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Oilman Jim - UJO BPC HUR RMP ECHO NTOG

Some interesting announcements in the last couple of days, so starting with the better ones:


Union Jack Oil (UJO) announced the acquisition of an additional interest in the Wressle project. It’s buying a further 12.5% for £500,000. Most importantly, because it’s only maintaining this current market capitalisation due to the upcoming West Newton drill, Union Jack says it "remains in a strong financial position with current cash reserves in excess of £5.5m and fully funded for its existing drilling, testing and development commitments on all of its projects during 2020.” UJO has been a strong performer of late and the share price now is nearly three times where it was at the end of March.


Bahamas Petroleum Company (BPC) announced it has been awarded the OFF-1 petroleum licence offshore Uruguay. It’s helpful news and puts in place an insurance policy for when/if the Bahamas drill fails. Management’s own numbers are large with an estimated resource potential of up to 1 billion barrels of oil equivalent and the work obligation is relatively modest. In the meantime, their objective is to try to raise the necessary funds to finance their upcoming Bahamas drill, which is due to spud towards the end of this year or the start of next. At some point, an attractive entry may present itself.


Hurricane Energy (HUR) announced the departure of founder, Dr. Robert Trice. It’s a sorry saga for those investors who believed, but you see this so often, with the share price ending up lower than it was before the initial drilling "success." It’s one reason I believe these types of shares really are only for buying and selling over a timeframe of a few months and not for holding longer-term.


Red Emperor Resources (RMP) has elected not to exercise its option to acquire a 70% operated interest in the offshore Perth Basin exploration permit, WA-481-P. It continues to conduct due diligence on a number of projects around the world and says it will update its evaluation of such opportunities as they progress. It could be interesting depending upon what they find and the company has been involved in a number of high impact drills previously. Ironically, with nothing but the possibility of something, it has more promise than most.


Echo Energy (ECHO) announced an internal reserve and resource update. It’s essentially aspirational and wholly academic really unless they can achieve some commercial results in the field, which have eluded them to date. I’m not sure whether they realise that the business objective of a company is to make at least enough money to cover the overheads and perhaps even make a profit, not just to keep tapping investors with promises and live off that money. It’s down from 17p where I first warned about it to under a penny.


Nostra Terra Oil & Gas (NTOG) announced an operational and corporate update. NTOG is even worse than ECHO. After years of supposed effort and millions upon millions raised to finance the oil and gas equivalent of a mom and pop business, of a type which every other operator in the area can somehow make a good living out of, it still can’t even pay its overheads and has to survive on endless injections of cash at ever lower share prices from the most gullible of investors, who don’t understand that they’re just burning their cash. In the real world, if you don’t make money from your business operations, you go bankrupt and starve; at this company, you’re rewarded with a quarter of a million a year salary. For shareholders, it’s just an endless share price decline.


The way to make money from the market is to suppress the fear of missing out, eliminate all potentially loss making trades and only go for the certainties. I’ve written a 10 part trading course, which explains everything for those who want to understand how these companies and markets actually work and how to make money out of them. Details are at https://www.oilnewslondon.com/course


I also write a private blog each week covering my actual trading ideas and other matters. Details of that are at https://www.oilnewslondon.com/subscribe


I’ll be back at the weekend with more.


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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.

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