their "operating break-even has consistently been below US$30.0/bbl in all periods since the new management's measures took effect in 2016." Again, let's see how many other companies can confirm this.
South American producer/developer, PetroTal (PTAL), also took a hammering. It's 2020 capital program is based upon $60 oil. They issued news on Tuesday stating that "given the strong relationship PetroTal has with its key contractors, the Company has agreed to manage payments with a number of its contractors, allowing for ongoing operation of the contractors' crews." In other words they don't have the cash now to pay them.
Baron Oil (BOIL) announced the completion of its £2.5 million placing at 0.1p per share. The proceeds will be used to fund Baron's share of the ongoing work programme in Timor-Leste, the drilling of the onshore El Barco-3x well in Peru, and to provide additional working capital.
Tower Resources (TRP) managed to get away a £500,000 placing at 0.375p just in the nick of time. Now, lets see if the first farmee provides proof of funds this month and whether the second one signs up.
Solo Oil (SOLO) announced the return of the ONE-Dyas deposit. Now, they're confident they have sufficient cash resources to meet current firm budgeted commitments within the existing portfolio of assets in Tanzania, and to cover general working capital needs for the remainder of 2020.
Bahamas Petroleum Company (BPC) announced the possible execution of a possible convertible loan note agreement deferred to 15 April, perhaps 15 May. In the meantime, the possible CLN holders who were already granted options, exercised at 2p and, I guess, sold them. Let's see how oil in the $30s works for BPC.
UK Oil & Gas (UKOG) announced the flow of dry oil to the surface as a result of their water shut off programme. Price moves here now come down to the level of new buying verses the level of the convertible loan note sales.
Egdon Resources (EDR) announced that the subsurface review of their eastern Humber Basin licences has identified a new low-risk near-field exploration opportunity, which can be targeted by drilling from the current Keddington location. This presents a number of low-risk/low-cost drilling opportunities.
Union Jack Oil (UJO) has an even larger interest than EDR in these now and announced it's also expecting news during the remainder of Q1 and Q2 in respect of the extended well test at West Newton A-2 and the commencement of site works in preparation for the drilling of the West Newton B-1 well. They also confirmed that they're fully funded for drilling.
Meanwhile, 88 Energy (88E) confirmed the Charlie-1 surface hole is complete to around 3,500 ft. depth and casing will be run in the 12 1/4 inch hole prior to commencing drilling the 8 1/2 inch production hole. Now we wait for the important announcements.
More on all this at the weekend.
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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.